WOOD Flash – Bank of Cyprus: 1Q24 highlights
Bank of Cyprus (BOCH) reported EUR 133m in net income, and we believe that the bank has made a better start than its conservative guidance for the year. BOCH targets a >17% ROTE, if it adjusts its capital to a 15% CET1 ratio. In 1Q24, on our calculations, the bank had over a 23% ROTE, with a 17.1% CET1 ratio. Although we knew that the bank was defensive in its 2024E guidance, 1Q24 gave us more assurances that BOCH has little risk of missing our EUR 476m 2024E net income estimate. During the conference call, BOCH mentioned that it may review its annual targets and cited the positive margin trends, on the back of the better-than-expected interest rate outlook (current implied 2024E Euribor at 3.8%, vs. 3.4% in the bank’s 2024E guidance), the modest deposit beta, and the still low share of time deposits in the mix. Overall, we see the results as neutral to positive: the bank seems to be faring better than its conservative guidance, and the slower fees have been mitigated by the lower COR. BOCH has also started accruing a 50% payout from its 2024E net income. Although BOCH’s stock has moved significantly (53% including dividends in the past six months), we still like the name as an income/ value proposition. According to our estimates, the bank is trading at 4.3x P/E and 0.8x P/TBV for 2024E.
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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