Bank of Cyprus: keep calm and return capital (stays BUY)
We still like Bank of Cyprus (BOCH). Despite the lack of growth, we estimate that it might achieve a 20% CET1 (17.4% in 4Q23) and a >12% ROTE (23% in 2023) in 2026E, where the 500bps of excess capital understates the earnings power in our forecasts. Even without special dividends, which might be possible due to the mismatch between growth plans and capital, we believe that BOCH is still compelling, as long as it stays broadly on track with its capital return plans. Our new price target (PT) is GBP 4.51/share. The bank is trading at 0.8x P/TBV and 5.1x P/E for 2024E. Our PT implies that a rerating towards 6.0x P/E and 0.9x P/TBV is plausible. We keep our BUY rating on the stock.
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.
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