The Bank of Cyprus maintained its position as one of the strongest banking investment stories in the region during the first quarter of 2026, with both Deutsche Bank and Euroxx Securities reiterating positive recommendations following the lender’s results.

Indeed, the Bank of Cyprus continued to receive strong backing from international analysts, driven by credit expansion, resilient recurring revenues, stable net interest income and what both firms described as a superior capital position.

According to a report shared by Greek business outlet Newmoney, Deutsche Bank maintained its buy recommendation and target price of €10.40 for the Bank of Cyprus.

Meanwhile, Euroxx Securities reiterated its overweight recommendation and set a higher target price of €11.50.

Both institutions agreed that the first quarter delivered a strong performance, although each placed emphasis on different areas of the results.

A key point of convergence between the two reports concerned the bank’s valuation metrics and shareholder returns.

Deutsche Bank estimated that the Bank of Cyprus stock is trading at an adjusted price-to-earnings ratio of 10.4 times for 2026, 9.6 times for 2027 and 9 times for 2028.

Euroxx projected a price-to-earnings ratio of 10.4 times for 2026, 10.1 times for 2027 and 9.7 times for 2028.

The brokerage also forecast a dividend yield of 8.6 per cent in 2026, 9.9 per cent in 2027 and 10.3 per cent in 2028.

According to Euroxx, this forms the central investment argument supporting the stock, namely that the Bank of Cyprus trades close to European peer valuations while offering stronger distributions and a more robust capital base.

Deutsche Bank described the first quarter as “good”, highlighting that the outperformance against its expectations came mainly from the provisions line.

The bank posted net profit of €121 million, exceeding Deutsche Bank’s forecast of €111 million.

The positive surprise was largely attributed to a €5 million net reversal in provisions linked to a specific case.

Although Deutsche Bank acknowledged that the upside did not stem from a major operational deviation, it stressed that the core trends remained intact.

“The Bank of Cyprus appears capable of comfortably exceeding management guidance for the full year,” Deutsche Bank said.

The German lender identified balance sheet activity as the most important aspect of the quarter.

Net interest income fell by just 1 per cent quarter-on-quarter and 3 per cent year-on-year to €181 million, a performance Deutsche Bank considered slightly better than expected.

The decline had already been anticipated because the first quarter contained fewer calendar days and there was mild pressure on lending margins.

However, the pressure was offset by a 7 per cent year-on-year and 2 per cent quarter-on-quarter increase in performing loans, together with a positive contribution from the bond portfolio and stable deposit costs.

Euroxx took an even more optimistic view of the quarter, arguing that there is upside risk both to management targets and to its own forecasts.

The brokerage said that the net profit of €121 million exceeded its own estimate of €112 million.

According to Euroxx, the operational picture was supported by strong loan growth of 2 per cent quarter-on-quarter and 8 per cent year-on-year, as well as a 5 per cent increase in the fixed-income portfolio compared with the previous quarter.

Total revenue reached €250 million, broadly aligned with the firm’s €251 million estimate.

What is more, pre-provision profit stood at €145 million, close to the €147 million expected by Euroxx.

On costs, Deutsche Bank said performance remained in line with expectations, with the cost-to-income ratio reaching 37 per cent during the quarter.

Operating expenses declined by 18 per cent quarter-on-quarter, influenced by the voluntary exit scheme implemented during the previous quarter.

At the same time, expenses increased by 10 per cent year-on-year because of higher levies and charges.

Fee income moved in line with estimates, declining by 5 per cent quarter-on-quarter due to seasonality while remaining stable year-on-year.

The bank’s capital position remained another central focus for analysts. Deutsche Bank estimated the CET1 ratio at 20.47 per cent, down 49 basis points quarter-on-quarter.

The decline mainly reflected the provision for distributing 70 per cent of profits and smaller negative effects from higher risk-weighted assets.

Euroxx estimated CET1 at 20.3 per cent, compared with 21 per cent at the end of 2025.

The brokerage highlighted a negative 35 basis point effect from the CBD transaction, while also pointing to organic capital generation of 114 basis points.

Management also reiterated its targets for net interest income of around €720 million, loan growth above 5 per cent, a cost-to-income ratio near 40 per cent, cost of risk between 40 and 50 basis points and a reported return on tangible equity in the mid-teens.

For Euroxx, the first quarter suggests these targets could ultimately prove conservative.

The brokerage said this would particularly be the case if credit expansion remains strong, interest rates stay above assumptions and provisions settle below the range outlined in management guidance.