Banks in Cyprus and Greece have announced significantly improved profit distribution policies, reflecting their strengthened profitability over the past three years, according to a report from Stockwatch.

Following the release of preliminary financial results for 2024, banks are not only continuing dividend payments but have also outlined enhanced shareholder returns.

Firstly, the Bank of Cyprus has committed to a new profit distribution policy aiming to return between 50 and 70 per cent of recurring net profits to shareholders in the coming years.

This marks a substantial improvement from the previous range of 30 to 50 per cent.

Based on this policy, the bank has announced a total profit distribution of €241 million from its 2024 earnings, with €211 million allocated for dividends and €30 million for share buybacks.

The overall distribution per share amounts to €0.55, with a dividend per share of €0.48.

Given the current share price of €5.48, this equates to a dividend yield of 8.8 per cent and a total distribution yield of 10 per cent, the highest among the banks under review.

For comparison, the per-share distribution was €0.25 in 2023 and €0.05 in 2022.

Meanwhile, the second-largest bank in Cyprus, Hellenic Bank, has not proceeded with a dividend payout due to its pending acquisition by Greece’s Eurobank.

Greek banks also report strong returns

Elsewhere, Eurobank Greece has announced the largest profit distribution, amounting to €674 million, with 57 per cent allocated to dividends and 43 per cent for share buybacks.

This translates to a 4.1 per cent dividend yield and a total yield of 7.1 per cent.

The bank has also committed to distributing at least 50 per cent of its earnings over the next three years.

Piraeus Bank will allocate its entire profit distribution to dividends, with no share buyback plans, resulting in a 6 per cent dividend yield.

The payout ratio is set to increase to 50 per cent from 35 per cent in 2024.

In contrast, Alpha Bank will allocate 75 per cent of its profit distribution for share buybacks, yielding a total return of 5.4 per cent.

Meanwhile, the National Bank of Greece will distribute 50 per cent of its 2024 earnings, with a dividend yield of 2.6 per cent and a total return of 3.7 per cent.

Despite expectations of lower bank profitability in 2025 due to declining interest rates, the improved distribution policies indicate continued strong returns for shareholders.

All distributions remain subject to approval by regulatory authorities and the respective general assemblies.

*This article is a translated version of content originally published on StockWatch.