Bank of Cyprus Boosts Earnings by Implementing Strategies That Grade Success Beyond Interest Rates
Bank of Cyprus Strengthens Insurance Operations with Strategic Acquisition
Bank of Cyprus, a leading financial institution in Cyprus, has made a significant move to expand its insurance operations with the acquisition of Ethniki Insurance Cyprus Ltd for €29.3 million in July 2025. This strategic move is aimed at bolstering the bank's market positions in both life and non-life insurance sectors, expanding its customer base, and enhancing the contribution of non-interest income to the Group’s revenues.
The acquisition aligns with Bank of Cyprus’s broader strategy to diversify its business model, reducing reliance on interest income and bolstering fee and commission income streams through insurance. Ethniki Insurance Cyprus holds a market share of 3% in life and 4% in non-life insurance markets in Cyprus and contributes cumulative profitability of approximately €4 million. The acquisition is expected to increase the Group’s gross written premiums by 15% and net insurance results by 10%.
In the first half of 2025, the Group's two subsidiaries, EuroLife and General Insurance, contributed €24 million in net returns from insurance operations, accounting for 17% of total non-interest income. €88 million of the non-interest income came from fees and commissions, while JCC Payment Systems contributed €14 million, representing 10% of total non-interest income.
The Group's focus on quality, diversification, and resilience is evident in its performance. In the first half of 2025, new loans totaled €1.6 billion, up 31%, and non-interest income reached €141 million, marking a 10% rise. The total performing loan portfolio reached €10.66 billion, surpassing the annual lending growth target of 4% for 2025.
However, the July 2025 wildfire in Limassol district served as a significant stress test for insurance operations. While the full financial impact of the fires will be determined after damage assessments and claim evaluations are complete, the net pre-tax cost of the fires for General Insurance of Cyprus Ltd is not expected to exceed €5 million.
Bank of Cyprus is also investing in digital solutions to drive growth and customer engagement. Jinius, a fully-fledged business model aimed at digital cross-selling, customer retention, and developing alternative revenue sources, has seen 2,700 companies and 232 retail businesses join the platform. Over €1.1 billion in cash was exchanged via e-invoicing and remittance services through Jinius.
The bank remains confident in achieving a return on tangible equity (ROTE) towards the upper end of its mid-teens range for fiscal year 2025, despite interest rate normalization. This is underpinned by disciplined strategy execution and leveraging its strengthened insurance and banking positions. Bank of Cyprus also targets a high payout ratio (up to 70%) on 2025 earnings, indicative of strong financial health and confidence.
In summary, Bank of Cyprus is actively pursuing insurance expansion through strategic acquisitions to improve profitability from non-interest income sources, thereby enhancing overall financial performance beyond traditional interest rate-dependent banking activities. The acquisition of National Insurance Cyprus is a significant step in this direction, strengthening the Group's leadership in the insurance sector and positioning it for continued growth and success.
- The acquisition of Ethniki Insurance Cyprus Ltd by Bank of Cyprus, a leading Cypriot financial institution, aims to enhance its market positions in both life and non-life insurance sectors.
- The strategic move is expected to increase the Group’s gross written premiums by 15% and net insurance results by 10%, adding €4 million in cumulative profitability.
- In tech-driven efforts to drive growth and customer engagement, Bank of Cyprus has launched Jinius, a platform for digital cross-selling, customer retention, and alternative revenue sources.
- Limassol, Cyprus, faced a significant stress test for insurance operations due to wildfires in July 2025, with the net pre-tax cost of the fires not exceeding €5 million for General Insurance of Cyprus Ltd.
- Bank of Cyprus's diversification strategy involves reducing reliance on interest income and bolstering fee and commission income streams through insurance, such as investments in the tech sector.
- Betting on a disciplined strategy execution and leveraging its strengthened insurance and banking positions, Bank of Cyprus targets a high payout ratio (up to 70%) on 2025 earnings, indicative of strong financial health and confidence.
