Bank of Cyprus Holdings Public Limited Company (BOCH) Earnings Call Transcript & Summary

As a short-term shareholder for the past 3, 4 years, let me again congratulate the Board and especially management for their successful journey with the Bank of Cyprus so far. And it's great to see Bank of Cyprus being one of the most best-performing banking stocks in the past few years. Again, very encouraging to see like another increasing trajectory for dividend payments. I'd like to think of myself as a long-term shareholder for the bank. And then what I want to find out from the Board and management is Bank of Cyprus is the leading bank in Cyprus. That's a fact set in stone. And my question is, is the Board and management thinking ahead in terms of a potential international expansion? Again, obviously, with the right steps and the right management in place, that will not repeat mistakes that were done in the past. So I'm just curious to see long-term-wise, how you might be thinking around the strategic direction?

We have -- in the relatively medium term, we have no international expansion aspirations because we feel we can improve operational efficiency, capital efficiency and revenue growth in Cyprus by controlling costs, expanding on more lines of business and try to focus more on the digital side of the client needs. So to expand abroad is one word, but then it is very complicated. You have to avoid making mistakes in the past -- of the past, and you have to have the right people to do it for you. So we have 2 or 3 years ahead of us where we can grow organically in Cyprus, especially on the digital side. Now you should never say never. But at the moment, there is no obvious answer to something internationally. Digital can offer us opportunities to expand international without physical presence. You don't need that anymore. And you can focus, you can target on very specific business cross-border without having a presence. So nothing in that front. We still have a lot to do domestically. Panicos, I don't know if you want to...

No, no, I totally agree. Being in Cyprus does not mean that our risk is totally Cypriot-related. We have an international diversification initiative which is based in Cyprus but undertakes, let's say, risk outside of Cyprus, which is like shipping, international corporate, international business. So the aim is to have 10% of our lending book be not purely Cypriot risk. But as the President said -- the Chairman, we don't intend to have a physical expansion outside Cyprus, for the time being anyways.

Expanding upon the fellow shareholder's point about the growing inorganically or organically abroad, I'm not sure which point he took. I would agree that growing domestically is the way forward and has proven to be very successful for you. I was wondering whether there's been any thought around growing inorganically domestically, possibly through acquiring loan portfolios from another bank. That's not so much available now, but possibly acquiring a smaller bank. There was a, I think, an opportunity maybe a couple of months ago with Korea, if I'm not mistaken, maybe I am. And I mean, also Hellenic Bank took over the Russian commercial banks' performing portfolio, which is something that again I believe we could have been a part of. I was just -- I mean, the bank is so comfortable now in terms of capital equity to expand with inorganic measures. So I was wondering to hear your point regarding domestic inorganic expansion?

We are always on the lookout for the kind of opportunities that you outlined. We haven't come across something that would make sense and would move the needle. With EUR 27 billion balance sheet, to acquire EUR 200 million, EUR 300 million of loans from customers that you already have most likely wouldn't make any sense. So yes, we haven't come across something that -- we're on the lookout, but we haven't come across something that makes sense. Well, I'm being advised that the 15 minutes have passed. And we should give another 5 minutes to make absolutely sure there are no questions.

Congratulations again on your results that were excellent, also on the Q1. Just a suggestion, given that the bank shares are still trading at levels that do not reflect the bank's potential and prospects, suggestion would be to look also at buyback prospects for next year, at least, so that the bank can make optimal use of its equity and deliver better value to its shareholders. It's a suggestion for the Board.

This is not the first time that people proposed buybacks. Buybacks are virtually the same in terms of cost to the bank as dividends. We prefer to pay dividends than do buybacks. We have a share which is -- needs to become more liquid, and the last thing we need is to withdraw shares from the market. So liquidity has gone up and we have to preserve that. I don't know if Panicos wants to add anything.

Yes. We thought as a Board that starting payment of dividends after 12 years is more appropriate to start with a traditional way, payment of dividends. And obviously, the dividend policy and the shareholder return is under constant review and buybacks will also be under consideration in due time. But the decision is to be for payment of dividends, at least for now.

Understood. Just a follow-up. Based on Cyprus experience in -- multi years of experience in international markets, we view buybacks as liquidity-enhancing and not liquidity-withdrawing actions. That's our view based on observed markets.

I think the additional 5 minutes have passed. Okay.

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

Allow me to now close this Q&A session so that the results can be announced. I'll ask Katia Santis to read the results of the voting, if we have them.

Waiting for Lumi to post it on screen. Okay, we're ready. So I will go through them as per the order of the resolutions in the AGM notice. So Resolution #1. Number of shares in favor, 157,677,091 shares. That is 100% in favor. Resolution #2. 157,077,065. This is 99.62% in favor. Resolution #3. 157,677,091, 100% in favor. Then Resolution 4A, which is the reelection of Mr. Arapoglou, 154,816,939. This is 98.19% in favor. The reelection of Mrs. Lyn Grobler, that's 157,077,063, which is 99.62% in favor. The reelection of Mrs. Hadjisotiriou, 157,677,091 shares, 100% in favor. The reelection of Mr. Nicolaou, 157,677,091 shares, 100% in favor. The reelection of Ms. Philippou, 157,077,063, which is 99.62% in favor. The reelection of Mr. Sofianos, 157,677,091 shares, which is 100% in favor. The reelection of Mr. Zographakis, 157,077,065, which is 99.62% in favor. The reelection of Mr. Iordanou, 157,677,091 shares, 100% in favor. The reelection of Mrs. Livadiotou, 157,677,091 shares, 100% in favor. And the election of Mrs. Monique Hemerijck, 155,302,908 shares, 98.49% in favor. And the reelection of Mr. Adrian Lewis, 155,977,061 shares, that is -- can you please go back to the previous screen, 98.49% in favor. For the rest of the resolutions. Resolution #5, 100% in favor. Resolution #6, again, 100% in favor. Resolution #7, again, 100% in favor. Resolution #8, 84.93% in favor. Resolution #9, 88.05% in favor. Resolution #10, 88.05% in favor. Resolution 11, 100% in favor; 12, 100% in favor; 13, 100% in favor; 14, 100% in favor; and 15, 100% in favor. So this concludes the voting results of today's AGM.

Thank you, Katia. We can now declare the end of the Seventh Annual General Meeting of the bank. Thank you.

Thank you.