Bank of Cyprus Group Preliminary Group 1 Financial Results for the year ended 31 December 2016 1 March 2017 The Preliminary Group Financial Results have not been audited by the Group‟s external auditors (1) The Preliminary Group Financial Results referred to in this Presentation relate to the Bank of Cyprus Public Company Limited, the “Bank”, and together with its subsidiaries, the “Group”, which was listed on the Cyprus Stock Exchange (CSE) and the Athens Exchange as at 31 December 2016. On 18 January 2017, Bank of Cyprus Holdings Public Limited Company (BOC Holdings) became the new parent company of the Bank. On 19 January 2017 BOC Holdings was admitted to listing and trading on the London Stock Exchange and the CSE.
FY2016 Financial Results - Highlights • Listing on LSE Key Milestones • Trading of shares on the LSE and the CSE commenced on 19 January 2016 Achieved in • ELA fully repaid • Another significant milestone in journey back to strength January 2017 • Successful issuance of € 250 mn Tier 2 Notes • 90+ DPD 1 down by € 459 mn or 5% qoq; down by € 3,0 bn or 27% in FY2016 Seven consecutive • NPEs down by € 867 mn or 7% qoq; down by € 2,9 bn or 21% in FY2016 quarters of NPL improvement • Loan restructurings of € 6,2 bn 2 in FY2016 • Deposits up by € 867 mn or 6% qoq; up by € 2,3 bn or 16% in FY2016 Normalising liability stack • Ratio of Loans to Deposits (L/D) improved to 95% • Total Capital ratio c.16% (pro forma 3 ) Maintaining Strong • CET1 ratio at 14,7%; 70 basis points added during FY2016; Capital Position • RWA intensity at 85%; Conservative leverage ratio 4 of 13,2% • Modest profitability of € 64 mn for FY2016; € 2 mn for 4Q2016 Operating • Strong pre provision operating profitability of € 148 mn for 4Q2016 and € 566 mn for FY2016 profitability directed to de-risk • Sustained NIM at 3,47% balance sheet • Healthy C/I ratio of 41% for FY2016 Leading market • Loan market share 5 at 39,4%; Deposit market share 5 at 31,1%; Economy growing for a second consecutive Position year at 2,8% yoy (compared to 1,7% in 2015) in a Recovering • New lending of c. € 1,5 bn, in 2016 Economy (1) Problem loans (90+ DPD) are loans in arrears for more than 90 days (90+ DPD) and are defined as loans past-due for more than 90 days and those that are impaired (impaired loans are those which are not considered fully collectable and for which a provision for impairment has been recognised on an individual basis or for which incurred losses exist at their initial recognition or customers in Debt Recovery). (2) Including Debt for asset swaps, write offs & non contractual write offs 2 Adjusted for the issuance of € 250 mn Tier 2 Notes in January 2017 based on the preliminary Group financial results as at and for the year ended 31 December 2016. (3) (4) Leverage ratio = Tangible Total Equity over Total Assets (5) As at 31 December 2016
At a glance- Significant Improvement in all Financial Indicators € 3,0 bn reduction in 90+DPD in FY2016; € 2,9 bn reduction in NPEs in FY2016; Rising coverage ratios Down by 36% since peak Down by 27% since peak Change in 90+ DPD 1 ( € bn) Change in NPEs ( € bn) 90+DPD ratio NPE ratio 90+DPD provision coverage 2016: NPEs provision coverage 2014: 2015: 2016: 2015: ( € 2,9bn) ( € 0,4 bn) ( € 1,3 bn) ( € 3,0 bn) ( € 1,0 bn) 5,3 62,9% 61,9% 61,8% 59,3% 54,8% 2,7 54% 53% 0,2 0,9 1,3 1,4 48% 43% 0,0 41% 38% 39% (0,0) 41% (0,4) 36% 39% 39% (1,0) (1,3) (2,0) 34% (0,2) 35% 33% (0,4) 2009 2010 2011 2012 2013 1H2014 2H2014 1H2015 2H2015 1H2016 2H2016 (0,6) (0,6) (0,6) 49% 50% 53% 53% 50% 44% 41% (0,9) (0,8) Dec Jun Dec Jun Dec Jun Dec Mar 15 Jun 15 Sept 15 Dec 15 Mar 16 Jun 16 Sept 16 Dec 16 2013 2014 2014 2015 2015 2016 2016 Full repayment of ELA Loan to Deposit Ratio at 95% Strong Capital Position ELA ( € bn) ELA as % of total assets CET 1 transitional Total Capital Ratio Loan to deposit ratio (L/D) Leverage ratio 3 EBA average 34% L/D 2 : 120% 9,4% 12,5% 12,5% 12,6% 13,0% 13,2% 31% 31% 145% 148% 141% 136% 28% c. 16% 121% 15,6% 23% 15,0% 14,9% 14,8% 110% 14,7% 14,7% 14,4% 14,5% 14,2% 14,0% 14,0% 14,1% 11,4 11,1 95% 16% 9,6 8,8 11% 11,3% 7,4 6% 5,9 1% 0% 3,8 2,4 1,3 0,2 0,0 Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Dec Apr Jun Dec Jun Dec Jun Dec Jun Sep Dec Jan 2014 2014 2015 2015 2016 2016 2016 2013 2014 2014 2015 2015 2016 2016 2013 2013 2013 2014 2014 2015 2015 2016 2016 2016 2017 4 pro forma (1) Mainly attributable to loan restructuring activity and slower formation of new problem loans (2) Based on EBA Risk Dashboard Report, data as at 30 September 2016 (3) Leverage ratio defined as tangible equity over total assets 3 Adjusted for the issuance of € 250 mn Tier 2 Notes in January 2017 based on the preliminary Group financial results as at and for the year ended 31 December 2016 (4)
̶ ̶ ̶ ̶ Seven consecutive quarters of material improvement in 90+DPD High correlation between formation of problem loans & economic cycle Quarterly change of 90+ DPD ( € mn) 90+ DPD ( € bn) Recovery Economic crisis Stabilisation Slow deterioration 13,0 13,0 13,0 12,8 12,7 12,8 12,6 12,6 12,0 11,3 11,0 10,3 9,3 8,8 8,3 7,7 6,5 5,1 5,1 5,0 90+ DPD Reduction 4,4 4,0 3,8 1.240 3.319 1.972 386 3,6 321 380 329 3,5 2,5 2,9 136 2,2 20 FY2016: 17% of 1.319 64 2,0 Cyprus GDP 2,3 265 100 (85) 410 (247) (164) (325) (143) 96 1,6 558 232 156 402 609 (501) (649) (1.041) (668) (1.020) (459) 1 03-2009 06-2009 09-2009 12-2009 03-2010 06-2010 09-2010 12-2010 03-2011 06-2011 09-2011 12-2011 03-2012 06-2012 09-2012 12-2012 06-2013 09-2013 12-2013 03-2014 06-2014 09-2014 12-2014 03-2015 06-2015 09-2015 12-2015 03-2016 06-2016 09-2016 12-2016 € 3,0 bn or 27% drop in 90+DPDs in FY2016 90+DPD ( € bn) 90+DPD ratio 90+DPD % of Progress on asset quality 52,5% 53,2% 53,1% 52,9% 52,5% 48,7% 37,5% total assets underpinned by: 50,1% 49,8% 90+DPD ( € bn) 48,6% 48,6% Robust strategy 11,3 47,4% 47,1% 8,3 Relentless execution 44,0% 42,6% Economic FY2015 FY2016 41,3% improvement 90+DPD ratio 50,1% 41,3% 36% drop since peak Legal improvements € 3bn/ (27%) drop Provision coverage 48,1% 54,4% ratio 13,0 13,0 12,8 12,6 13,0 12,7 12,8 12,7 12,0 11,3 10,3 9,3 8,8 8,3 Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec 2013 2013 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 4 (1) Information for 1Q2013 and 2Q2013 is not available as it was not possible to publish the financial results for the three months ended 31 March 2013 (2) Percentage points
Seven consecutive quarters of material improvement in NPEs € 4,0 bn drop since Dec-2014; € 867 mn drop in 4Q2016 NPEs with forbearance measures no NPEs ( € bn) NPE ratio impairments, no arrears Forborne NPEs with no impairments or 62,9% 63,0% arrears 1 ( € bn) – in pipeline to exit NPEs 62,2% 61,9% 61,8% 61,0% subject to meeting all exit criteria 2 59,3% 57,8% 1,9 2,2 1,5 54,8% 2,4 2,3 2,0 0,5 € 4,0 bn or ( 26%) drop since Dec 14 0,3 € 867 mn or (7%) drop qoq 0,3 0,2 0,7 0,1 0,0 15,0 15,2 14,8 14,2 14,0 13,3 12,5 11,9 11,0 0,1 0,2 0,1 2017 2018 2019+ Dec 2014 Mar 2015 Jun 2015 Sep 2015 Dec 2015 Mar 2016 Jun 2016 Sep 2016 Dec 2016 Corporate SME Retail NPEs reduced by € 2,9 bn or 21% in FY2016 NPEs % of 60,0% 49,8% total assets 13,97 11,03 • NPEs reduction FY2016: 17% of Cyprus GDP NPEs ( € bn) • NPEs reduced for 7 consecutive quarters FY2015 FY2016 • For a second consecutive quarter reduction of NPEs exceeds NPE ratio 54,8% 61,8% reduction of 90+ DPD Provision coverage 39,0% 41,0% ratio (1) Analysis provided on account basis. Accounts will not exit NPE status if not all exit criteria are met 5 (2) Curing period of the NPEs with forbearance measures, but no impairments and no arrears, assuming no re-default (3) Percentage points
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