Bank of Cyprus Announces Major Dividend and Share Buyback Programme
In a significant move that underscores its robust financial health, the Bank of Cyprus (BoC) has received the green light from the European Central Bank (ECB) to reward its shareholders with a substantial cash dividend and initiate an inaugural share buyback programme. This announcement is a testament to the bank’s strong financial performance and strategic advancements over the past year.
Chairman Takis Arapoglou expressed the bank’s dedication to creating sustainable value for its shareholders, highlighting the planned distribution as a testament to this commitment. “The total quantum of cash dividend is around five times higher than last year’s dividend and reflects the group’s strong financial and operational performance in 2023 which resulted in a rapid organic capital build-up,” Arapoglou stated.
The proposed distribution includes a cash dividend of €112 million and a share buyback programme capped at €25 million, amounting to a total of €137 million. This represents a 30 per cent payout ratio for the full year 2023, significantly up from the previous year’s 14 per cent, aligning with the bank’s distribution policy.
The BoC also reported a strong CET1 ratio of 17.4 per cent as of December 31, 2023, which supports the generous payout ratio for the year. The bank’s strategy aims to provide a sustainable return to shareholders, with expectations to prudently increase the payout ratio over time, targeting 30-50 per cent, including both cash dividends and buybacks.
The board of directors has proposed a final cash dividend of €0.25 per ordinary share for the year ended December 31, 2023, subject to approval at the Annual General Meeting (AGM) scheduled for May 17, 2024. This marks a five-fold increase from the previous year’s €0.05 per share. If approved, the dividend is slated for distribution on June 14, 2024.
Following ECB approval, the BoC intends to launch its share buyback programme on both the London Stock Exchange and the Cyprus Stock Exchange. The programme aligns with shareholder authorization from the previous AGM and will be subject to renewal at the upcoming AGM.
Arapoglou proudly stated that the Bank is celebrating its 125th year with a strong capital position, diversified portfolio, and sustainable profitability. “We remain focused on delivering shareholder value while continuing to support our customers, Cypriot society, and the growth of the Cypriot economy,” he concluded.
With this announcement, the Bank of Cyprus sets a positive tone for its future endeavors and reaffirms its commitment to enhancing shareholder wealth while contributing to the broader economic landscape of Cyprus.
