49
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0
127
127
127
0
153
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114
Bank of Cyprus Group
Investor presentation
April 2016
49
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• CET1 ratio (transitional basis) at 14,0%
• World-class board with significant financial services management expertise; Experienced
management with proven track record of delivering results
(1) Adjusted for the disposal of the Russian operations
(2) Loans in arrears for more than 90 days (90+ DPD) are defined as loans with a specific provision and loans past-due for more than 90 days.
• Total assets €23,3 bn; loan market share at c.40%; deposit market share at c.30%
• New lending of €0,6 bn during 2015 to support economic recovery and promising sectors
• Cypriot economy growing faster than expected; exited Troika MoU in March 2016
• ELA reduction of €8,1 bn since peak
• Customer deposits1 increased by €1,6 bn (12%) in FY2015, to 61% of total assets
• Loans to Deposits (L/D) ratio improved to 121%
• 90+ DPD down by €1,3 bn (10%) during FY2015; 90+ DPD ratio at 50%
• 90+ DPD provision coverage boosted by 7 percentage points to 48%
• Set up of Real Estate Management Unit (REMU) to take ownership of, manage and
monetise real estate assets in settlement of customer obligations
• Group profitability driven by core Cypriot operations
• Recurring pre-provision profitability stabilising, though elevated provisions burden bottom-
line profitability for FY2015
Bank of Cyprus overview
Dominant position in a recovering
Cypriot economy
Strong capital position with a
world class Board of Directors
Improving funding structure;
Significant reduction of ELA
Improving asset quality with
declining 90+ DPD2
Clear strategic focus – profitable
core businesses in Cyprus
2
• Currently listed on the Cyprus Stock Exchange (CSE) and the Athens Exchange (ATHEX)
• The proposed premium listing in London and the potential inclusion in FTSE indices is in
line with the Bank‟s strategy to seek a listing on a major European exchange
• New listing to increase profile with the analyst community and to result in higher levels of
liquidity
London listing will enhance
visibility and stock liquidity
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The journey so far… Decisive actions and deleveraging have put the Bank on a firm path to normalisation
March 2013:
• Sale of Greek
operations
• Placed under
Resolution:
– absorption of
Laiki Bank
– bail-in of
uninsured
depositors
• Suspension of
trading on CSE
and ATHEX
Sep 2013:
• AGM and election of new BoD
Nov 2013:
• Appointment of new CEO
Nov 2015:
• Extension of CEO appointment
Dec 2014:
• Relisting in Cyprus and Greece
Sep 2014:
• €1,0 bn share capital increase
Nov 2014:
• Election of new BoD
• Sale of UK loan book 1
Source: Company filings
Apr 2016:
• Agreement for the sale of Kermia Hotels for €26,5 mn
Mar 2016:
• Announcement of intention to list on the premium segment of LSE
Dec 2015:
• Changes to ECB provisioning assumptions leading to enhanced coverage
Sep 2015:
• Sale of Uniastrum and other Russian assets
Jun 2014:
• Laiki integration completion
Sep 2014:
• Sale of various Romanian assets
May 2014:
• Sale of Serbian exposure
Apr 2015:
• Sale of 95% stake in Marfin Diversified Strategy Fund
Apr 2014:
• Sale of Ukrainian operations
• Sale of 10% stake in Banca Transilvania
Oct 2013:
• Sale of Kyprou Asset Management
2013 2014 2015 2016
Jan 2015:
• Share capital increase: completion of Retail Offer
• Listing of the Retail Offer Shares and commencement of trading
Oct 2015:
• Covered bond become eligible assets for Eurosystem credit operations; ELA reduced to €4,5 bn
Oct 2014:
• Successfully passes the 2014 ECB Comprehensive Assessment
3 (1) Ex Laiki UK Loan portfolio
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The journey so far… Significant progress made on KPIs and clear strategy to meet new Medium Term Targets
Category Key performance indicators Dec-2013 Dec-2014 Dec-2015 Medium term
targets
Asset quality
90+ DPD ratio 49% 53% 50% <30%
90+ DPD coverage 38% 41% 48% >50%
Provisioning charge1 4,0% 3,6% 4,3% <1,0%
Funding
ELA % assets; € bn 31%;
€9,6 bn
28%;
€7,4 bn
16%;
€3,8 bn Fully repay
Net loans % deposits 145% 141% 121% 100%-120%
Capital CET1 (transitional) ratio 10,4% 14,0% 14,0% >15%
Margins and
efficiency
Net interest margin 3,5% 3,9% 3,8% ~3,00%
Fee and commission income/
total income 14% 13% 15% >20%
Cost to income ratio 43% 37% 40% 40%-45%
Balance sheet Total assets € bn €30,3 bn €26,8 bn €23,3 bn >€25 bn
Source: Company information
(1) IFRS9 impact, which is effective as from 1 January 2018, has not been taken into account for the purpose for the targets. Targets are set on the basis of the present regulatory
environment.
4
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234
234
234
0
97
114 Strengthened capital position
c.€10 bn (or c.30%) balance sheet
deleveraging Improving funding structure
The journey so far… Turnaround has translated into improving financial indicators
Source: Company information
(1) Pre CRD IV
(2) Proforma CRD IV
(3) Ratio of ELA Funding % total assets for 31 March 2016 is based on total assets at 31 December 2015
(4) Based on EBA Risk Dashboard Report, Data as at 31 December 2015
33,0
30,3 26,8
23,3
23,5 23,5 22,7 19,7
Jun 2013 Dec 2013 Dec 2014 Dec 2015
Total assets (€ bn) RWA (€ bn)
140% 145% 141%
121%
51% 49% 49% 61%
121%
Jun 2013 Dec 2013 Dec 2014 Dec 2015
Loans to deposits ratio
Customer deposits % total assets
EBA average L/D
ELA funding reduced by €8,1 bn
since peak 90+ DPD formation reversed Improving asset quality and coverage
0,9 1,3 1,4
2,7
5,3
(0,4)
(1,3)
FY09 FY10 FY11 FY12 FY13 FY14 FY15
38,8% 48,6%
53,2% 50,1%
41,6% 38,3%
40,6%
48,1%
Jun 2013 Dec 2013 Dec 2014 Dec 2015
90+ DPD ratio
90+ DPD provision coverage
11,4 11,1 9,6
7,4
3,8 3,3
34% 31%
28%
16% 14%
Apr2013
Jun2013
Dec2013
Dec2014
Dec2015
31 Mar2016
ELA (€ bn) ELA % total assets
3
10,5% 10,4% 14,0% 14,0%
8,4% 8,6%
12,5% 12,6%
Jun 2013 Dec 2013 Dec 2014 Dec 2015
CET1 ratio Leverage ratio
RWA Intensity
1 2
Change in 90+ DPD (€ bn)
71%
%
78% 85% 85%
4
5
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The journey so far… Significantly reduced reliance on ELA funding …
Source: Company filings
(1) Ratio of ELA funding % total assets for 31 March 2016 is based on total assets at 31 December 2015
11,4 11,1
9,9 9,6 9,5
8,8
7,7 7,4
6,9
5,9
4,9
3,8
3,3
34%
31% 31% 32%
31%
28% 28%
26%
23%
20%
16%
14%
Apr 2013 Jun 2013 Sep 2013 Dec 2013 Mar 2014 Jun 2014 Sep 2014 Dec 2014 Mar 2015 Jun 2015 Sep 2015 Dec 2015 31 Mar 2016¹
ELA (€ bn) ELA % total assets
Reduction achieved through:
• deleveraging actions
• deposit inflows
• share capital increase
• bond repayment by the Republic of Cyprus
The target is to fully repay ELA by end of 2017
6
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The journey so far…
… and improving funding structure
Source: Company filings
(1) Annualised; calculated as quarterly interest income / expense over average interest earning assets (interest earning assets defined as loans and advances to banks
and customers and debt portion of investments (for interim periods, debt is assumed to fill the same proportion of investments as at year end)
Improving L/D ratio and increasing Deposits to Assets
49% 48% 48% 49% 49% 51% 54% 56% 61%
145% 151% 148% 148% 141% 138% 136% 132%
121%
Dec 2013 Mar 2014 Jun 2014 Sep 2014 Dec 2014 Mar 2015 Jun 2015 Sep 2015 Dec 2015
Deposits to total assets Loans to deposits ratio (net)
Funding composition (€ bn) and interest margins
Interest income as % of interest earning assets1 Interest expense as % of interest earning assets1
Reduced reliance on ELA funding
15,0 14,1 13,8 13,3 13,2 13,6 13,6 13,6 14,2
9,6 9,5 8,8 7,7 7,4 6,9 5,9 4,9 3,8
1,4 1,4
1,4 0,9 0,9 0,8
0,5 0,5 0,7
1,7 1,6 1,8
1,8 1,8 1,9 1,9
1,7 1,5
2,7 2,8 2,8
3,8 3,5 3,5 3,5
3,5 3,1
6,3%
5,3% 5,4% 4,8%
4,6% 4,5% 4,2%
4,1% 3,9%
2,2% 1,6% 1,4% 1,4%
1,3% 1,1% 1,0% 1,1% 0,9%
4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15
Customer deposits ELA funding ECB funding Other liabilities Total equity
Lifting of
capital controls
in April 2015
7
49
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0
127
127
127
0
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114
BOC is well positioned to benefit from the Cypriot economic recovery
• Cypriot economic recovery exceeding expectations supported by a broad base
growth
• Improved credit rating allows the Government to refinance its debt with lower
yielding and longer term debt
Cypriot economic recovery 1
• Remains the engine of growth of the Cypriot economy given its dominant position
with c.40% market share of gross loans and c.30% of deposits
BOC on strong footing to benefit from
recovery 2
• World-class board with significant financial services expertise
• Present management has accomplished several key milestones and has a clear
agenda to create value for all stakeholders
Experienced management and board and
a more diversified shareholding structure 3
• Focus on core Cypriot business
• Intention to grow in the UK
Two-pronged
strategy articulated
around core Cypriot
bank and problematic
loans reduction
4
• Implementation of key pillars and plan of action Clear path to meeting medium term targets 5
Cyprus is the core
engine of growth
of the Bank
a
Significant
additional upside
from
management and
recovery of the
problematic loans
stock
• Additional provisions (booked in 4Q2015) brings the cash coverage ratio close to
50% (>100% including value of collateral)
• Restructuring of top exposures and problematic loans largely completed by the
RRD1 thus reducing delinquency ratios
• Recently passed foreclosure and loan sale legislation should help drive
repayments, refinancing and recovery
b
(1) Restructuring and Recoveries Division
8
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1 Cypriot economic recovery…
Cyprus Portgual Italy
Spain Greece Ireland
Baa1
Baa3
Ba2
B1
B3
Ca
Baa1
B1
Baa2
Ba1
Baa2
Caa3
Real GDP growth (%) Moody’s credit ratings
Source: EIU, credit ratings agencies, CBC
Caa2
Economic growth gaining momentum Credit ratings improving faster than peers
Improved rating and credit outlook reflected in reducing government bonds spreads
1,4% 0,3%
(2,4%)
(5,4%)
(2,5%)
1,6% 2,2% 2,5%
(3,4%)
(8,7%)
(3,9%)
2010 2011 2012 2013 2014 2015 2016E 2017E
Real GDP growth - Actual Initial Projections (EC)
Yield (%)
0
0,02
0,04
0,06
0,08
0,1
0,12
0,14
0,16
0,18
Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16
Cyprus 2019 (issued 06/2014) Cyprus 2022 (issued 04/2015) Cyprus 2025 (issued 11/2015) Cyprus 2020 (issued 02/2010)
9
Mar-16
49
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0
127
127
127
0
153
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191
191
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234
234
0
97
114
…driven by strong fundamentals
• Tourism and business
services sectors less
dependent on credit
provision
• Growth in manufacturing
and construction activity
• Construction activity
increased in 2Q2015.
Property prices showing
signs of stabilisation
• Potential for development of
energy / hydrocarbon
industry
Sector growth
• Corporate tax rate (12,5%)
• High levels of education
• Investment opportunities
from privatisation projects
• Strong institutional
framework and
effectiveness
Business enablers
• Strategic location –
crossroads of EMEA and
Asia
• Essential part of the
security dynamic in the
Eastern Mediterranean
region
• Potential resolution of the
Cyprus political problem
Geopolitical importance
• Small, flexible economy
• Recovery well under way
• Strong fiscal policy results
• Declining unemployment
• Negative inflation, reflecting
energy prices decline and
internal devaluation of the
economy
Economic adjustment
Tourism revenues (% of GDP)
Source: KPMG, PwC, Statistical Service of Republic of Cyprus, research reports, European Commission
40,6%
37,3%
22,1%
Upper secondary
Less than
Upper Secondary
Tertiary
Level of education, age 20-64 (2015)
Cyprus has the highest number of
university graduates per capita in Europe
33,3%
31,4%
29,7%
29,0%
28,0%
21,0%
20,0%
12,5%
12,5%
Corporate tax rate (2015)
Double taxation
avoidance
treaties with
c.50 countries
8,1% 8,1%
9,1%
9,9%
11,5% 11,6%
12,1%
2009 2010 2011 2012 2013 2014 2015
(6%) (5%)
(0%) (1%)
0% 0,4%
79%
103% 108% 109%
100% 95%
2012 2013 2014 2015 2016E 2017E
Government budget balance (% of GDP)
Gross public debt (% of GDP)
Government budget and debt
1
10
49
133
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255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
11%
15%
74%
General Insurance of Cyprus
CNP Cyprialife¹
Other
A privileged position in the Cypriot market
Dominant franchise in a recovering economy
38%
62%
Cyprus gross loans
(31 December 2015):
€58,4 bn
Source: Company information, Cyprus Ministry of Finance
(1) 49,9% owned by BoC
(2) Gross Written Premiums
BOC Other
28%
72%
27%
24%
49%
Eurolife
CNP Cyprialife¹
Other
Cyprus deposits
(31 December 2015):
€45,9 bn
Cyprus life insurance GWP2
(31 December 2015):
€307 mn
Cyprus non-life insurance GWP2
(31 December 2015):
€425 mn
2
Position is holding up well with selective market share gains
24,8% 25,3% 25,7% 26,5%
28,2% 28,2% 27,9%
38,8% 37,7% 38,5% 39,3%
37,9% 40,0% 40,1%
Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Jan-16 Feb-16
Deposits Loans
New lending of €0,6 bn during 2015 to support
economic recovery and promising sectors
51%
26%
Customer deposits in Cyprus increased by
€1,4 bn in 2015
11
Cyprus market share evolution
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114 Current shareholding of BOC (Dec-2015) Current Board composition
9,6%
7,2%
5,2%
5,0%
1,6%
59,2%
12,2%
Cyprus Popular Bank Public Co Ltd
Lamesa Holding S.A. (an affiliate of Renova Group)
TD Asset Management S.A.
EBRD
WL Ross
Other: Institutional investors and legal persons
Other: Individuals
Name Designation
Dr. Josef Ackermann Chairman
Independent
Mr. Wilbur Ross Vice Chairman
Independent
Mr. Maksim Goldman Vice Chairman
Not Executive
Mr. John Patrick Hourican Chief Executive Officer
Executive
Dr. Christodoulos Patsalides Finance Director
Executive
Mr. Arne Berggren Board member
Independent
Mr. Marios Kalochoritis Board member
Independent
Mr. Michalis Spanos Board member
Senior Independent
Mr. Ioannis Zographakis Board member
Independent
Mr. Michael Heger Board member
Nominated Independent1
Share capital increase - attracted high quality investors & world class Board 3
12 (1) Subject to ECB approval
49
133
156
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192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
(1) Profit before provisions and impairments, gains on derecognition and changes on expected cash flows on acquired loans, restructuring costs and discontinued operations
High NIM in Cyprus operations
384
423
354
379 386 369 367 366
1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15
788 1.017
(383)
634
54 23
(33) (10)
842 1.040
(416)
624
Net interest income Total income Total expenses Profit before provisions andimpairments¹, restructuring
costs and discontinuedoperations
Cyprus operations
Rest of operations
Group
Cyprus operations driving Group performance - FY2015 (€ mn)
88% 85% 87% 84% 87% 86% 85%
12% 15% 13% 16% 13% 14% 15%
2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15
Other income Fee and commission income
Steady fee and commission income in
Cyprus operations
Total income (€ mn) (bps)
Attractive and profitable core Cypriot business 4a
Growing customer deposit base in
Cyprus
12,7 11,7 11,3 11,6
12,7
Dec 2013 Jun 2014 Dec 2014 Jun 2015 Dec 2015
303 246 267 262 250 254 251
FY2015: 373 FY2014: 385
Contribution of Cyprus
operations %
Customer deposits in Cyprus (€ bn)
94% 98% 92% 102% 58%
13
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Gross loans and customer deposits (€ bn) Loans by sector as at 31 December 2015
0,91
1,03
1,13 1,14 1,21
1,30 1,36 1,39
1,45 1,49
Dec-14 Mar-15 Jun-15 Sep-15 Dec-15
Gross loans Customer deposits
Intention to grow the UK operations
76%
21%
2% 1%
Corporate
SMEs
Consumer credit
Housing
4a
• BoC UK has a branch in North London and business centres in Central London, South London and Birmingham.
• Focuses on meeting the needs of entrepreneurs and owner-managed businesses and is primarily funded by retail deposits.
• Intends to grow its lending business to take advantage of its capital and liquidity position in order to improve its profitability.
• A new CEO was appointed in December 2015 to lead the Bank into the next phase of its development. Previously with Westpac,
Western Australia, (General Manager for Retail and Business) and with Bank of Ireland UK (Post office j.v.)
UK P&L Highlights (€ mn) FY2015
Net interest income 29
Fees and commission income 5
Total income 34
Total expenses (30)
Profit before provisions and impairments 4
Profit before tax 12
Profit after tax 11
14
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Evidence of progression across all asset quality metrics
Source: Company filings
(1) Loans in arrears for more than 90 days (90+ DPD) are defined as loans with a specific provision and loans past-due for more than 90 days
(2) As per EBA definition
15,0 15,2 14,8 14,2 14,0
62,9% 63,0% 61,9% 62,2% 61,8%
Dec 2014 Mar 2015 Jun 2015 Sep 2015 Dec 2015
NPEs² (€ bn) NPE² ratio
Improved provision coverage
38% 39% 39% 38%
41% 42% 43% 41%
48%
35% 35% 33% 34% 34% 35% 36% 35%
39%
Dec 2013 Mar 2014 Jun 2014 Sep 2014 Dec 2014 Mar 2015 Jun 2015 Sep 2015 Dec 2015
90+ DPD¹ provision coverage NPE² provision coverage
Increasing momentum in reduction of 90+ DPD1 vs lagging NPEs2 reduction due to definition
12,7 12,8 12,6 12,0
11,3
53,2% 53,1% 52,9% 52,5%
50,1%
Dec 2014 Mar 2015 Jun 2015 Sep 2015 Dec 2015
90+ DPD¹ (€ bn) 90+ DPD¹ ratio
4b
Evolution of 90+ DPD (€ mn)
945 1.329 1.399
2.723
5.311
(247) (164)
386
(325)
136
(143) (649) (668)
FY09 FY10 FY11 FY12 FY13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15
FY14:
-350
FY15:
-1.324
15
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Unprovided 90+ DPD exposure fully covered by tangible collateral
• For Cyprus operations, 90+
DPD provision coverage
increased to 46% at 31
December 2015,
• Overall coverage of 90+ DPD
loans increased to 115% at
31 December 2015
• Puts BOC in a strong position
to explore market based
solutions for parts of the
problematic loan book
41% 43% 51%
77% 72% 68%
118% 115% 119%
Corporate
32% 33% 39%
79% 75% 73%
111% 108% 112%
SME
26% 25% 31%
81% 81% 79%
107% 106% 110%
Retail
(Housing)
49% 51% 57%
56% 53% 49%
105% 104% 106%
Retail
(Other)
38% 39% 46%
76% 72% 69%
114% 111% 115%
Total BOC
Cyprus
Dec-14 Sep-15 Dec-15
Loan loss reserve coverage Tangible coverage
Source: Company information
4b
16
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
New legislation is helping in a number of important areas
• Insolvency framework enacted in May 2015
• Introduction of Examinership provides creditor „cram down‟ mechanism for the first time
• Regulation of insolvency practitioners introduced in 4Q2015
• Foreclosure law enacted in September 2014, in force in August 2015, 1St auctions end of June 2016
• Sale of loans bill approved
• Tax incentives for customers to agree to consensual solutions
• Tax incentives including exemption from CGT1 and transfer fees in sale of property to the Bank
• Ongoing passport scheme for international investors is driving cash collections from property developers
• Securitisation law expected to be passed in 2016
The toolkit to
support debt
restructuring is
now largely in
place…
…delivering a
number of
important
benefits for the
Bank
Incentivises faster
consensual solutions
Reduced time to
execute non
consensual solution
Reduces cost of
restructurings
Provides greater
options to deleverage
Supports and
incentivises faster
cash collection
Improved quality and
regulation of
insolvency
practioners
17
4b
Source: Company information
(1) Capital Gains Tax
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
RRD is driving rapid and sustainable asset quality improvements
Bespoke tactical plans are in place for each segment within RRD, delivering asset quality improvements across the book…
• 23 connections
• >€100 mn debt
• Large diversified
groups
Major
Corporate
Management
Business unit summary Key management actions Progress
18
4b
Corporate
management
SME
Recoveries
Gross debt 90+ DPD
€2,9 bn
€2,0 bn
• c200 connections
• €6-100 mn debt
• Mid market
businesses Gross debt 90+ DPD
€1,8 bn
€1,0 bn
• c.1900
connections
• <€6 mn debt
• Small OMBs Gross debt 90+ DPD
€1,4 bn
€1,0 bn
• Retail €1,4 bn,
21k customers
• SME €1,5 bn,
4k customers
• Corporate €2,4 bn
c.250 connections Gross debt 90+ DPD
€5,3 bn €5,3 bn
• c. 94 experienced restructuring officers
• Portfolios assigned based on size/complexity
• Sustainable solutions using (amongst others):
- Debt:Equity & Debt:Asset swaps
- Re-tranching, including „equity like‟ PIK
• Support from internationally experienced
restructuring specialists
• External lawyers (UK & CY) used extensively
• Comprehensive improvements to lending
documents, security, step in rights, monitoring
& covenants
• 8 specialist geographically spread BU‟s
• New team added in 1Q2016 to drive pace
• Portfolio analysis with targeted campaigns
• Product range enhanced e.g. split & freeze
• Close monitoring & clearing of early arrears
• International specialists added 4Q2015
• Skills/experience transfer from other teams
• Increased focus on quicker consensual deals
• Step up aggressive actions for non co-
operative borrowers
Good progress
• Active negotiations ongoing with
all major borrower
• Good prospects to conclude and
execute deals
Good progress
• Active negotiations ongoing with
all major borrower
• Good prospects to conclude and
execute deals
Rapidly improving progress
• New team and approach
delivering results
• Underlying economic
improvements helping
Slower but improving progress
• Refreshed approach in corporate
is starting to deliver results
• Foreclosure actions are important
to building & maintaining pace
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Results are being improved by rigorous monitoring and oversight
• Department „stretch‟ targets, focused on materially outperforming budget for all key asset quality metrics,
are set at the outset of each quarter
• Stretch targets are supported by specifically identified and measurable actions
• Star chamber sessions are held by the CEO, GCRO and D-RRD with all departments fortnightly
• Performance continuously assessed with immediate corrective actions taken
Star chamber
sessions
RRD asset quality
benefits tracking
A results focused culture continues to be driven top down throughout the organisation via a number of important actions…
• Quarterly asset quality „stretch‟ targets embedded in a benefits tracker update daily – deal by deal
granularity
• Provides continuous visibility on expected quarterly results, with „gap‟ analysis identifying urgent action
areas
RRD weekly
pipeline calls
• Weekly pipeline calls are held by D-RRD with all team leaders across SME, Recoveries Retail/SME and
Recoveries Corporate
• Provides visibility on weekly applications, approvals and deal executions over the entire „small ticket‟ book
and the strategically important large ticket Corporate Recoveries book
• Weekly „promises‟ are closely monitored driving „results focused‟ behavior across the book
Daily monitoring
of early arrears
• Risk lead a continuous review of early arrears and redefaults across the book allowing issues to be
identified early
• Corrective actions immediately taken where relevant
19
4b
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Performance of restructured loans
0,44
0,08 0,27
0,17
0,38
0,15 0,29
0,82
0,09 0,11 0,11 0,09 0,20 0,24
0,32 0,33 0,34
0,64
0,23
0,42 0,44
0,69
0,56
0,73
1,35
0,63
1Q2014 2Q2014 3Q2014 4Q2014 1Q2015 2Q2015 3Q2015 4Q2015
Corporate SMEs Retail Total restructuring Average restructuring
FY2014:
€1,73 bn
Increased restructuring activity with high success rates
79%
4% 3%
14%
64%
9% 7%
20%
65%
5% 4%
26%
73%
13%
7% 7%
78%
12%
4% 6%
73%
16%
6% 5%
79%
12%
5% 4%
No arrears 1-30 dpd 31-90 dpd Over 90 dpd
1Q2014 2Q2014 3Q2014
4Q2014 1Q2015 2Q2015
3Q2015
12%
Average
0.09 0.04 0.06 0.07 0.07 0.11 0.19
FY2015:
€3,33 bn
73%
(1) The performance of loans restructured during 4Q2015 is not presented in this graph as it is too early to assess it
4b
Restructuring activity by quarter (€ bn)
As at 31 December 20151 • Stalled restructuring negotiations lead to foreclosure or insolvency
• This drives increased costs and delays in realising collateral
• The Bank is achieving an accelerated and cheaper foreclosure
process via the execution of consensual debt:asset swaps
• A new division of the Bank, led by a Director on the executive
Board, has now been established (REMU) to:
a) on board assets acquired either consensually or non
consensually through debt:asset swaps,
b) manage assets, including selective investment
c) develop and execute exit strategies to monetise assets
Set up of Real Estate Management Unit (REMU)
20
On average 73% of loans restructured
post 31 December 2013 have no arrears
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Source: Company reports
(1) IFRS9 impact, which is effective as from 1 January 2018, has not been taken into account for the purpose for the targets. Targets are set on the basis of the present regulatory
environment
Clear path to meeting medium term targets 5
Category
Key
performance
indicators
Dec
2014
Dec
2015
Targets
2017
Medium
term
targets
Asset
quality
90+ DPD ratio 53% 50% <30%
90+ DPD
coverage 41% 48% 40%-50% >50%
Provisioning
charge1 3,6% 4,3% <1,0% <1,0%
Funding
ELA % Assets; €
bn
28%;
€7,4 bn
16%;
€3,8 bn
Fully
repay
Net loans %
deposits 141% 121%
100%-
120%
Capital CET1 (transitional)
ratio 14,0% 14,0% >12% >15%
Margins
and
efficiency
Net interest
margin 3,9% 3,8% ~3,25% ~3,00%
Fee and
commission
income/ total
income
13% 15% Increase >20%
Cost to income
ratio 37% 40% 40%-45% 40%-45%
Balance
sheet Total assets € bn €26,8 bn €23,3 bn >€25 bn
Key pillars & plan of action
• Intensify restructuring and workout activities of delinquent
borrowers
• Increase pace of restructurings and focus on more complex
and older cases on the back of the foreclosure law
• REMU to on-board, manage and dispose of properties
acquired
• Boost deposit franchise, leveraging on increasing customer
confidence and improving macroeconomic conditions
• Access Debt Capital Markets on the back of improved ratings,
stronger financial soundness and better prospects
• Access ECB funding
• Direct lending into promising sectors to fund the recovery of
the Cypriot economy
• Diversify income stream by boosting fee income from
international business, wealth, and insurance
• New loan origination, while maintaining lending yields
• Expand the UK franchise by leveraging the UK subsidiary
• Tangible savings through a targeted reduction program for
operating expenses
• Introduce appropriate technology/processes to enhance
product distribution channels and reduce operating costs
• Introduce HR policies aimed at enhancing productivity
• Deliver appropriate medium-term risk-adjusted returns
1. Drastically
reduce
problem
loans
2. Normalise
funding
structure;
Eliminate
ELA
3. Focus on
core
markets
4. Achieve a
lean
operating
model
5. Deliver
returns
21
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Macro and
geo-political
factors
• Slower economic recovery or regress into recession
• Failure of Government to cover future funding needs post the
end of ESM/IMF funding program (March 2016)
Asset quality • Credit risk concentration – large corporate exposures
• High concentration of collaterals in real estate
• Success in restructuring/addressing large
problematic exposures
• Debt for asset swaps, debt for equity swaps,
sale of loans
Funding & capital
External challenges – limited influence
• Further deterioration of the Russian economy
• Proposed tax reform in other jurisdictions (e.g. Russia
deoffshorisation)
Internal challenges – able to mitigate Action plan
• Continued reliance on Eurosystem funding
• Cypriot deposit base growing
• ELA funding being reduced fast
• Available contingent liquidity of €2,2 bn can be
derived from the €2,9 bn government
guaranteed bonds
• Gradual return to wholesale funding markets
Litigation • Pending legal claims including CySEC1 investigations and
bail-in related litigations among others
• Appropriate provisions have been made in
respect of pending legal proceedings
• Diversification of business model away from
Russia / Ukraine geographies
Action plan
• Stronger Bank is better able to stimulate the
economy
• Economic uncertainty in Greece and potential impact to the
periphery • Minimum direct exposure in Greece
Main challenges
(1) Cyprus Securities and Exchange Commission 22
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Improve visibility and share liquidity by way of a London listing
Low levels of liquidity of c.€0,2 mn ADTV
Low levels of research coverage – only covered by HSBC
No index inclusion
Athens listing no longer suitable given lack of Greek banking
operations
Potential inclusion in FTSE 250 index series
Greater visibility and likely increased analyst coverage…
… is expected to lead to greater stock liquidity
A more natural location for the Bank‟s profile
Current listing New listing (in 2H2016)
CSE ATHEX CSE LSE
23
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114 • Unrivalled franchise in an economy that is gaining momentum
• CET1 ratio (transitional) at 14,0%, leverage ratio at 12,6%, one of the highest ratios among EU peers
• Improving funding structure with an increasing deposit base in Cyprus; L/D ratio at 121% and
customer deposits at 61% of total assets
• ELA reduced by EUR8,1 bn or 71% to EUR3,3bn; To fully repay by end-2017
• 90+ DPD down by EUR1,3 bn or 10% during FY2015; 90+ DPD provision coverage improved by 7
percentage points to 48% at 31 December 2015
• Foreclosure legislation and insolvency framework can now be used as one of the tools for the effective
management of problem loans
• Set-up of REMU to take ownership of, manage and monetise real estate assets in settlement of customer
obligations
• Recurring pre-provision profitability stabilising
• The proposed premium listing in London will enhance the Group‟s visibility and stock liquidity
Key takeaways
24
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Appendix – Financial overview
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Income statement review
€ mn FY2015 FY20143 yoy % 4Q2015 3Q20154 qoq %
Net interest income 842 969 (13%) 198 205 (4%)
Fees and commission income 154 152 1% 38 36 7%
Insurance income net of insurance claims 48 46 5% 16 12 39%
Core income 1.044 1.167 (11%) 252 253 -
Other income (4) 1 - 1 (2) 141%
Total income 1.040 1.168 (11%) 253 251 1%
Total expenses (416) (427) (3%) (119) (102) 16%
Profit before provisions and impairments1 624 741 (16%) 134 149 (10%)
Provisions for impairment of customer loans net of gain on derecognition of loans
and changes in expected cash flows on acquired loans (959) (770) 25% (630) (96) 560%
Impairments of other financial and non financial assets (62) (90) (31%) (24) (6) 313%
Share of profit from associates 6 5 22% 2 1 -
(Loss)/profit before tax, restructuring costs and discontinued operations (391) (114) 244% (518) 48 -
Tax (9) (11) (15%) 8 (8) -
Loss attributable to non-controlling interests 6 19 (64%) 1 5 -
(Loss)/profit after tax from continuing operations2 (394) (106) 271% (509) 45 -
Restructuring costs (43) (36) 20% (16) (5) 205%
Loss from disposal group held for sale/discontinued operations (38) (166) (77%) 0 (9) (100%)
Net gain/(loss) on disposal of non-core assets 37 47 (22%) 13 (18) (177%)
(Loss)/profit after tax (438) (261) 68% (512) 13 -
Net interest margin 379 bps 394 bps (15) bps 369 bps 370 bps (1) bp
Cost-to-Income ratio 40% 37% +3 p.p. 47% 41% +6 p.p.
(1) Profit before provisions and impairments, gains on derecognition and changes on expected cash flows on acquired loans, restructuring costs and discontinued
operations.
(2) (Loss)/profit after tax and before restructuring costs, discontinued operations and net profit on disposal of non-core assets.
(3) The FY2015 is not comparable to the FY2014 given the significant deleveraging completed since then, including, among others, the partial repayment of the
sovereign bond held by the Bank, by the Republic of Cyprus on 1 July 2014, and the disposal of the majority of the Russian operations during 3Q2015.
(4) As from 4Q2014, the Group‟s operations in Russia are treated as disposal group held for sale and results have been presented accordingly as discontinued
operations according to IFRS5. In September 2015, the Bank completed the sale of the majority of its Russian operations. The part of the operations not disposed of,
has ceased to be classified as held for sale and its results are presented as part of the continuing operations. 26
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Balance sheet review
€ mn % change 31.12.15 31.12.14
Deposits by banks 49% 242 162
Funding from central banks (46%) 4.453 8.284
Repurchase agreements (36%) 368 580
Customer deposits 12% 14.181 12.624
Debt securities in issue 2% 1 1
Other liabilities (9%) 948 1.046
Non current liabilities and disposal groups
classified as held for sale (100%) 0 611
Total liabilities (13%) 20.193 23.308
Share capital 0% 892 892
Capital reduction reserve and share
premium 0% 2.505 2.505
Revaluation and other reserves 76% 259 147
Accumulated losses 661% (601) (79)
Shareholders’ equity (12%) 3.055 3.465
Non controlling interests 44% 23 16
Total equity (12%) 3.078 3.481
Total liabilities and equity (13%) 23.271 26.789
€ mn % change 31.12.15 31.12.14
Cash and balances with Central Banks 24% 1.423 1.139
Loans and advances to banks (20%) 1.314 1.647
Debt securities, treasury bills and equity
investments (60%) 1.009 2.541
Net loans and advances to customers (5%) 17.192 18.168
Other assets (4%) 2.284 2.378
Non current assets and disposal groups
classified as held for sale (95%) 49 916
Total assets (13%) 23.271 26.789
Note: As from 4Q2014, the Group‟s operations in Russia are treated as disposal group held for sale and results have been presented accordingly as discontinued
operations according to IFRS 5. In September 2015, the Bank completed the sale of the majority of its Russian operations. The part of the operations not disposed of,
has ceased to be classified as held for sale and its results are presented as part of the continuing operations. 27
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
31-Dec-15 Ratios Group FY2015
Performance
ROAA (1,7%)
ROAE (12,9%)
Net Interest Margin 3,79%
Cost to income ratio 40%
Loans to deposits 121%
Asset Quality
90+ DPD/ 90+ DPD ratio €11.329 mn (50,1%)
90+ DPD coverage 48%
Cost of risk 4,3%1
Provisions / Gross Loans 24,1%
Capital
Transitional Common Equity Tier 1 capital €2,748 mn
CET1 ratio (transitional basis) 14,0%
Total Shareholder‟s Equity / Total Assets 13,1%
BOC – Main performance indicators
Shareholder's equity
(€ mn) Intangible assets (€ mn) # shares (mn) Book value per share
Tangible book value
per share
31/03/2014 2.689 130 4.700 0,57 0,54
30/06/2014 2.748 135 4.756 0,58 0,55
30/09/2014 3.728 135 8.922 0,42 0,40
31/12/2014 3.465 127 8.922 0,39 0,37
31/03/2015 3.502 130 8.923 0,39 0,38
30/06/2015 3.506 128 8.923 0,39 0,38
30/09/2015 3.518 131 8.923 0,39 0,38
31/12/2015 3.055 134 8.923 0,34 0,33
(1) Calculated as the provisions for impairment of customer loans, including provisions of discontinued operations, (in total €1.307 mn) net of
gains on derecognition and changes in expected cash flows on acquired loans (totalling €305 mn) over average gross loans 28
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Overseas non-core exposures (€ mn)
Recent balance sheet deleveraging focused on non-core exposures
The non-core overseas exposures at 31 December 2015
were as follows:
Greece: The net exposure comprised:
(a) Net on-balance sheet exposures (excluding foreclosed
properties) totalling €22 mn;
(b) 641 foreclosed properties with a book value of €173 mn;
(c) off-balance sheet exposures totalling €131 mn; and
(d) lending exposures to Greek entities in the normal
course of business in Cyprus totalling €70 mn, and
lending exposures in Cyprus with collaterals in Greece
totalling €81 mn.
Romania: The overall net exposure is €312 mn
Russia: Following the disposal of Uniastrum Bank and
certain other Russian assets the remaining net exposure
(on and off balance sheet) in Russia is €114 mn
164 155 155 120 114
520 439
368 354
312
179
200
199 192
173
97
76
56 49
22
185
154
133
132
131
166
155
140
139
151
Dec-14 Mar-15 Jun-15 Sep-15 Dec-15
Greece other¹
Greece net off balance sheet exposure
Greece net on balance sheet exposure
Greece Foreclosed Properties
Romania: Net exposure
Russia: Net exposure
1.311
1.179
1.051
477
986
31%
512
528
585
627
903
(1) Lending exposures to Greek entities in the normal course of business in Cyprus and lending exposures in Cyprus with collaterals in Greece 29
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Strong capital position above regulatory minimum and European peer
average
• CET1 ratio of 14,0% (transitional) and 13,1% (fully-loaded), well ahead of regulatory minimum of 11,75%1 and European peer average2 of 13%
• Leverage ratio of 12,6%, stronger than European peers2
• The Bank maintains a strong CET1 and leverage ratio position despite elevated provisions in 4Q2015 due to assumption changes in the Bank‟s provisioning
methodology in compliance with ECB/SERP
Ahead of European peers and regulatory minimum
Source: Company filings
1. CBC prescribed minimum of 11,75%
2. Peer group consists of large European banks
16,8
%
16,6
%
16,5
%
16,1
%
16,0
%
15,5
%
15,5
%
14,9
%
14,5
%
13,1
%
13,1
%
13,1
%
13,0
%
12,4
%
12,0
%
11,9
%
11,6
%
11,4
%
11,4
%
11,4
%
11
,1%
10,9
%
10,9
%
10,9
%
10,7
%
10,3
%
10,1
%
Pe
er
1
Pe
er
2
Pe
er
3
Pe
er
4
Pe
er
5
Pe
er
6
Pe
er
7
Pe
er
8
Pe
er
9
Bo
C
Pe
er
10
Pe
er
11
Pe
er
12
Pe
er
13
Pe
er
14
Pe
er
15
Pe
er
16
Pe
er
17
Pe
er
18
Pe
er
19
Pe
er
20
Pe
er
21
Pe
er
22
Pe
er
23
Pe
er
24
Pe
er
25
Pe
er
26
Peer average2: 13,0%
Regulatory minimum: 11,8%
CET1 ratio fully loaded (2015)
Leverage ratio fully loaded (2015)
12,6
%
12,1
%
10,7
%
9,0
%
6,8
%
6,3
%
6,0
%
5,6
%
5,3
%
5,3
%
5,2
%
5,0
%
4,8
%
4,7
%
4,7
%
4,6
%
4,6
%
4,5
%
4,5
%
4,5
%
4,5
%
4,2
%
4,1
%
4,0
%
4,0
%
3,8
%
3,5
%
Bo
C
Pe
er
5
Pe
er
2
Pe
er
11
Pe
er
10
Pe
er
8
Pe
er
25
Pe
er
7
Pe
er
1
Pe
er
9
Pe
er
19
Pe
er
15
Pe
er
12
Pe
er
13
Pe
er
26
Pe
er
3
Pe
er
24
Pe
er
14
Pe
er
17
Pe
er
18
Pe
er
21
Pe
er
4
Pe
er
16
Pe
er
22
Pe
er
23
Pe
er
6
Pe
er
20
Peer average2: 5,5%
30
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Movement of capital and equity dominated by one-off higher provisions
taken at the end of 2015
The Bank continues to be well capitalised…
14,0%
2,7%
0,8% 14,0% 13,1%
(3,5%)
(0,9%)
CET1 ratio 2014(transitional)
Profit before provisions Provisions¹(post-tax)
RWAs change CET1 ratio 2015(transitional)
Deferred tax asset CET1 ratio 2015 (fullyloaded)
Source: Company filings
(1) Including gain on derecognition
…despite high 2015 provisioning in compliance with ECB/SREP
CET1 ratio evolution
Equity evolution (€ mn)
3.481
884
68 3.078
(22) (1.317)
(16)
Total equity 2014 Continuing operations Discontinuedoperations
Provisions(post-tax)
Other comprehensiveincome
Other Total equity 2015
Profit before provisions net of
impairments
31
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Analysis of Liabilities and Equity (€ bn)
2,7 2,8 2,8 3,8 3,5 3,5 3,5 3,5 3,1 1,7 1,6 1,8
1,8 1,8 1,9 1,9 1,7 1,5
9,6 9,5 8,8 7,7 7,4 6,9 5,9 4,9 3,8
1,4 1,4 1,4 0,9 0,9 0,8 0,5
0,5 0,7
15,0 14,1 13,8 13,3 13,2 13,6 13,6
13,6 14,2
Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15
Total equity Other liabilities ELA ECB funding Customer deposits
30,4 29,4 28,6 27,5 26,8 26,7
Funding structure
25,4 24,2 23,3
Analysis of Liabilities and Equity (%)
9% 9% 10% 14% 13% 13% 14% 15% 13% 6% 6% 6%
6% 7% 7% 7% 7% 7%
31% 32% 31% 28% 28% 26% 23% 20% 16%
5% 5% 5% 3% 3% 3% 2% 2% 3%
49% 48% 48% 49% 49% 51% 54% 56% 61%
Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15
Total equity Other liabilities ELA ECB funding Customer deposits
32
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Deposits by geography
9,67 8,66 8,20 8,09 7,79 7,85 8,07 8,42 8,76 8,94
4,75 4,05
3,79 3,59 3,46 3,47 3,57 3,21 3,40 3,75
1,30
1,24 1,25 1,25 1,29 1,30 1,36 1,39 1,45 1,49
1,25
1,02 0,83 0,87 0,79 0,55 0,61 0,61
Jun-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15
Cyprus non-IBU Cyprus IBU¹ UK Russia & other countries²
16,97 14,97 14,07 13,80 13,33 13,17
Analysis of Deposits by Geography and by Type
13,61 13,63 13,61 14,18
Deposits by type
12,72 10,55 9,59 9,13 8,53 7,88 8,16 8,14 7,97 8,16
0,83
0,93 0,95 0,95
0,84 0,96 0,97 1,02 1,01 1,03
3,42
3,49 3,53 3,72
3,96 4,33 4,48 4,47 4,63 4,99
Jun-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15
Time deposits Savings accounts Current & demand accounts
16,97 14,97 14,07 13,80 13,33 13,17 13,61 13,63 13,61 14,18
31 December 2015 (%)
63%
26%
11% Cyprus – non IBU
Cyprus – IBU¹
UK
58%
7%
35%
Timedeposits
Savingsaccount
Currentanddemandaccount
31 December 2015 (%)
Total Cyprus 89%
(1) IBU- Division servicing exclusively international activity companies registered in Cyprus and abroad and non-residents
(2) Other countries: Romania and Ukraine (until March 2014)
(€ bn)
(€ bn)
Total
Total
33
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Gross loans by geography
22,02 21,72 21,20 21,32 21,19 20,98 20,66
1,17 1,11 0,91 1,03 1,13 1,14 1,21
1,30 1,21 0,97 1,07 1,03 0,26 0,25
0,80 0,70 0,69 0,67 0,58
0,49 0,48
Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15
Cyprus UK Russia Other countries¹
25,30 24,74 23,77 24,09
Gross loans by Geography and by Customer Type
23,93 22,86 22,59
Gross loans by customer type
31 December 2015 (%)
91,4%
5,3% 1,2%
2,1%
Cyprus
UK
Russia
Othercountries¹
50,6%
20,7%
19,0%
9,7%
Corporate
SME
Retailhousing
Retailother
31 December 2015 (%)
(1) Other countries: Greece and Romania
(€ bn)
(€ bn)
Total
Total
12,61 12,17 11,83 12,10 12,03 11,56 11,42
5,50 5,54 5,09 5,02 4,99 4,75 4,68
4,67 4,61 4,41 4,43 4,39 4,35 4,31
2,52 2,42 2,44 2,54 2,52 2,20 2,18
Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15
Corporate SMEs Retail housing Retail other
25,30 24,74 23,77 24,09 23,93 22,86 22,59
34
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Asset quality
NPEs are focused in the core Cypriot business…
…mostly in large corporates and SMEs
94,9%
0,5% 1,8% 2,8%
Cyprus
UK
Russia
Othercountries¹
51,5%
24,6%
14,1%
9,8% Corporate
SME
Retail housing
Retail other
(1) Other countries: Greece and Romania
13,33 13,75 13,86 13,59 13,49 13,26
0,26 0,11 0,11
0,10 0,08
0,07
0,57 0,52 0,64
0,65 0,26
0,25
0,57 0,58
0,56 0,47
0,39 0,39
14,73 14,96 15,17
14,81
14,22 13,97
Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15
Cyprus UK Russia Other countries¹ Total
NPEs by geography (€ bn)
7,98 8,17 8,18 7,75 7,37 7,19
3,64 3,53 3,57 3,60 3,51 3,44
1,66 1,82 1,93 1,95 1,98 1,97
1,45 1,44 1,49 1,51 1,36 1,37
14,73 14,96 15,17 14,81 14,22 13,97
Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15
Corporate SMEs Retail housing Retail other Total
NPEs by customer type (€ bn)
As of December 2015
As of December 2015
NPE reduction across all parts of the business over the past year
35
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Asset quality
(€ mn) Dec-15 Sep-15 Jun-15 Mar-15 Dec-14
A. Gross Loans after Fair value on Initial recognition 21.385 21.597 22.575 22.540 22.206
Fair value on Initial recognition 1.207 1.266 1.351 1.545 1.566
B. Gross Loans 22.592 22.863 23.926 24.085 23.772
B1. Loans with no arrears 10.443 9.925 10.178 10.038 10.065
B2. Loans with arrears but not impaired 3.049 3.611 4.105 4.627 4.413
Up to 30 DPD 469 585 668 662 562
31-90 DPD 351 355 435 596 492
91-180 DPD 144 200 227 344 440
181-365 DPD 259 374 529 758 926
Over 1 year DPD 1.826 2.097 2.246 2.267 1.993
B3. Impaired Loans 9.100 9.327 9.644 9.420 9.294
With no arrears 876 848 969 1.006 1.153
Up to 30 DPD 78 66 91 68 149
31-90 DPD 24 60 121 275 142
91-180 DPD 65 152 167 181 143
181-365 DPD 310 464 489 445 685
Over 1 year DPD 7.747 7.737 7.807 7.445 7.022
(90+ DPD)1 11.329 11.998 12.646 12.789 12.653
90+ DPD ratio (90+ DPD / Gross Loans) 50,1% 52,5% 52,9% 53,1% 53,2%
Accumulated provisions 5.445 4.933 5.381 5.354 5.140
Gross loans provision coverage 24,1% 21,6% 22,5% 22,2% 21,6%
90+ DPD provision coverage 48,1% 41,1% 42,5% 41,9% 40,6%
+
+
+
+
=
(1) Loans in arrears for more than 90 days (90+ DPD) are defined as loans with a specific provision and loans past-due for more than 90 days 36
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Asset quality
90+ DPD by Geography (€ bn) 90+ DPD ratios by Geography
11,28 11,60 11,47 11,53 11,48 11,27 10,63
0,51 0,55 0,51 0,60 0,61
0,26
0,25
0,28 0,26 0,09 0,11 0,09
0,08
0,07
0,52 0,57
0,58 0,55 0,47
0,39
0,38
Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15
Cyprus UK Russia Other countries¹
12,59 12,98 12,65 12,79 12,65 12,00 11,33
51%
53%
54%
54%
54%
54%
51%
39%
46%
52%
56%
59%
100%
100%
24%
23%
10%
11%
8%
7%
6%
65%
80%
84%
82%
83%
80%
80%
Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15
Cyprus Russia UK Other countries¹
(1) Other countries: Romania and Greece
37
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Asset quality
90+ DPD inflows – Cyprus operations (€ bn) 90+ DPD inflows – Corporate Loans (€ bn)
90+ DPD inflows – SMEs Loans (€ bn)
0,68
0,60
0,34 0,36
0,22
0,11
0,39
3Q2014 4Q2014 1Q2015 2Q2015 3Q2015 4Q2015
90+ DPD inflows Average quarterly inflows
90+ DPD inflows in the Cyprus operations have been significantly reduced
90+ DPD inflows – Retail (€ bn)
0,29
0,37
0,14 0,20
0,09 0,02
0,18
3Q2014 4Q2014 1Q2015 2Q2015 3Q2015 4Q2015
Corporate 90+ DPD inflows Average quarterly inflows
0,17
0,10 0,09 0,08 0,06 0,04 0,09
3Q2014 4Q2014 1Q2015 2Q2015 3Q2015 4Q2015
SMEs 90+ DPD inflows Average quarterly inflows
0,22
0,13 0,11 0,08 0,07 0,05
0,11
3Q2014 4Q2014 1Q2015 2Q2015 3Q2015 4Q2015
Retail 90+ DPD inflows Average quarterly inflows
38
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Asset quality
90+ DPD (€ bn) and Quarterly change of 90+ DPD (€ mn)
321 380 329
(85)
265 410
558
96 232
156
402
609
100 64
1.319 1.240
3.319
1.972
20
(247) (164)
386
(325)
136
(143)
(649) (668)
1,3 1,6 2,0 2,3 2,2 2,5
2,9 3,5 3,6 3,8 4,0
4,4 5,0 5,1 5,1
6,5
7,7
11,0
13,0 13,0 12,8 12,6 13,0 12,7 12,8 12,6
12,0 11,3
12-2
008
03-2
009
06-2
009
09-2
009
12-2
009
03-2
010
06-2
010
09-2
010
12-2
010
03-2
011
06-2
011
09-2
011
12-2
011
03-2
012
06-2
012
09-2
012
12-2
012
06-2
013¹
09-2
013
12-2
013
03-2
014
06-2
014
09-2
014
12-2
014
03-2
015
06-2
015
09-2
015
12-2
015
Quarterly change of 90+ DPD (€ mn)
90+ DPD (€ bn)
FY 2009
€945 mn
FY 2010
€1.329 mn
FY 2011
€1.399 mn
FY 2012
€2.723 mn
FY 2013
€5.311 mn
FY 2014
-€350 mn
FY 2015
-€1.324 mn
(1) Information for 1Q2013 and 2Q2013 is not available as it has not been possible to publish the financial results for the three months ended 31 March 2013
90+ DPD
annual change
39
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114 Group 90+ DPD by Customer type (€ bn)
90+ DPD inflows by customer type - Cyprus operations (€ bn)
90+ DPD inflows – Cyprus operations (€ bn)
7,19 7,18 7,10 6,75 6,25
3,07 3,14 3,13 3,03 2,90
1,22 1,26 1,18 1,14 1,08
1,17 1,21 1,24 1,08
1,10
12,65 12,79 12,65 12,00
11,33
31.12.14 31.03.15 30.06.15 30.09.15 31.12.15
Corporate SMEs Retail other Retail housing
0,68
0,60
0,34 0,36
0,22
0,11
0,39
3Q2014 4Q2014 1Q2015 2Q2015 3Q2015 4Q2015
90+ DPD inflows Average quarterly inflows
Asset quality
0.37
0,29
0,17
0,22
0,14
0,09 0,11
0,20
0,08 0,08 0,09 0,06 0,07
0,02 0,04 0,05
Corporate SMEs Retail
3Q2014 4Q2014 1Q2015 2Q2015 3Q2015 4Q2015
0.10
0.13
0,18
0,09 0,11
Average
• Most of the 90+ DPD reduction for FY2015 relates to Corporate
loans, accounting for about 70% of the reduction
• 90+ DPD inflows (Cyprus operations) have been reduced
significantly, totalling €0,11 bn for 4Q2015, compared to an
average of €0,39 bn for the last six quarters
• Although there was as reduction in 90+ DPD inflows across all
types of loans, 90+ DPD inflows for Corporate loans have
exhibited the most improvement
90+ DPD inflows in the Cypriot operations have been reduced significantly
40
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114 Total Bank – Cyprus
79%
4% 3%
14%
64%
9% 7%
20%
65%
5% 4%
26%
73%
13% 7% 7%
78%
12%
4% 6%
73%
16%
6% 5%
79%
12%
5% 4%
0%
20%
40%
60%
80%
100%
No arrears 1-30 dpd 31-90 dpd Over 90 dpd
1Q2014 2Q2014 3Q2014 4Q2014
1Q2015 2Q2015 3Q201573%
95%
2% 1% 2%
83%
3% 7% 7%
67%
1% 2%
30%
97%
2% 0% 1%
88%
7%
0% 5%
86%
5% 0%
9%
92%
1% 0% 7%
0%
20%
40%
60%
80%
100%
No arrears 1-30 dpd 31-90 dpd Over 90 dpd
Corporate
SMEs
33%
12% 4%
51% 46%
13%
7%
34%
58%
10% 9%
23%
65%
13% 9% 13%
68%
18%
5% 9%
66%
20%
11% 3%
69%
20%
7% 4%
0%
20%
40%
60%
80%
100%
No arrears 1-30 dpd 31-90 dpd Over 90 dpd
Retail
12%
87%
9%
58%
19%
55%
9% 8%
28%
56%
13% 6%
25%
66%
14%
4%
16%
57%
22%
10% 11%
65%
19%
10% 6%
68%
19%
8% 5%
71%
19%
8% 2%
0%
20%
40%
60%
80%
100%
No arrears 1-30 dpd 31-90 dpd Over 90 dpd.
63%
13%
Quarterly average
Performance of restructured loans (post-31 December 2013, by quarter) as at 31 December 2015 1
• An analysis performed as at 31 December 2015 indicates that on average 73% of the loans restructured post 31 December
2013 (restructurings performed in 4Q2015 were excluded) for Cyprus operations, have no arrears; The average percentage
of restructured loans with arrears more than 90 days stands at 12%
• Corporate restructured loans exhibit the best performance with an average percentage of restructured
loans with no arrears of 87%
Asset quality
(1) The performance of loans restructured during 4Q2015 is not presented in this graph as it is too early to assess it.
41
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
90+ DPD ratios by business line
Gross loans by business line (€ bn) 3
2%
24
%
16
%
31
%
69
%
81
% 10
0%
29
%
27
%
16
%
31
%
68
%
81
% 10
0%
27
%
26
%
15
%
30
%
70
%
80
% 10
0%
22
%
22
%
14
%
25
%
71
%
79
% 10
0%
21
%
20
%
13
%
23
%
63
%
74
% 1
00
%
Corporate SMEs Housing Consumer Credit RRD-Mid andLarge Corporates
RRD-SMEs RRD-Recoveries
31.12.14 31.03.15 30.06.15 30.09.15 31.12.15
4,3
4
2,3
0
3,8
5
1,7
5
5,3
3
1,4
0
4,7
8
4,5
3
2,2
0
3,8
5
1,8
3
5,3
7
1,3
9
4,9
1
4,5
9
2,1
4
3,8
0
1,8
0
5,2
0
1,3
8
5,0
2
4,3
8
1,8
3
3,7
5
1,4
8
4,8
7
1,4
1
5,1
3
4,2
9
1,7
8 3,6
8
1,4
3
4,7
3
1,3
8
5,3
1
Corporate SMEs Housing Consumer Credit RRD-Mid andLarge Corporates
RRD-SMEs RRD - Recoveries
31.12.14 31.03.15 30.06.15 30.09.15 31.12.15
% of total
(1) As part of the restructuring of the Group, management is currently monitoring the loan portfolio of the Group using new business line definitions. An important component of the Group’s new operational structure is the establishment of the RRD for the purposes of centralising and streamlining the management of its delinquent loans.
19% 8% 16% 7% 21% 23% 6%
Analysis of Loans and 90+ DPD ratios by Business Line1
42
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
90+ DPD ratios by economic activity
50
%
54
%
59
%
79
%
48
%
38
%
54
% 67
%
48
%
54
%
62
% 7
7%
48
%
38
%
55
% 67
%
48
%
54
%
57
%
80
%
48
%
38
%
57
%
64
%
49
%
54
%
59
%
79
%
48
%
36
%
62
%
57
%
48
%
54
%
46
%
76
%
47
%
36
%
57
%
56
%
31.12.14 31.03.15 30.06.15 30.09.15 31.12.15
2,4
7
0,8
9
1,5
0 3,9
6
3,1
2
7,8
5
1,8
6
2,1
2
2,4
8
0,9
1
1,5
7 4,0
4
3,1
7
7,9
2
1,8
9
2,0
9
2,5
0
0,9
2
1,6
4 4,1
9
3,2
0
7,8
6
2,0
7
1,5
5
2,3
8
0,8
5
1,6
2 4,1
4
3,3
8
7,4
1
1,8
4
1,2
4
2,3
6
0,8
3
1,5
7 4,0
7
3,4
2
7,3
3
1,7
9
1,2
1
31.12.14 31.03.15 30.06.15 30.09.15 31.12.15
Trade Manufacturing Hotels & Restaurants
Construction Real estate Private Individuals
Professional & other services
Other sectors
Gross loans by economic activity (€ bn)
Trade Manufacturing Hotels & Restaurants
Construction Real estate Private Individuals
Professional & other services
Other sectors
15% 10% 32% 8% 5% % of
total 18% 7% 4%
Analysis of Loans and 90+ DPD ratios by Economic Activity
43
49
133
156
255
192
0
127
127
127
0
153
204
191
191
191
203
224
230
234
234
234
0
97
114
Disclaimer
This presentation has been prepared for information and background purposes only. It is confidential and neither it nor any part of it may be
reproduced (electronically or otherwise) or redistributed, passed on, or the contents otherwise divulged, directly or indirectly, to any other person
(excluding the recipient's professional advisers) or published in whole or in part for any purpose without the prior written consent of the Bank of
Cyprus Public Company Ltd (the "Bank"). This presentation does not purport to be all-inclusive or to contain all of the information that a person
considering the purchase of any securities of the Bank may require to make a full analysis of the matters referred to herein. Certain statements,
beliefs and opinions in this presentation are forward-looking. Such statements can be generally identified by the use of terms such as “believes”,
“expects”, “may”, “will”, “should”, “would”, “could”, “plans”, “anticipates” and comparable terms and the negatives of such terms. By their nature,
forward-looking statements involve risks and uncertainties and assumptions about the Group that could cause actual results and developments to
differ materially from those expressed in or implied by such forward-looking statements. These risks, uncertainties and assumptions could adversely
affect the outcome and financial effects of the plans and events described herein. We have based these forward-looking statements on our current
expectations and projections about future events. Any statements regarding past trends or activities should not be taken as a representation that
such trends or activities will continue in the future. Readers are cautioned not to place undue reliance on forward-looking statements, which are
based on facts known to and/ or assumptions made by the Group only as of the date of this presentation. The Bank's ability to achieve its projected
results depends on many factors which are outside management's control. Actual results may differ materially from those contained or implied in the
forward-looking statements. We assume no obligation to update such forward-looking statements or to update the reasons that actual results could
differ materially from those anticipated in such forward-looking statements. This presentation does not constitute an offer to sell, or a solicitation of
an offer to buy, any security in the United States, or any other jurisdiction. The delivery of this presentation shall under no circumstances imply that
there has been no change in the affairs of the Group or that the information set forth herein is complete or correct as of any date. This presentation
shall not be used in connection with any investment decision regarding any of our securities, which should only be made based on expressly
authorised materials from us identified as such, nor in connection with any decision whether or how to vote on any matter submitted to our
stockholders. The securities issued by the Bank have not been, and will not be, registered under the US Securities Act of 1933 (“the Securities
Act”), or under the applicable securities laws of any other jurisdiction.
44