Bank of Cyprus Group Group Financial Results For the year ended 31 - PowerPoint PPT Presentation

Bank of Cyprus Group Group Financial Results For the year ended 31 December 2019

Group Financial Results for the year ended 31 December 2019 Group Financial Results for the year ended 31 December 2019 DISCLAIMER This presentation has not been audited by the Group’s external auditors. Important Notice Regarding Additional Information Contained in the Investor Presentation The Group statutory financial statements for the year ended 31 December 2019, upon which the The presentation for the Group Financial Results for the year ended 31 December 2019 (the “Presentation”), available on https://www.bankofcyprus.com/en-GB/investor-relations-new/reports- auditors have given an unqualified report, can be found on the website (https://www.bankofcyprus.com/en-GB/investor-relations-new/reports-presentations/financial- presentations/financial-results/, includes additional financial information not presented within the Group Financial Results Press Release (the “Press Release”), primarily relating to (i) NPE results/) analysis (movements by segments and customer type), (ii) rescheduled loans analysis, (iii) details This financial information is presented in Euro (€) and all amounts are rounded as indicated. A of historic restructuring activity including REMU activity, (iv) analysis of new lending, (v) Income comma is used to separate thousands and a dot is used to separate decimals. statement by business line, (vi) NIM and interest income analysis and (vii) Loan portfolio analysis in accordance with the three-stages model for impairment of IFRS 9. Except in relation to any non- IFRS measure, the financial information contained in the Investor Presentation has been prepared in accordance with the Group’s significant accounting policies as described in the Group’s Annual Financial Report 2019. The Investor Presentation should be read in conjunction with the information contained in the Press Release and neither the financial information in the Press Release nor in the Investor Presentation constitutes statutory financial statements prepared in accordance with International Financial Reporting Standards. 2

Group Financial Results for the year ended 31 December 2019 Group Financial Results for the year ended 31 December 2019 Supporting the Cypriot economy during the COVID-19 crisis • Safeguard health of staff and customers, while ensuring operational resilience of the Bank Key priorities • Support customers affected by COVID-19 and wider Cypriot economy • Provision of liquidity to affected businesses & households, to alleviate short term cash flow burden • Considerable experience in managing challenging circumstances Robust Pandemic Plan in • Activation of Pandemic Plan to ensure operational resilience and no disruption of day-to-day activities place • Operational resilience strengthened by digital initiative, providing alternative solutions for carrying out daily banking transactions online • Total Capital ratio of 18.0% 1 and CET1 ratio of 14.8% 1 Good Capital Position • CET1 capital buffer of c.380 bps • Surplus liquidity of €3.2 bn Significant Surplus Liquidity • Deposits at €16.7 bn; Loan to deposit ratio at 64% (1) Allowing for IFRS 9 transitional arrangements 3

Group Financial Results for the year ended 31 December 2019 Group Financial Results for the year ended 31 December 2019 Government’s fast reaction contained the spread of COVID -19 in Cyprus Total sample testing per 100,000 population per country 1 Cumulative cases per 100,000 population 2 per country 500 500 455 455 Fast escalation of measures in Cyprus Fast escalation of measures in Cyprus Luxemburg 603 6,070 All schools closed All schools closed 1 1 Cyprus 66 3,426 400 400 Travel ban & country lockdown Travel ban & country lockdown 2 2 217 Portugal 2,922 3 Stricter lockdown measures 314 314 300 300 Italy 314 2,614 217 217 207 207 Germany 181 2,499 200 200 181 181 Ireland 362 2,299 100 100 Spain 455 1,990 66 66 22 22 692 France 180 1 1 2 2 3 3 10 10 20 20 30 30 40 40 50 50 60 60 70 70 80 80 90 90 Greece 22 552 Days since first case Confirmed cases Tests Cyprus Cyprus UK UK Portugal Portugal Italy Italy Greece Greece Spain Spain Germany Germany • Swift government reaction following the outbreak of COVID-19 in Cyprus in mid-March 2020 for the containment of the pandemic spread • COVID-19 sample testing per 100,000 population amongst the highest within EU • Confirmed cases per 100,000 population amongst the lowest within EU • Daily reported incidents stabilised and remain consistently low • The Government is working on the gradual relaxation of measures, currently expected to be phased out from early May (1) According to the information provided by University of Cyprus as at 24 April 2020 - https://covid19.ucy.ac.cy (2) Based on information up to 24 April 2020 provided by https://www.ecdc.europa.eu/en/publications-data/download-todays-data-geographic-distribution-covid-19-cases-worldwide 4

Group Financial Results for the year ended 31 December 2019 Group Financial Results for the year ended 31 December 2019 Protection of staff and customers’ health is the key priority, while ensuring operational resilience of the Bank Measures to Safeguard Health & Safety Ensuring Operational Resilience • Establishment of a committee to monitor COVID-19 measures, • Activation of the Pandemic Plan to ensure operational trace incidents and to provide regular updates to staff resilience and no disruption of the day-to-day activities • Implementation of Health & Safety measures in line with the • Splitting the operations of critical units to separate locations guidelines and recommendations issued by Ministry of Health and provision of remote access availability • Special purpose leave for employees that belong to vulnerable • Branch network operates on a rotational basis, as a groups precautionary measure • Enhanced intensive clean-ups , a precautionary disinfection • 44% of staff (excluding branches) work remotely procedure is in place throughout the Bank • Digital service channels provide alternative solutions for • Shipment of masks and gloves and sanitisers to branches carrying out daily banking transactions online • Participation in government’s COVID -19 testing schemes • 70% of customers are currently digitally engaged 1 (1) This is the ratio of digitally engaged individual customers to the total number of individual customers as per the engagement scorecard. Digital channels include mobile, browser and ATMs. It also captures access to a card as well as online card purchases 5

Group Financial Results for the year ended 31 December 2019 Significant Regulatory measures to mitigate COVID-19 impact ECB/CBC EBA and ESMA • IFRS 9 • Increased capital and liquidity flexibility • COVID-19 moratorium not an automatic trigger for • Flexibility to temporarily “dip into” certain capital buffers increased credit risk (P2G & CCB) and minimum liquidity requirements (LCR) • Minimise cliff effect of transfers between stages • Bringing forward ability to use lower quality own funds • Govt guarantees may mitigate ECL impact on P&L; no to meet Pillar 2 Requirements (P2R) impact from guarantees on assessment of increased credit risk • Delay of phasing-in of 1 Jan 2021 O-SII buffer (0.5% • ECB to provide central macroeconomic scenarios to for the Bank) by 12 months guide provisioning policies • Launch of a new Pandemic Emergency Purchase • Forbearance Programme (PEPP) for an amount of € 750 bn • General COVID-19 moratorium does not trigger • Exercise temporary flexibility regarding the “Unlikely automatic reclassification due to forbearance • Prudential Definition of Default to Pay” • Moratorium extends “ 90 days past due” deadline via • Exercise full flexibility when discussing with banks modified payment schedule the implementation of their NPE reduction strategies • Renegotiated loans (where NPV remains constant) not • Avoid procyclicality in models to determine expected considered distressed restructuring loan credit losses. Central macroeconomic scenarios will • EU wide stress test postponed to 2021 to allow banks be provided to support IFRS 9 application. Banks should to prioritise operational continuity give a greater weight to long term stable outlook evidenced by past experience 6