The Bank of Cyprus (BoC) on Monday reported a profit after tax of €121 million for the quarter ended March 31, 2026, supported by strong lending growth, resilient asset quality and robust capital generation.

The bank also posted a return on tangible equity (ROTE) of 18.0 per cent during the first quarter of 2026, while basic earnings per share reached €0.28.

The lender said that new lending reached €829m during the quarter, marking a 9 per cent increase compared with the previous quarter.

At the same time, gross performing loans rose to €11.1 billion, up 2 per cent quarter-on-quarter, while the mainly retail-funded deposit base remained stable at €22.3 billion.

“We have started 2026 strongly with a profit after tax of €121m and a ROTE of 18.0 per cent, above our mid-teens full-year target, on a strong capital base,” said Bank of Cyprus chief executive officer Panicos Nicolaou.

“This performance was underpinned by a stabilising net interest income, continued cost discipline and robust asset quality with NPEs further declining to approximately 1 per cent,” he added.

The bank’s cost-to-income ratio stood at 37 per cent, reflecting what it described as continued cost discipline.

Meanwhile, the non-performing exposure (NPE) ratio declined further to 1.1 per cent, while the cost of risk reflected a net release of 17 basis points, driven by customer-specific reversals.

“During 1Q2026 we granted new loans of €829m, whilst maintaining prudent underwriting standards,” Nicolaou said.

“As a result, our performing loan book grew by 2 per cent since the beginning of the year, supported both by domestic and international demand,” he added.

The bank stated that its deposit base remained flat at €22.3bn as of March 31, 2026.

In addition, the group reported strong organic capital generation of 114 basis points during the quarter.

After accruing an ordinary distribution at a 70 per cent payout ratio, which the bank described as the top end of its distribution policy, the CET1 ratio reached 20.7 per cent while the total capital ratio stood at 25.5 per cent.

“Our business continued to deliver strong organic capital generation and enhance our strong balance sheet position,” Nicolaou said.

“We delivered strong organic capital generation of 114 bps in 1Q2026,” he added.

The bank also announced two targeted acquisitions as part of its strategy to diversify operations and accelerate balance sheet growth.

Specifically, the Bank of Cyprus reached an agreement to acquire the performing loans and deposits of the Cyprus Development Bank Public Company Limited, amounting to approximately €150m and €500m respectively.

At the same time, the group agreed to acquire a 26 per cent stake in Wealthyhood, which it described as a pan-European technology company offering retail clients digital access to stocks and exchange traded funds.

“In line with our stated strategy, during 1Q2026 we announced two targeted bolt-on acquisitions to further diversify our business model and accelerate balance sheet growth,” Nicolaou said.

“A 26 per cent stake in Wealthyhood will provide our retail customers with digital access to stocks and ETFs,” he added.

The chief executive also referred to the broader economic backdrop, saying that the Cypriot economy remains resilient despite geopolitical instability.

According to the bank, recent official forecasts point to GDP growth ranging from 2.7 per cent to 2.9 per cent in 2026, significantly above the expected eurozone average.

“The Cypriot economy exhibits resilience and solid growth against the backdrop of ongoing geopolitical instability,” Nicolaou said.

“Recent official forecasts suggest GDP growth ranging from 2.7 per cent to 2.9 per cent for 2026, significantly outpacing the expectation for the Eurozone average,” he added.

The bank also reiterated the medium-term financial targets presented during its March 2026 investor update.

These include a mid-teens annual ROTE target for 2026-2028, which translates to a ROTE above 20 per cent based on a 15 per cent CET1 ratio.

The lender further confirmed its intention to maintain what it called a meaningful shareholder distribution policy, targeting a total payout ratio of up to 90 per cent of 2026 earnings and up to 100 per cent of annual earnings for 2027 and 2028.

“While global geopolitical uncertainty is ongoing and the associated economic impact is unclear, Bank of Cyprus is well equipped to navigate this period, leveraging on our core strengths,” Nicolaou said.

“Our efficient business model, continued strong credit quality, robust capital and liquidity positions and our proven ability to successfully execute our strategy mean we are well positioned to deliver attractive and sustainable shareholder returns over the coming years,” he added.

Nicolaou also stressed the bank’s ongoing commitment to the domestic economy and its customers.

“Our commitment remains unchanged; to support our customers and the broader Cypriot economy, while continuing to deliver attractive and sustainable returns and creating value for our shareholders,” he concluded.