The Bank of Cyprus (BoC) on Tuesday outlined updated financial targets and capital allocation plans at an investor presentation.
At the same time, GlobalWealth Group PLC announced that the Bank of Cyprus had agreed to invest €6 million in Wealthyhood Ltd, becoming a strategic partner and major shareholder.
During its investor update, the Bank of Cyprus provided the latest information on the group’s outlook, financial targets and capital allocation framework.
The updated guidance reflects the group’s strengthened operating performance, disciplined balance sheet management and the positive momentum across core business lines, the bank stated.
“It also reinforces the Group’s capacity to generate sustainably high returns while supporting elevated distribution levels,” it added.
According to the announcement, the group’s key priorities are to continue to generate sustainable and resilient profitability and deliver attractive shareholder returns.
Based on these priorities, the group has updated its 2026 to 2028 financial targets and expects to deliver a mid teens reported ROTE, equivalent to a ROTE of over 20 per cent based on a 15 per cent CET1 ratio basis.
This level of profitability supports strong organic capital generation of 350 to 400 basis points per annum over 2026 to 2028.
Net interest income is expected to stabilise in 2026 as interest rates have normalised, with the European Central Bank (ECB) deposit facility rate expected to average 2 per cent for 2026, and to grow by an average of around 3 per cent per annum for 2026 to 2028.
The net interest income targets are based on loan growth of around 4 per cent on average per annum for 2026 to 2028, supported by domestic loan growth across retail and corporate segments in line with expected economic growth, as well as selective and cautious expansion of the international loan portfolio to around €2 billion by the end of 2028 from €1.4 billion in December 2025.
They are also based on careful growth of the fixed income portfolio, targeting around 22 per cent of total assets by 2028 subject to market conditions, while the deposit base and cost of deposits are expected to remain broadly at current levels.
As a result, the net interest margin is expected to stabilise above 270 basis points in 2026 and grow thereafter, driven mainly by the improved mix of interest earning assets as liquidity is gradually deployed to loan growth and through continuous investment in the fixed income portfolio.
At the same time, the group aims to grow further its capital light recurring non interest income, which comprises net fee and commission income, net insurance result and foreign exchange customer related fees.
Recurring non interest income is expected to grow with a compound annual growth rate of around 4 per cent, in line with economic activity and an increased volume of transactions, supported primarily by high single digit growth in net insurance result.
What is more, maintaining cost discipline remains a key priority for the group, with the cost to income ratio expected to remain at around 40 per cent throughout 2026 to 2028.
The bank reiterated a normalised cost of risk target of 40 to 50 basis points, although it expects performance to remain at the lower end of that range over the planning period, adding that there are currently no indications of asset quality deterioration.
As at December 31, 2025, the group’s CET1 ratio stood at 21.0 per cent following average annual organic capital generation of 440 basis points between 2023 and 2025.
Over the medium term, it is targeting a CET1 ratio of around 15 per cent and intends to deploy surplus capital through organic growth, investment in the business and shareholder distributions at the upper end of its policy range, which provides for a 70 per cent payout ratio.
The bank also signalled scope for additional shareholder returns through top up dividends and selective bolt on acquisitions, given its elevated capital levels.
For 2026, it is targeting an ordinary dividend based on a 70 per cent payout ratio alongside a top up dividend of up to 20 per cent, implying a total distribution of as much as 90 per cent of adjusted recurring profitability.
For 2027 and 2028, the group is aiming for a 70 per cent ordinary payout supplemented by a top up dividend of up to 30 per cent, allowing for potential annual distributions of up to 100 per cent of adjusted recurring profitability, subject to market conditions and capital planning outcomes.
Payments are expected to be primarily in cash, including interim dividends, while share buybacks may be considered where appropriate.
In a separate development, GlobalWealth Group PLC, listed on the Cyprus Stock Exchange (CSE), confirmed the signing of an agreement under which Bank of Cyprus Public Company Ltd will become both an investor and strategic partner in Wealthyhood Ltd, an associate of the group.
The agreement follows earlier announcements regarding Wealthyhood made on April 2, 2025 and October 15, 2025.
According to the announcement, the Bank of Cyprus will invest a total of €6,000,000 as part of a completed capital increase round priced at €87.1 per share.
Following the completion of all corporate actions, GlobalWealth Group PLC is expected to hold 25.31 per cent of Wealthyhood’s issued share capital, while the Bank of Cyprus will hold 26.45 per cent.
GlobalWealth Group PLC said its stake in Wealthyhood will be accounted for at fair value through profit or loss, and that the valuation implied by the funding round is expected to have a positive effect on its net asset value once the transaction is finalised and reflected in its financial statements in accordance with International Financial Reporting Standards and subject to auditor review.
Completion of the deal remains subject to customary contractual conditions and the receipt of required regulatory approvals.
The capital increase is intended to reinforce Wealthyhood’s ambition to democratise investing across Europe by accelerating the development of Artificial Intelligence driven capabilities designed to deliver more personalised investment solutions and broaden its footprint beyond its established presence in the United Kingdom and recent expansion into Greece.
The partnership is also aimed at supporting Wealthyhood’s move into the business-to-business (B2B) segment by showcasing its vertically integrated end-to-end wealthtech platform to banks and financial institutions seeking digital transformation of their investment services.
GlobalWealth Group PLC emphasised that references to B2B activities relate to Wealthyhood’s strategic development and do not imply the provision of regulated services by or to the Bank of Cyprus, and clarified that both shareholders will act independently without operational or commercial coordination at a regulated level.
The company said its objective, together with the Bank of Cyprus and Wealthyhood’s founders, is to accelerate penetration of the Cypriot market while strengthening capabilities for further expansion into Greece and other international markets.
Provided by SyndiGate Media Inc. (Syndigate.info).
