Bank of Cyprus: income on tap, with rerating potential (stays BUY)
We have finetuned our estimates for Bank of Cyprus (BOCH) and rolled our model forward. We estimate a two-year IRR of around 16% on the stock, even without multiple expansion – a scenario we view as realistic, based on our valuation. BOCH is one of the best capitalised and most liquid banks in the Eurozone (a 49% L/D ratio and a 19.2% CET1 for BOCH vs. the 85% and 15.4% unweighted averages for SX7E). Recently, the bank upped its payout target to 70% (a 2025E total shareholder yield of 11% on the current spot price). We see capital and liquidity as the key buffers for providing shareholder returns, if earnings come under greater pressure beyond what lower rates imply. Normalising BOCH’s 2025E CET1 from 21% to 15%, we estimate an underlying ROTE of c.17% (vs. the run-rate estimate of 13.0% in our valuation). We keep our BUY on BOCH, with a new EUR 7.15/share price target (PT). The stock is trading at 0.9x P/TBV and 6.4x P/E, on our 2025E numbers.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.