Nicosia, Cyprus. The Bank of Cyprus expects steady loan growth and remains open to targeted acquisitions under its 2026-2028 business plan, according to chief executive officer Panicos Nicolaou. He said the bank aims to withstand rising competition and potential economic volatility.
Capital, liquidity and cost of risk
Nicolaou told the media this week that the bank’s strongest defence in an uncertain environment is its low cost of risk, supported by strong capital and liquidity buffers.
He said the bank is “one of the best capitalised banks in Europe,” citing a Common Equity Tier 1 (CET1) ratio of 21 per cent, and described the institution as being in “the strongest position it has ever been.” Nicolaou said this reflects the bank’s conservative strategy, which will continue in the coming years.
Exposure to Middle East developments and tourism
Referring to the escalating crisis in the Middle East, Nicolaou said the bank’s exposure to the region is very limited. He added that the tourism sector accounts for around one tenth of the bank’s loan portfolio in Cyprus and Greece.
Cost efficiency and preparedness
Nicolaou pointed to the bank’s cost-to-income ratio, which remains below 40 per cent, as another indicator of resilience. He said the bank is “better prepared than ever,” adding that “depending on how the situation develops, we will act.”
Business plan projections
The bank said its three-year business plan was prepared before the latest developments involving Iran and is based on conservative assumptions.
According to the bank’s projections, credit expansion is expected to grow by around 5 per cent in 2026, with average annual growth of about 4 per cent projected for 2026 to 2028. The bank also expects its international loan portfolio to increase from €1.4 billion to around €2 billion by 2028.
How do you expect Bank of Cyprus’s loan growth projections to be affected by rising competition and economic volatility?