Bank of Cyprus rewards shareholders with generous cash dividend

The Bank of Cyprus (BoC) on Wednesday announced that it has obtained approval from the European Central Bank (ECB) to pay a cash dividend and to conduct a share buyback programme, noting that this reflects the group’s strong financial performance and strategic progress.

‘Our ongoing commitment to delivering sustainable value to shareholders is demonstrated by our intended distribution comprising a significant cash dividend and our inaugural planned share buyback,” Chairman of the Group Takis Arapoglou stated.

“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,” he added.

The cash dividend and share buyback programme, which the bank refers to as the ‘distribution’, corresponds to a 30 per cent payout ratio for the full year 2023 and amounts to €137 million in total, comprising a cash dividend of €112 million and a share buyback of up to €25 million.

In addition, the bank said that the payout ratio for the entirety of 2023 of 30 per cent is in line with its distribution policy and represents a material increase compared to the previous year, when the payout ratio stood at 14 per cent.

“The distribution reflects the group’s robust capital position, ample liquidity and continuation in the delivery of sustainable shareholder value,” the announcement said.

Moreover, the bank said that the overall CET1 ratio on a transitional basis stands at 17.4 per cent as of December 31, 2023, reflecting the 30 per cent payout ratio for the year ended December 31, 2023.

The announcement explained that the “group aims to provide a sustainable return to shareholders“.

“The group’s distribution is expected to build prudently and progressively over time, towards a payout ratio of 30-50 per cent, including cash dividends and buybacks, taking into consideration market conditions as well as the outcome of capital and liquidity planning,” it added.

In terms of the cash dividend, the announcement said that the board of directors of BOC Holdings has resolved to propose to the Annual General Meeting (AGM), which will be held on May 17, 2024, for approval, a final cash dividend of €0.25 per ordinary share in respect of earnings for the year ended December 31 2023. This represents a five-fold increase compared to €0.05 in the prior year.

“Subject to approval at the AGM, the cash dividend is expected to be paid on June 14 2024 to those shareholders on the company’s share register on April 26 2024, with an Ex-Dividend date on April 25 2024,” the bank said.

In addition, the announcement noted that further details will be provided in the AGM notice that will be published on or around April 12 2024.

What is more, the group confirmed that following the ECB’s approval, it intends to commence a programme to buy back ordinary shares in the company for an aggregate consideration of up to €25 million.

The bank explained that “it is expected that, once launched, the programme will take place on both the London Stock Exchange and the Cyprus Stock Exchange“.

“The launch and implementation of the share buyback programme will comply with the company’s general authority to repurchase the company’s ordinary shares as approved by shareholders at the company’s AGM on May 26 2023,” the announcement stated.

This will be subject to renewal at the AGM scheduled to take place on May 17 2024, and with the terms of the approval received from the ECB.

The bank noted that further details concerning the proposed share buyback programme will be announced in due course.

“We are proud that the Bank, now in its 125th year, is well-capitalised, diversified and generates sustainable profitability,” Arapoglou stated.

“We remain focused on delivering shareholder value whilst continuing to support our customers, Cypriot society and the growth of the Cypriot economy,” he concluded.