Bank Of Cyprus Holdings Plc · CSECY:BOCH
Bank Of Cyprus — H1 2024 Earnings Presentation
83 slides from Bank Of Cyprus's earnings presentation, Aug 8, 2024
Slide 1: Group Financial Results for the six months ended 30 June 2024
Bank of Cyprus Group Group Financial Results For the six months ended 30 June 2024
Slide 2: Disclaimer
DISCLAIMER This announcement contains inside information for the purposes of Article 7 of EU Regulation Forward Looking Statements 596/2014 (including, as it forms part of domestic UK law pursuant to the European Union (Withdrawal) Act 2018 of the United Kingdom). This document contains certain forw
Slide 3: Table of Contents
Table of Contents Executive Summary – Updated Financial Targets 1. Executive Summary and Updated Financial Targets 2. Proposal to enhance the Group’s market visibility and improve liquidity via ATHEX listing 3. 1H2024 Financial Performance 4. Capital, Liquidity & Asset Quality 5. ESG update 6. Appen
Slide 4: Executive Summary and Updated Financial Targets
Executive Summary and Updated Financial Targets 4
Slide 5: Why Bank of Cyprus
Why Bank of Cyprus Strong, Supportive Macro Market Leader • Open economy growing faster than the Eurozone average • Market leader in a consolidated market • Fiscal discipline • 43.2%1 loan market share; 37.5%1 deposit market share • Sovereign rated investment grade • #1 Life and #2 Non-Life Insuranc
Slide 6: Strong, Diversified Service-Based Economy; Growth Outpacing Eurozone Average
Strong, Diversified Service-Based Economy; Growth Outpacing Eurozone Average A diversified, service-based economy GDP growth of 3.4% for 1Q2024 Structure of Economy in 2023 (% of GVA) Real GDP (yoy % change) 2022: 5.1% 2023: 2.5% 10.00% 9% 8% Wholesale & Retail trade Real Estate 6% 8.00% 10% Health
Slide 7: Key Market Enablers Continue to Improve While Inflation is on a Downward Trend
Key Market Enablers Continue to Improve While Inflation is on a Downward Trend Unemployment rate decreased to 5.7% in 1Q2024 Cyprus inflation at 3.0%, impacted by elevated energy prices Quarterly (%) (seasonally adjusted) Cyprus HICP 2 ECB Depo rate 13.0% 2022: 6.8% 2023: 6.1% 2023 HICP: 3.9% 1H2024
Slide 8: Maintained Strong Performance Across Key Metrics
Maintained Strong Performance Across Key Metrics Net Interest income remains strong Cost income ratio1 remains low, on strong income 5.0% 4.0% 4.0% 4.0% 3.7% 4.0% 4.0% 3.1% 4.0% 3.9% 3.8% 3.0% 3.7% 3.2% 34% 214 220 213 32% 32% 2.0% 196 207 30% 2.3% 29% 29% (€ mn) 162 1.0% 0.0% 1Q2023 2Q2023 3Q2023 4
Slide 9: Delivering Shareholder Value: Earnings, Book Value and Distributions
Delivering Shareholder Value: Earnings, Book Value and Distributions Basic earnings per share remain strong at €0.31 ROTE of >20% for 6 consecutive quarters (€) 28.5% 30.1% 29.1% 29.9% 28.3% 26.6% 25.6% 25.6% 0.31 0.31 23.6% 23.7% 0.28 0.29 0.30 21.3% 22.0% 0.21 1Q2023 2Q2023 3Q2023 4Q2023 1Q2024 2Q
Slide 10: Shareholder Value Accelerated since Investor Update Event on Strong Performance
Shareholder Value Accelerated since Investor Update Event on Strong Performance Investor Update event June 20231 June 20242 Yoy Share price (€) 2.643 4.174 +58% Market Cap (€ mn) 1,177 1,854 +58% ROTE 21.3% 23.7% +2.4 p.p. ROTE on 15% CET1 ratio5 22.0% 29.9% 137 Distribution (€ mn) - (vs 22 in June
Slide 11: 1H2024 Performance Well Ahead of 2024 Targets
1H2024 Performance Well Ahead of 2024 Targets 2024 targets 1H2024 (February 2024) >€670 mn €420 mn Net interest income average ECB Depo rate: 3.4% average ECB depo rate: 4.0% Cost to income ratio1 c.40% 30% 29.6% on 15% CET1 ratio >17% ROTE on 15% CET1 ratio 23.7% (reported) NPE ratio c.3% 2.8% Tren
Slide 12: 2024 and 2025 Key Financial Metrics Upgraded
2024 and 2025 Key Financial Metrics Upgraded… FY2024 FY2025 FY2024 FY2025 (February 2024) (February 2024) updated targets updated targets Net Interest Income (€) c.800 mn >700 mn >670 mn Average ECB Depo rate - assumptions (3.4%) (3.8%) (3.0%) Cost to Income Ratio1 c.40% - <35% <40% NPE Ratio c.3% <
Slide 13: Supporting Stronger ROTE and Distributions
…Supporting Stronger ROTE and Distributions FY2024 FY2024 targets FY2025 targets (February 2024) ROTE Mid-teens reported >19% ROTE >17% >24% High-teens on 15% CET1 ratio Focus on shareholder remuneration 30%-50% payout Targeting higher end 30%-50% payout ratio1 Given strong capital generation, Distr
Slide 14: Net Interest Income to Remain Strong in 2024 at c.€800 mn
Net Interest Income to Remain Strong in 2024 at c.€800 mn 6m Euribor 3.7% 3.6% 3.0% rate (avg) Outlook ECB depo 3.3% 3.8% 3.0% rate (avg) • 2024 interest rate outlook more favorable than initially expected, 792 c.800 upgrading NII to c.€800 mn (vs >€670 mn previously guided) >700 (€ mn) 380 • 2025 N
Slide 15: Proposal to enhance the Group's market visibility and improve liquidity via ATHEX listing
Proposal to enhance the Group’s market visibility and improve liquidity via ATHEX listing 15
Slide 16: Proposal to Enhance the Group's Market Visibility and Improve Liquidity via ATHEX Listing
Proposal to Enhance the Group’s Market Visibility and Improve Liquidity via ATHEX Listing • The Board regularly evaluates how best to position the Group to achieve its long-term strategic targets and deliver sustainable value to shareholders • One of the matters the Board has been assessing for some
Slide 17: 1H2024 Financial Performance
Executive Summary – Updated Financial Targets 1H2024 Financial Performance Appendix 17
Slide 18: 1H2024 Highlights
1H2024– Highlights • GDP projected to grow by c.2.9%1 in 2024 outpacing Euro area average Strong economic growth • Strong new lending of €1.2 bn, up 10% yoy continues • Gross performing loan book at €10.1 bn up 3% since December 2023 • NII at €420 mn in 1H2024 up 17% yoy; 2Q2024 NII at €207 mn, down
Slide 19: Income Statement
Income Statement € mn 1H2024 1H2023 yoy% 2Q2024 1Q2024 qoq% Net Interest Income 420 358 17% 207 213 -3% Non-interest income 129 153 -16% 66 63 5% Total income 549 511 7% 273 276 -1% Total operating expenses1 (167) (162) 4% (86) (81) 7% Operating profit 363 331 9% 179 184 -2% Provisions and impairmen
Slide 20: Highly Liquid Balance Sheet Being Positioned for Lower Rates
Highly Liquid Balance Sheet Being Positioned for Lower Rates (€ bn) 25.47 25.47 Other assets 1.94 Other 1.43 REMU repossessed 0.79 Issuance of €300 mn MREL- Eligible Green properties Equity (incl AT1) 2.63 • 25%1 linked with Bank’s base rate (‘natural Senior Preferred Notes in April 2024; coupon hed
Slide 21: Continued Strong NII in 2Q2024 Supported by Rates and High Liquidity
Continued Strong NII in 2Q2024 Supported by Rates and High Liquidity NII remained strong at €207 mn; NIM at 370 bps Effective yield on assets & cost of funding 397 400 390 Performing loans Cost of deposits 376 370 1 1 NIM excluding400 Liquid assets Cost of wholesale funding TLTRO (bps) +17% yoy 200
Slide 22: Reducing NII Sensitivity via Hedging
Reducing NII Sensitivity via Hedging NII sensitivity to parallel shift in interest rates (annualised)1 Outlook EUR +100bps -100bps • Target of €4-5 bn hedging in FY2024 with average duration c.3-4 years, subject to market conditions; Dec 2023 €102 mn -€110 mn Sensitivity/Total NII 14% • c.2/3 (€3.4
Slide 23: Deposits up 3% yoy; Stable Deposit Mix and Resiliently Low Cost of Deposits
Deposits up 3% yoy; Stable Deposit Mix and Resiliently Low Cost of Deposits Deposits at €19.7 bn1 up 3% yoy; mix at 33% flat qoq Gradual increase in cost of deposits at 0.34% in 2Q2024 € bn Cost of deposits +3% 10 14 19 24 29 34 (bps) 19.2 19.3 19.3 19.7 101 5.9 31% 6.2 32% 6.4 33% 110.0 87 6.3 33%
Slide 24: Strong New Lending at €1.2 bn, up 10% yoy
Strong New Lending at €1.2 bn, up 10% yoy New lending at €551 mn in 2Q2024 Gross performing book1 up 3% since Dec 2023 +10% € mn € bn 1.227 1.118 +3% 137 676 114 624 9.91 9.78 10.00 10.06 64 0.69 0.77 0.82 64 551 568 0.76 494 462 73 509 50 445 43 66 358 3.89 3.69 3.81 3.76 297 212 210 190 166 125 12
Slide 25: Fixed Income Portfolio up 20% yoy, Representing 15% of Total Assets
Fixed Income Portfolio up 20% yoy, Representing 15% of Total Assets Fixed income securities per category - NBV Fixed income securities per issuer type - NBV to increase to % assets1 13% 14% 15% 15% c.17% by Dec 20242 3,743 3,828 (€ mn) 3,743 3,828 (€ mn) 3,548 3,548 184 202 Other financial 426 399 1
Slide 26: Non-NII at €66 mn in 2Q2024, up 5% qoq
Non-NII at €66 mn in 2Q2024, up 5% qoq (€ mn) 79 81 3 76 2 72 71 3 QoQ Performance (2Q2024 vs 1Q2024) 2 12 2 63 66 17 11 1 16 5 11 1 8 • Net fee and commission income up 5% qoq driven by higher non- 5 10 15 13 16 transactional and transactional fees 10 10 13 10 61 58 62 • Net insurance result up 30%
Slide 27: Profitable Life Insurance Business
Profitable Life Insurance Business - Valuable and Sustainable Contribution to the Group € mn 1H2024 1H2023 yoy% 11% 5% 27% Net Insurance result Contribution Market 14.1 13.6 4% Contribution to Group share2 to non-NII PAT Net other operating costs (non-attributable) (0.6) (0.6) 1% Net revaluations pr
Slide 28: Profitable Non-Life Insurance Business
Profitable Non–Life Insurance Business – Valuable and Sustainable Contribution to the Group € mn 1H2024 1H2023 yoy% 7% 2% 14% Net Insurance result 8.4 11.0 -23% Contribution Market Contribution to Group share2 Other operating costs (non- to non-NII PAT (1.5) (1.3) 15% attributable) Revaluation/dispo
Slide 29: Leading Card Processing and Payment Solutions Business in Cyprus
Leading Card Processing and Payment Solutions Business in Cyprus € mn 1H2024 1H2023 yoy% 12% 2% 83% Net fee and commission income 14.0 13.5 3% Contribution Market Contribution to the share1 Net other income 1.8 1.8 6% to non-NII Group’s PAT FX and net gains on revaluation 0.0 0.7 - of investment Tot
Slide 30: Digital Offerings via Digital Channels Enhance Group's Sales
Digital Offerings via Digital Channels Enhance Group’s Sales New digital loans & Quickloans1 Digital account openings2 New debit cards up 97% yoy of €52 mn in 1H2024 up 53% yoy € mn Accounts (#) Debit Cards (#) +97% +53% +12% 8,865 8,291 52 46 5,423 4,492 2,776 1,899 7 1H2022 1H2023 1H2024 1H2022 1H
Slide 31: JINIUS; Leader in Shaping the Digital Local Economy
JINIUS; Leader in Shaping the Digital Local Economy • Establishment of Jinius Ltd subsidiary in April 2023 • Business-to-Business services and enhanced • Launched new Business-to-Consumer service current ones in 2024: in February 2024: • Tenders management • Product Marketplace • Ecosystem managemen
Slide 32: Cost to Income Ratio Remains Low at 30%, on Strong Income
Cost to Income Ratio1 Remains Low at 30%, on Strong Income Total operating expenses1 up 7% qoq and 4% yoy QoQ Performance (2Q2024 vs 1Q2024) (€ mn) • Staff costs broadly flat qoq 4% • Other operating expenses up 15% on prior quarter, due to higher 34% 180 1.0 marketing and professional fees 29% 30%
Slide 33: Cost of Risk at 31 bps in 1H2024
Cost of Risk at 31 bps in 1H2024 Cost of risk Bank’s IFRS 9 macroeconomic assumptions 0.62% Base line GDP rate Unemployment rate 0.44% 0.48% 0.31% 2024 2.9% 5.7% 2025 2.6% 5.6% FY2022 FY2023 1H2023 1H2024 • Cost of Risk of 31 bps (€16 mn) in 1H2024 down 17 bps yoy reflecting the continued robust per
Slide 34: Capital, Liquidity & Asset Quality
Executive Summary – Updated Financial Targets Capital, Liquidity & Asset Quality Appendix 34
Slide 35: Robust Capital Position
Robust Capital Position • Regulatory CET1 ratio at 18.3%1 and includes distribution accrual at the top end of distribution policy (i.e. 50% payout) Regulatory capital ratios 23.3% • Gross of dividend accrual, CET1 ratio at 19.5% 22.4% 22.0% 19.4% 19.0% 19.1% 20.4% 19.3% 20.7% 20.4% • CET1 generation
Slide 36: Asset Quality: NPE Ratio <3%, 2024 Target Already Achieved
Asset Quality: NPE Ratio <3%, 2024 Target Already Achieved NPEs down 15% qoq to <€300 mn; residual NPEs mainly Retail NPE ratio reduced to 2.8% (0.4% on a net basis) 90% 85% NPE 78% 77% 80% 73% coverage 70% 5% (€ mn) 371 365 3.6% 3.5% 3.6% 60% 347 294 4% 3.4% 294 2.8% 50% 75 3% 26 40% 51 2% 0.8% 0.8
Slide 37: REMU Stock <€800 mn; on Track to Achieve 2025 Target
REMU Stock <€800 mn; on Track to Achieve 2025 Target REMU repossessed stock at €790 mn at June 2024 Organic sales1 consistently close to Open Market Value; comfortably 2.0 above Book Value Group BV (€ bn) 117% 116% 1.48 1.44 110% 1.5 109% 109% 107% 75% of Open 95% 1.16 91% 89% 89% 1.08 -€72 mn Marke
Slide 38: Steadily Improving Credit Ratings for BOC: Upgrade by Moody's to Baa1
Steadily Improving Credit Ratings for BOC: 2 Notches Upgrade by Moody’s to Baa1 Moody’s upgraded rating to Baa1 in July 2024; outlook stable S&P upgraded rating to BB+ in June 2024; outlook positive A3 8 A- 8 Baa1 Baa1 BBB+ BBB+ Baa2 7 Baa2 BBB 7 Baa3 Investment grade BBB- Investment grade Ba16 BB+
Slide 39: Concluding Remarks
Concluding Remarks ✓ 1H2024 ROTE at 23.7% ✓ Upgrading ROTE targets to >19% in 2024 and mid-teens in 2025 ✓ Targeting 2024 distribution payout ratio at the higher end of range (i.e 50%1) Intention to list on ATHEX and delist from LSE2 to improve liquidity in the ✓ Group’s ordinary shares and enhance
Slide 40: Key Information and Contact Details
Key Information and Contact Details Contacts Investor Relations & ESG Executive Director Finance Tel: +357 22 122239, Email: investors@bankofcyprus.com Eliza Livadiotou, Tel: +35722 122128, Email: eliza.livadiotou@bankofcyprus.com Annita Pavlou Manager Investor Relations & ESG Tel: +357 22 122740, E
Slide 41: ESG update
Executive Summary – Updated Financial Targets ESG update https://www.bankofcyprus.com/globalassets/csr/sustainability-reports/j-03688-2024-boc-csr-sustainability-report- redesign-english-final-res.pdf Appendix 41
Slide 42: ESG Milestones by 1H2024
ESG Milestones by 1H2024 • Successfully issued the first Green bond (€300 mn) in 2Q2024; eligible for inclusion in Green Bond Dataset of Climate Bond E • Initiative Published the second TCFD report and EU Taxonomy Disclosure tables in accordance with Article 8 in 1Q2024 • Following the Energy Perfor
Slide 43: ESG Journey
ESG Journey The ESG strategy formulated in 2021 is continuously expanding. The Group is maintaining its leading role in the Social and Governance pillars and focuses on increasing the Group’s positive impacts on the Environment, by transforming not only its own operations, but also the operations of
Slide 44: Delivering on our ESG Commitments
Delivering on our ESG Commitments Stakeholder ESG Priorities in 2024 SDG • Set additional decarbonisation targets on loan and investment portfolios • Enhance ESG disclosures to ensure transparency against the ESG performance by publishing the first Investors Corporate Sustainability Reporting Direct
Slide 45: Delivering on our ESG Commitments
Delivering on our ESG Commitments Bank’s performance against baseline of 2021¹: Climate Stability - Target 1: Become Carbon Neutral by reducing Scope 1 & Scope 2 GHG emissions by 42% by 2030 compared to 2021 baseline • c.12% yoy reduction in Scope 1 and c.5% reduction in Scope 2 GHG (42%) (8%) (18%)
Slide 46: Delivering on our ESG Commitments
Delivering on our ESG Commitments Climate Stability – Target 3: Increase portfolio of environmentally friendly loans Climate Stability - Target 4: Increase utilisation of renewable Gross loans (€ mn) 339.8 energy in own operations 16% 272.0 162.6 144.7 Renewable energy 127.4 149,031 128,780 111.7 (k
Slide 47: Delivering on our ESG Commitments
Delivering on our ESG Commitments Financial Inclusion and Resilience - Target 7: Continue supporting start- Health and Safety - Target 8: Contribute and support cancer patients and their ups under The IDEA1 Innovation Center families through the Bank of Cyprus Oncology Centre The IDEA Innovation Cen
Slide 48: Delivering on our ESG Commitments
Delivering on our ESG Commitments Education - Target 11: Provide upskilling/reskilling employee opportunities in line Culture and Heritage - Target 12: The Foundation’s main strategic aim with the digital transformation initiatives to broaden career opportunities is to encourage the research and stu
Slide 49: Appendix: Macroeconomic overview
Table of contents Executive Summary – Updated Financial Targets FY2022 Financial Performance Appendix Macroeconomic overview 49
Slide 50: Cyprus is a Growing Business and Tech Hub in the Region
Cyprus is a Growing Business and Tech Hub in the Region Well educated, highly skilled labour force Labour costs significantly below the average Euro area Level of education (€ ‘000) 27 20 Tertiary 46% 14 14 1 13 12 Wages per capita #2 country in Europe on number of university 7 graduates per capita
Slide 51: EU Recovery and Resilience Facility (RRF)
EU Recovery and Resilience Facility (RRF) To strengthen the economy’s resilience and potential for economically, socially and environmentally sustainable long-term growth and welfare Positive impact expected on GDP and employment over the next 5 years €1.2 bn €1.0 bn 16.5% from EU mechanism addition
Slide 52: Appendix: Additional financial information
Table of contents Executive Summary – Updated Financial Targets FY2022 Financial Performance Appendix Additional financial information 52
Slide 53: Robust Liquidity Position; Significant Surplus Liquidity of €7.5 bn
Robust Liquidity Position; Significant Surplus Liquidity of €7.5 bn Post TLTRO Full Repayment Diversified, mainly retail funded deposit base Highly liquid balance sheet Group deposits Liquid assets • Sticky deposit base sits • 57% insured deposits epo d 5% h 4% 8% • 63% Retail held in c a s 57% sure
Slide 54: Analysis of Deposits
Analysis of Deposits Deposits by Currency (€ bn) Deposits by Customer Sector (€ bn) Currency Jun 23 Dec 23 Mar 24 Jun 24 Sector Jun 23 Dec 23 Mar 24 Jun 24 EUR 17.30 17.51 17.42 17.92 Retail 11.68 11.79 12.16 12.40 USD 1.47 1.45 1.46 1.44 SME 0.97 1.03 1.02 1.08 GBP 0.33 0.31 0.32 0.30 International
Slide 55: Income Statement
Income Statement € mn 1H2024 1H2023 yoy% 2Q2024 1Q2024 qoq% Net Interest Income 420 358 17% 207 213 -3% Net fee and commission income 86 90 -4% 44 42 5% Net foreign exchange gains and net gains on financial instruments 13 21 -38% 6 7 -20% Net insurance result 23 25 -7% 13 10 30% Net gains/(losses) f
Slide 56: Consolidated Balance Sheet
Consolidated Balance Sheet % % Assets (€ mn) 30.06.2024 31.12.2023 change Liability and Equity (€ mn) 30.06.2024 31.12.2023 change Cash and balances with central banks 7,287 9,615 -24% Deposits by banks 405 472 -14% Loans and advances to banks 384 385 0% Funding from central banks - 2,044 -100% Reve
Slide 57: ROTE on 15% CET1 Ratio
ROTE on 15% CET1 Ratio TBV adjusted for excess CET1 capital on a 15% CET1 ratio ROTE on 15% CET1 € mn Jun 24 Mar 24 Dec 23 € mn Jun 24 Mar 24 Mar 23 Shareholders’ equity 2,387 2,381 2,247 PAT annualised 544 534 384 Average TBV adjusted - Intangible assets (46) (47) (49) for excess CET1 1,843 1,835 1
Slide 58: Capital Position; Quarterly Evolution
Capital Position; Quarterly Evolution min OCR1 requirement for 2024 23.3% 18.3% 5.0% 17.1% 17.6% 1.3% (0.5%) (0.1%) 1.3% (0.7%) 16.06% 11.36% 4 Regulatory CET1 1Q2024 profits distribution accrual CET1 incl. 2Q2024 profits distribution accrual AT1 coupon CET1 incl. AT1 & T2 Capital Ratio incl. Mar 24
Slide 59: Risk Weighted Assets – Regulatory Capital
Risk Weighted Assets– Regulatory Capital Risk Weighted Assets by Geography Reconciliation of Group Equity to CET1 € mn 30.06.2024 € mn 31.12.22 31.12.23 31.03.24 30.06.24 Shareholder’s equity 2,387 Cyprus 10,059 10,297 10,504 10,548 Less: Intangibles (21) Overseas 55 44 44 32 Less: Deconsolidation o
Slide 60: Overall Capital Requirements
Overall Capital Requirements CET1 ratio Total capital ratio 16.06% 15.56% c.0.94% CCyB c.0.48% 11.36% c.1.88% O-SII 1.50% 10.72% c.0.94% CCyB c.0.48% CCB 2.50% 2.50% c.1.88% O-SII 1.50% Pillar 2R 3.08% 2.75% CCB 2.50% 2.50% Tier 2 2.00% 2.00% Pillar 2R 1.73% 1.55% AT1 1.50% 1.50% Total Pillar 1: 8%
Slide 61: Buffer to MDA Restrictions Level & Distributable Items
Buffer to MDA Restrictions Level & Distributable Items1 CET1 Ratios 695 bps 18.3% 11.4% • Significant CET1 MDA buffer as at 30 June 2024: 695 bps (€736 mn) • Distributable items1 of €1,549 mn for BOCH as at 30 June 2024 • BOCH fully utilises its AT1 and Tier 2 buckets as at 30 June 2024 • Distributi
Slide 62: 2024 Final MREL Requirement Already Achieved with Significant Buffer
2024 Final MREL Requirement Already Achieved with Significant Buffer • Successful issuance of €300 mn MREL-Eligible Green Senior Preferred MREL (% of RWAs) Notes in April 2024 • MREL ratio including capital used to meet the CBR1 ( as % of RWAs) at 33.4%2 33.4% 30.3% as at 30 June 2024 3 1 10.0% c.5.
Slide 63: Income Statement Bridge for 1H2024
Income Statement Bridge1 for 1H2024 Underlying Statutory € mn Other basis Basis Net interest income 420 - 420 Net fee and commission income 86 - 86 Net foreign exchange gains and net gains on financial instruments 13 - 13 Net gains on derecognition of financial assets measured at amortised cost - 1
Slide 64: Analysis of Interest Income and Interest Expense
Analysis of Interest Income and Interest Expense Analysis of Interest Income (€ mn) 1Q2023 2Q2023 3Q2023 4Q2023 1Q2024 2Q2024 Loans and advances to customers 113 131 138 141 138 139 Loans and advances to banks and central banks 57 76 92 97 92 73 Repurchase agreements - - - 3 4 7 Investments and othe
Slide 65: Income Statement by Business line for 1H2024
Income Statement by Business line for 1H2024 International International Consumer SME Corporate € mn corporate Business RRD REMU Insurance Treasury JCC Other Total Banking Banking Banking Banking Unit Net interest income/(expense) 214 29 80 18 64 8 (14) - 24 - (3) 420 Net fee & commission income/(ex
Slide 66: Statutory Income Statement for Insurance Businesses for 1H2024
Statutory Income Statement for Insurance Businesses for 1H2024 € mn 1H2024 1H2023 yoy% € mn 1H2024 1H2023 yoy% Insurance revenue 39.3 36.8 7% Insurance service expense (23.6) (23.3) 1% Insurance revenue 33.4 31.1 7% Net insurance service result 15.7 13.5 16% Insurance service expense (18.2) (14.9) 2
Slide 67: Appendix: Additional Asset Quality Slides
Table of contents Executive Summary – Updated Financial Targets FY2022 Financial Performance Appendix Additional Asset Quality Slides 67
Slide 68: Well Diversified Loan Portfolio With High Quality Collateral
Well Diversified Loan Portfolio With High Quality Collateral Gross loans (excluding legacy)1 by business sector of €10.06 bn € bn Housing Other Private 3.86 0.72 4.58 Individuals Hotels & 1.23 Catering Private individuals Private individuals Business Real Estate 0.97 LTV2 Housing Other €5.48 bn €3.8
Slide 69: Gross Loans and NPE Coverage by Customer Type
Gross Loans and NPE Coverage by Customer Type Gross loans by customer type € mn Dec 23 Mar 24 Jun 24 Retail Housing 3,556 3,575 3,597 Retail other 994 1,038 1,054 SMEs 1,010 1,024 1,021 International corporate 763 773 821 Corporate 3,747 3,866 3,825 Total 10,070 10,276 10,318 Corporate SMEs Retail D
Slide 70: Loans by Economic Activity and Arrears Analysis
Loans by Economic Activity and Arrears Analysis Gross loans (€ mn) Dec 23 Mar 24 Jun 24 Loans arrears analysis Dec 23 Mar 24 Jun 24 Trade 886 940 939 (€ mn) Manufacturing 364 377 375 Loans with no arrears 9,675 9,897 9,989 Hotels & Catering 1,178 1,250 1,249 Loans with arrears but not 30 32 35 NPEs
Slide 71: €53 mn Net NPE Outflows in 2Q2024
€53 mn Net NPE Outflows in 2Q2024 Analysis of total inflows(€ mn) 2Q2024 1Q2024 4Q2023 3Q2023 2Q2023 1Q2023 New inflows 7 8 6 9 9 7 Redefaults 0 1 1 0 1 2 Unlikely to pay 1 2 53 37 1 1 Total inflows 8 11 60 46 11 10 Analysis of total outflows (€ mn) Curing of restructuring (18) (6) (9) (7) (8) (13)
Slide 72: Gross Loans and Coverage by IFRS 9 Staging
Gross Loans and Coverage by IFRS 9 Staging Gross loans by IFRS 9 stage Allowance for expected loan credit losses Coverage ratio (€ mn) 10,070 10,276 10,318 267 267 Dec 23 Mar 24 Jun 24 251 Stage 1 8,335 8,621 8,928 87% 64 84 63 Stage 1 1.0% 0.7% 0.7% 44 42 49 Stage 2 3.1% 3.4% 4.5% Stage 2 11% 159 1
Slide 73: Stage 2 Exposures Well Collateralised; 97% of Exposures Present no Arrears
Stage 2 Exposures Well Collateralised; 97% of Exposures Present no Arrears € mn 1,096 4.2% Trade 58 49 Limited migration rate of Stage 2 to • Net c.€210 mn Stage 2 loans were migrated to 15.7% Real estate Of which: Stage 3 at 2.1% Stage 1 in 1H2024, of which c.€170 mn in 2Q2024 Other 182 • €214 mn (
Slide 74: Rescheduled Loans
Rescheduled Loans1 Rescheduled loans1 by customer type Fair value of collateral and credit enhancements € bn Dec 23 Mar 24 Jun 24 30 Jun 2024 Loans and advances to customers (€ mn) Retail housing 0.14 0.12 0.11 Cash 535 Retail other 0.03 0.03 0.03 Securities 777 SMEs 0.04 0.04 0.03 Letters of credit
Slide 75: REMU - the Engine for Dealing with Foreclosed Assets
REMU - the Engine for Dealing with Foreclosed Assets €2.05 bn sales1 of 4,707 properties across all property classes since set-up €65 mn sales1,4 in 1H2024; comfortably above Book Value Sales € mn (contract prices1) # 99 # 331 # 579 # 1,130 # 674 # 569 #258 Net Proceeds / BV 107% 94% 133% 109% # 575
Slide 76: REMU - the Engine for Dealing with Foreclosed Assets
REMU - the Engine for Dealing with Foreclosed Assets Evolution of repossessed properties managed by REMU By type (€ mn) Group BV (€ mn) Land 35 Golf 862 14 13 50 (57) Commercial & Manufacturing 130 365 Hotels 790 (26) Residential 790 (3) 197 Overseas 1 Jan 2024 Additions Sales Impairments & Transfer
Slide 77: Appendix: Glossary & Definitions
Table of contents Executive Summary – Updated Financial Targets FY2022 Financial Performance Appendix Glossary & Definitions 77
Slide 78: Glossary & Definitions
Glossary & Definitions AC Amortised cost bonds. Adjusted recurring profitability The Group’s profit after tax before non-recurring items (attributable to the owners of the Company) taking into account distributions under other equity instruments such as the annual AT1 coupon. Advisory and other tran
Slide 79: Glossary & Definitions
Glossary & Definitions DTA Deferred tax asset. DTC Deferred Tax Credit. EBA European Banking Authority. ECB European Central Bank. Effective yield Interest Income on Loans/Average Net Loans. Effective yield of liquid assets Interest income on liquids after hedging, over average liquids (Cash and bal
Slide 80: Glossary & Definitions
Glossary & Definitions Legacy exposures Legacy exposures are exposures relating to (i) Restructuring and Recoveries Division (RRD), (ii) Real Estate Management Unit (REMU), and (iii) non-core overseas exposures. Leverage Ratio Exposure (LRE) Leverage Ratio Exposure (LRE) is defined in accordance wit
Slide 81: Glossary & Definitions
Glossary & Definitions Non-interest income comprises Net fee and commission income, Net foreign exchange gains/(losses) and net gains on financial instruments and (excluding net gains on loans and advances to Non-interest income customers at FVPL), Net insurance result, Net gains/(losses) from reval
Slide 82: Glossary & Definitions
Glossary & Definitions Non-legacy (performing) Relates to all business lines excluding Restructuring and Recoveries Division (“RRD”), REMU and non-core overseas exposures. The NSFR is calculated as the amount of “available stable funding” (ASF) relative to the amount of “required stable funding” (RS
Slide 83: Glossary & Definitions
Glossary & Definitions Return on Tangible equity (ROTE) Calculated as Profit/(loss) after tax (attributable to the owners of the Company) (annualised - (based on year - to - date days), divided by the quarterly average of Shareholders’ equity minus on 15% CET1 ratio intangible assets and after deduc