1. 2 miltos michaelas, director - international business banking the cyprus banking system
TRANSCRIPT
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Miltos Michaelas, Director - International Business Banking
The Cyprus Banking System
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Cyprus ratings
The most recent 10-year CY bond which was Issued in February 2010 is now
trading at 121 bps spread.
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Cyprus
EU member & Euro zone member Proven versatility in crisis Milder effects from the economic crisis Inflation within control Stable, conservative Central Banking
System and effective regulatory framework The financial sector withstood the global crisis and no public
recapitalization or government support was necessary Cyprus is in the OECD white list http://www.centralbank.gov.cy/
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Extracts from Deutsche Bank report on the Banking Industry in Greece and Cyprus (21/01/09)
“CyprusFrom a macroeconomic perspective, we agree with most economists that Cyprus is, relative to other world economies and Greece in particular, in a healthier position to sail through the current storm. Our view is supported by the island`s positive budget balance and relatively low public indebtedness.
It is important to point out that, as opposed to Greece, the Cyprus Government has the economic resources to boost the real economy if needed.”
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CBC Governor comments
“That said, I should point out that the budget deficit estimate for 2009 puts Cyprus in the middle of the range for the euro area as a whole. The situation is clearly not as dire as in some other euro area countries. To some degree this is because the recession we experienced in 2009 was not as deep as in other regions of the euro area. A comparison with the Greek economy is not warranted. Our budget finances are in better shape and our debt to GDP ratio is considerably smaller.”
Athanasios Orphanides, Governor of the Central Bank of Cyprus,
Interview with Bloomberg, 11 February 2010
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Total deposits ιn Cyprus increased by €4,1 billion during the first 4 months of 2010 (7,0% to €62,2 billion) - reflecting the "safe-heaven" qualities of the market.
Property sales rising Qatar agreement: a $500M joint project in hospitality/property
sectors confirming Cyprus economic potential
"Our decision to proceed with such a large investment in Cyprus is due to the fact that the Cypriot economy has not been affected to a great extent by the (world)
financial crisis. The Cypriot economy has opportunities for growth."
Qatar's Emir, Sheikh Hamad bin Khalifa al-Thani Nicosia 21.4.2010
Cyprus going strong in 2010
8Cyprus Banking
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Cyprus Banking A market driven system based on English law, a legacy of
the British colonial rule Marfin Laiki Bank, BOC – more than 100 years old Legal and Banking structures (still) reflect British equivalents Corporations Act 1925 - Marfin Laiki is number 1 on Register
of Companies Open, competitive, multivariate, multidimensional, even
multicultural Banking Industry Well capitalised and profitable banks www.acb.com.cy
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A Multitude of Banks of past and present
LISTED BANKS
1.Marfin Popular Bank Public Co Ltd 2.Bank of Cyprus Public Company Ltd 3.Hellenic Bank Public Company Ltd 4.USB Bank Plc
SUBSIDIARIES OF FOREIGN BANKS Αlpha Bank Cyprus Ltd BNP Paribas Cyprus Ltd Emporiki Bank – Cyprus Limited Kommunalkredit International Bank Lt
d
National Bank of Greece (Cyprus) Ltd Russian Commercial Bank (Cyprus) Lt
d
Societe Generale Cyprus Ltd Piraeus Bank (Cyprus) Ltd Eurobank EFG Cyprus Ltd
OTHER BANKS1. Co-operative Central Bank Ltd 2. The Cyprus Development Bank
Public Company Ltd
3. Housing Finance Corporation 4. Mortgage Bank of Cyprus LtdBRANCHES OF BANKS OF
EU COUNTRIES1. Barclays Bank PLC 2. Banque SBA SA 3. First Investment Bank Ltd 4. Joint Stock Company “Trasta Komer
cbanka”
5. National Bank of Greece S.A. 6. Central Cooperative Bank PLC 7. Banca Transilvania S.A. 8. Joint Stock Company Akciju Komerc
banka "Baltikums"
BRANCHES OF BANKS OF COUNTRIES OTHER THAN EU
1. BankMed s.a.l. 2. Arab Jordan Investment Bank SA 3. BANQUE BEMO SAL 4. Bank of Beirut SAL 5. BBAC SAL 6. BLOM Bank SAL 7. Byblos Bank SAL 8. Credit Libanais SAL 9. FBME Bank Ltd 10.Open joint-stock company AvtoVA
Zbank
11.OJSC Promsvyazbank 12.Jordan Kuwait Bank PLC 13.Jordan Ahli Bank plc 14.Lebanon and Gulf Bank SAL 15.Lloyds TSB Offshore Limited 16.Privatbank Commercial Bank 17.IBL Bank sal
REPRESENTATIVE OFFICES1. UBS AG2. Atlasmont Banka A.D.
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Central Bank of Cyprus (CBC)
Cyprus joined euro area on 1 January 2008 Interest rate management is now the responsibility
of the European Central Bank (ECB) Governor is a member of the Board of ECB The primary objective of the ECB is to ensure price
stability, which means keeping inflation rates below, but close to, 2%
The CBC has supervision over the commercial banks http://www.centralbank.gov.cy
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An Effective Supervisory Mechanism
Proven track record in setting Monetary Policy and safeguarding the Banking system
IMF’s Assessment of Financial Sector Supervision Report: “Supervision is strong, effective and in compliance with International Standards”
Full adoption of European Regulation Use of non-interest rate tools proactively:
Tight(er) liquidity requirements – only 30% of FX deposits can be lend out by Banks
Managed “cooling off” of the propertymarket: tightened LVRs since mid 2007, to 70%.
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More deposits than loans
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35
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45
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DEC 05 DEC 06 DEC 07 DEC 08 DEC 09 FEB 10 APR10
FCY EUR
Euro deposits growing faster than FX since mid 2006
Time deposits grew faster than demand
after Sep 2008
Cyprus is self sufficient in liquidity, post (liquidity) crisis
No deposit withdrawals by international customers
Loan growth under control April 2010 Loans/deposits 95% €4,1bn increase in deposits in first 4
months of 2010 (7% increase)
25,00 30,00 35,00 40,00 45,00 50,00 55,00 60,00 65,00
DEC 05
JUNE 0
6
DEC06
JUNE 0
7
DEC 07
JUNE 0
8
DEC 08
JUNE 0
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DEC 09
FEB 10
MAR 1
0
APR 10
Loans Deposits
€bn
€bn
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A Competitive Banking Market Commercial Banking
8 local Banks and other credit Institutions9 subsidiaries of Foreign Banks27 International Banks operate branchesVery open & automatic for EU Banks462 branches plus 33 IBUsSupervised by the Central Bank of Cyprus
Large Cooperative sector111 co-ops Supervised by the Cooperative Central Bank
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1970
1980
1990
2005Experiences from Abroad
Targeting Greek & Cypriot
populations in developed countries
Banking experiences in UK, Australia, USA, South
Africa, Canada
Entry of main Cypriot banks
in Greek Market
solidified international
strengths and experiences
Entry to CEE
was a calculated move to extend products and services to
existing (international)
client base
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Commercial Banking
Highly educated human resources Strong Banking Fundamentals Adoption of Basel II Conservative Lending Practices Good breakdown of operations between markets Very good profitability record No exposure to “Toxic Assets” Limited exposure to CEE Healthy Capital and Liquidity positions
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Solid Financial Package attracts International businesses
Benign low tax environment Extensive Array of Double Taxation treaties Mature Legal and Accounting practices Strong Banking Sector Euro
shields against currency crisisprovides access to ECB arsenal of supportexpands the attractiveness of the Banking system for foreign
deposits and transactionsAttraction of International Businesses expands banking client base
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Government Crisis Support Was not needed for Cyprus Banks given their strengths and reasonable
risk exposures In fact, the Cyprus Government did not have to “bail out” or provide
direct support to any private organisation. Government has the means for direct support but their use has been
unnecessary in the global crisis of 2008/09 Fiscal stimulus package being implemented The Central Bank of Cyprus offers and operates a Deposit Protection
Scheme up to €100.000 per person or legal entity per Bank.
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Update on Cyprus Banking System
“Despite negative developments in the real economy, our banking system remains in very good condition. Our banks are healthy, robust and have a strong capital base with a capital adequacy ratio of 11.9% at December 21, 2009, well above the minimum requirement of 8%.
The ratio of non-performing loans, which was declining steadily over time, may have increased in 2009 but is still within acceptable levels. Please note that satisfactory provision for bad debts has been set aside for these loans. Regarding the profitability of banks, this has been satisfactory in 2009. During the year under review, which was a difficult year, banks have remained profitable, but with a smaller profit than that of 2008”
Athanasios Orphanides, Governor of Central Bank of Cyprus,
Press Conference, Nicosia 3 May 2010
20Marfin Laiki Bank
A good Example
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Group Profile – 109 Years Old Marfin Laiki Bank (MLB) is strategically positioned as an
emerging regional player with two home markets, Greece & Cyprus, and operations spanning in 11 countries in Emerging Europe, UK, Australia, Malta, Russia & Ukraine
Regional bank with focus on corporate banking, wealth management and international business banking
Ten years of robust growth both organically and through a series of mergers & acquisitions and strategic alliances
Successful management track record and entrepreneurial culture
Head-Office in Cyprus 507 branches, over 9.500 staff http://www.marfinlaiki.com.cy/
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Credit Ratings
Their Comments“The rating derives from the bank’s very strong position in its domicile market, its expanding franchise in Greece due to the consolidation of the group’s three banking
subsidiaries and its improving financial fundamentals”
“The ratings of (MLB) reflect its sound franchise in Cyprus and to a lesser extent
Greece, its adequate funding profile supported by a large deposit base, good
cost management and improved capitalisation…
Following a period of rapid loan growth and international expansion, including the integration of Athens-based subsidiary
Marfin Egnatia Bank (MEB; rated ‘BBB+’ Outlook Negative), the bank is now focusing on containing asset-quality
deterioration, maintaining sound liquidity and improving cost efficiency. The latter
should be helped by the planned merger of MEB into MLB, likely in Q210.”
Credit Ratings
Long term Bank deposits A3Senior unsecured debt A3Subordinate Debt Baa1Bank financial strength C-Short term P-1
Long term Issuer Default rating BBB+
Short Term Issuer Default rating F2
Individual Rating CSupport Rating 2
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Strong Shareholders-Allies MLB shares are listed on the Athens and the Cyprus Stock Exchanges Biggest shareholder is Dubai Investment Fund with 18,81%
No exposure to Dubai fund or Dubai economy – confirmed by press release and Rating Agencies comments
Other key shareholders proposed purchase of stake http://www.dubaigroup.com/
2nd biggest is Marfin Investment Group (MIG) with 9,55% Listed in Athens Stock Exchange €5,19bn capital raising through private placement completed in July
2007 Most recent investment: Olympic Airlines http://www.marfininvestmentgroup.com/
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Financial InformationKey balance sheet items (€m) FY08 FY09 1Q10
Loans to customers (net) 23.427 25.082 26.041
Total assets 38.367 41.828 42.311
Customer deposits 24.828 23.886 24.791
Total equity 3.430 3.636 3.674
Tangible equity 2.165 2.358 2.388
Key ratios FY08 FY09 1Q10
Tier 1 8,6% 9,7% 10,1%
Capital adequacy ratio 10,6% 11,8% 12,1%
Cost/income 54,5% 58,1% 56,8%
NIM 2,4% 1,72% 1,81%
Loans/Deposits 94,4% 104,0% 105,0%
NPLs 4,3% 6,1% 6,33%
Provisioning 61 bps 105 bps 108 bps
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Comments on 2009 Results
Marfin delivered better than expected earnings of €30m: Marfin’s fourth quarter earnings beat our estimates by 32%, coming in at €30m versus our expectation for €23m. The beat came from lower impairments, while fees also surprised positively. Earnings for the full year amounted to €174m, down 56% y/y (€187m, down 44% adj). Overall a good set of results, with positive trends in asset quality and equity levels, though deposits were down q/q.
UBS
Unexpectedly good results
Q4 bottom line significantly beats our estimates
Surprise came from stronger NII (particularly in Greek operations) improving fee generation and higher trading. The solid top line performance more than offset the higher than expected costs in Q4.
Cheuvreux
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Recent issue of capital securities (April 2010) Hybrid Tier I Notes
Size of issue: Through a private placement up to €200 m with an option to extent
Application process closed on Friday, 7th May 2010 Oversubscribed to €250 m The proceeds to be used to further strengthen the Banks Tier I
capital
June 2010-Public offer for €50m under way
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Marfin Laiki Bank Achievements“Best
Investment Services Provided,
Cyprus 2008”Awarded by
“World Finance of Reuters” – (first
time awarded to a Cypriot Bank)
“Best Bank in Cyprus
in 2009”Awarded by
“World Finance”
“Best Internet Bank,
Consumer Bank in
Cyprus, 2009” and
“Best Sub Custodian
Bank in Cyprus, 2009”
Awarded by “Global Finance”
“Innovation Award- Cyprus”
Awarded by “Money Markets
2008 International
Custody Awards”
“Straight-through
Processing (STP)
Excellence Award”
Awarded by “Deutsche
Bank”
“Quality Recognitio
n for Outstandin
g Achievement Award,
2009 - 2010” (Best in Class STP
Rates) Awarded by “JP Morgan”
“Special 10 Year
Recognition Award for the period 2000-
2009” For the quality of US payments
Awarded by “JP Morgan” –
(first time awarded to a Cypriot Bank)
28ROSPROMBANK, Russia
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Branches: 8
Sub-branches: 12
Employees: 570
As of 31/05/2010
Credit Portfolio: € 117 m
Total Assets: € 458 m
Equity: € 59 m
Presence Throughout RussiaPresence Throughout Russia
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Commercial Bank “ROSPROMBANK” (LLC) was founded in 1995. In February 2008 it became part of the MARFIN POPULAR BANK PUBLIC CO LTD.ROSPROMBANK (RPB) provides the full range of banking operations (all regular banking operations, ForEx, cash collection, etc.). Clients count on RPB for fast delivery of a wide spectrum of personalized commercial banking products and services. RPB offers:
- Treasury Services- Short and Long Term Financing including: Project
Financing, Working Capital Financing, revolving/non-revolving Credit Lines and Overdrafts
- Trade Financing, Letters of Guarantee and Letters of Credit
- Leasing- Factoring- Corporate and personal Credit Cards
RPB also provides a wide array of Deposit products, as well as Payroll distribution products, for corporate, commercial and retail customers.
Today RPB renders services to over 1.000 companies1.000 companies.
HIGHLIGHTS
31Contact Us
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Contact Us International Business Banking
Tel: +357 22 363923, Fax: +357 22 363900e-mail: [email protected] Address: PO Box 22032, CY-1598 Nicosia, Cyprus
Nicosia International Business Centre 1 (178)Tel: +357 22 363737, Fax: +357 22 363750e-mail: [email protected]
Nicosia International Business Centre 2 (168)Tel: +357 22 363737, Fax: +357 22 363700e-mail: [email protected]
Limassol International Business Centre 1 (179)Tel: +357 25 815959, Fax: +357 25 815972e-mail: [email protected]
Limassol International Business Centre 2 (158)Tel: +357 25 815959, Fax: +357 25 815637e-mail: [email protected]
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Contact Us cont… Larnaca International Business Centre
Tel: +357 24 814291, Fax: +357 24 814290e-mail: [email protected]
Paphos International Business CentreTel: +357 26 816522, Fax: +357 26 911334e-mail: [email protected]
International LendingTel: +357 22 363718, Fax: +357 22 312878e-mail: [email protected]
International Corporate Banking Unit Tel: +357 22 363903, Fax: +357 22 363900
e-mail: [email protected] Moscow Representative Office Tel: +74959670185, Fax: +74959670186, e-mail:[email protected]
35/2 Miasnitskaya Street
Moscow, Russia 101990
+7 (495) 967 1780
www.rosprombank.ru
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