Bank of Cyprus Holdings PLC · CSECY:BOCH
Bank of Cyprus — Q1 2012 Earnings Presentation
39 slides from Bank of Cyprus's earnings presentation, May 10, 2012
Slide 1: Bank of Cyprus Group Financial Results 1Q 2012
Bank of Cyprus Group Financial Results 1Q 2012 – Highlights Income Statement Review Balance Sheet Review and Capital position Performance by Geographic Market Strategic Priorities for 2012 Appendices Financial Results 1Q 2012 10 May 2012 1
Slide 2: Disclaimer
Disclaimer 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 suc
Slide 3: Table of Contents
Table of Contents I. Financial Results 1Q 2012 - Highlights II. Income Statement Review III. Balance Sheet and Capital position IV. Performance by Geographic Market V. Strategic Priorities for 2012 VI. Appendices 3
Slide 4: Financial Results 1Q 2012 - Highlights
Financial Results 1Q 2012 - Highlights Income Statement Review Balance Sheet Review and Capital position Performance by Geographic Market Strategic Priorities for 2012 Appendices Financial Results 1Q 2012- Highlights 4
Slide 5: 1Q 2012 Financial Highlights
1Q 2012 Financial Highlights Increasing Profitability • 1Q12 Net Interest Income €295 mn (+7% yoy) • 1Q12 Profit before provisions €219 mn (+25% yoy) • Excluding non-recurring credit in employee costs of €13 mn profit before provisions up by 18% yoy • 1Q12 Profit after tax and excluding the change i
Slide 6: 1Q 2012 Financial Highlights
1Q 2012 Financial Highlights Healthy Liquidity • Group loans to deposits ratio at 93% (peers* at 137%) • Deposits to total assets 76% (peers* at 49%) • Minimal debt repayments in the next two years Asset Quality • NPLs ratio at 11,9% • NPLs provisioning coverage at 46% • NPLs coverage at 114% taking
Slide 7: Income Statement Review
Financial Results 1Q 2012 – Highlights Income Statement Review Balance Sheet and Capital position Performance by Geographic Market Strategic Priorities for 2012 Appendices Income Statement Review 7
Slide 8: Increased Pre-provision Profitability and High Efficiency
Increased Pre-provision Profitability and High Group Efficiency Profit & Loss highlights (€ mn) +6% 378 1Q11 1Q12 +7% 356 276 295 -12% +25% 219 181 175 159 Net Interest Income Operating income Operating expenses Profit before provisions Return on Equity Cost to Income ratio 15,1%* 51,0% 50,9% 47,0%
Slide 9: Profit and Loss highlights
Group Profit and Loss highlights Amounts in € mn 1Q12 1Q11 Change Total Income 378 356 +6% Profit before provisions 219 175 +25% Profit after tax excluding GGBs impairment 99 74 +33% and related tax Change in fair value of related hedging derivatives for GGBs and tax for GGBs 197 -- -- impairment *
Slide 10: Higher Interest Margins and Increasing Net Interest Income
Higher Interest Margins and Increasing Net Group Interest Income Group Net Interest Margin (bp) 334 331 • 1Q12 Group NIM at 3,31%, an increase of 311 54 basis points compared to 1Q11 (2,77%) 278 255 251 260 264 265 272 277 213 236 • 1Q12 Net Interest Income at €295 mn (+7% yoy) FY10: 266 FFY11: 298
Slide 11: Net Interest Income and Net Interest Margin trends in main markets
Net Interest Income and Net Interest Margin Group trends in main markets Net Interest Income and NIM - Cyprus 256 271 Net Interest Income and Net Interest Margin 248 221 223 in main markets 202 210 213 210 213 219 187 184 161 165 157 • Cyprus – 1Q12 NII at €157 mn (+13% yoy) 143 121 120 128 139 136
Slide 12: Balance Sheet and Capital position
Financial Results 1Q 2012 – Highlights Income Statement Review Balance Sheet and Capital position Performance by Geographic Market Strategic Priorities for 2012 Appendices Balance Sheet and Capital position 12
Slide 13: Solid Funding Structure: Strong Deposit Franchise and Limited Wholesale Funding
Solid Funding Structure: Strong Deposit Franchise Group and Limited Dependence on Wholesale Funding Net Loans % Customer deposits Customer deposits % Total Assets 135% 137% 129% 120% 77% 78% 80% 79% 76% 89% 92% 93% 87% 86% 55% 50% 48% 49% 31.03.11 30.06.11 30.09.11 31.12.11 31.03.12 31.03.11 30.06.1
Slide 14: Loan quality
Group Loan quality Group NPLs ratio and Provision • Loan quality coverage Group NPLs ratio at 11,9% NPLs ratio in Cyprus 11,5% Provision Coverage NPLs ratio NPLs ratio in Greece 13,4 NPLs ratio in Russia 11,8% 55% 54% 54% 51% 46% • Provision coverage at 46% 11,9% • NPLs coverage increases to
Slide 15: High Ability to Manage Through Credit Cycle Due to Increased Pre-provision Profit Margin
High Ability to Manage Through Credit Cycle Group Due to Increased Pre-provision Profit Margin Provision charge Pre-provision profit margin 52% 53% 148 44% 44% 45% 46% 49% 49% 46% 135 134 139 126 281 293 322 109 107 111 109 252 250 261 268 243 246 426 375 135 134 148 139 295 109 107 111 109 126 229
Slide 16: Strengthening of capital position
Group Strengthening of capital position Capital adequacy ratios Taking into account the €592 mn increase in Core tier 1 capital in March 2012 (comprising €160 mn 9,2% from Rights Issue and €432 from conversion of 8,9% Convertible Enhanced Capital Securities (CECS) 7,8% to shares), Tier 1 capital rat
Slide 17: Improving capital position
Group Improving capital position The Group has been improving its capital position Capital Strengthening Plan improved Core Tier 1 by €592 mn in March 2012 (€160 mn from Rights Issue and €432 from conversion of CECS to shares) Sale of Bank of Cyprus Australia Ltd in 2011 improved Core Tier 1 by
Slide 18: Performance by Geographic Market
Financial Results 1Q 2012 – Highlights Income Statement Review Balance Sheet Review and Capital position Performance by Geographic Market Strategic Priorities for 2012 Appendices Performance by Geographic Market 18
Slide 19: Resilient Cypriot operations
Cyprus Resilient Cypriot operations Profit & Loss Highlights (€ mn) Cyprus NII (€ mn), NIM and Spread (bp) NII NIM Customer Spread 1Q11 1Q12 +14% 350 358 357 325 325 326 331 314 325 337 157 +38% 301 139 143 258 +55% 236 103 94 256 271 248 +14% 221 210 213 210 213 219 223 61 187 202 184 161 165 157 1
Slide 20: Leading financial institution in Cyprus with an unrivalled deposit franchise
Leading financial institution in Cyprus with an Cyprus unrivalled deposit franchise • A strong deposit franchise benefiting from a flight to quality; 31,4% deposit market share (bigger than the Gross Loans (€ bn) combined share of 2nd and 3rd largest banks); a 3,3 Retail SMEs Corporate percentage po
Slide 21: Greece: Facing a challenging market
Greece Facing a challenging market Profit & Loss Highlights (€mn) Greece NII (€mn), NIM and Spread (bp) 1Q11 1Q12 NII NIM Customer Spread 340 +16% 322 328 320 320 92 302 302 291 289 305 314 284 79 317 +23% 302 +44% 209 275 57 55 239 256 258 47 226 214 219 222 38 193 201 154 3 84 77 77 76 80 79 79 85
Slide 22: Managing portfolio through difficult economic conditions
Managing portfolio through difficult economic Greece conditions Gross Loans (€ bn) • Loans to deposits ratio 127% Retail SMEs Corporate • Bigger reduction of loan book compared to 10,2 10,0 9,8 -4% yoy the market 3,3 3,4 3,4 +2% yoy • Based on Bank of Greece statistics, 3,7 3,6 3,5 -6% yoy Annual
Slide 23: Russia: Performance to benefit from business expansion
Performance to benefit from business Russia expansion Russia NII (€ mn) & NIM (bp) Profit & Loss Highlights (€ mn) Net Interest Income Net Interest Margin 1Q11 1Q12 598 630 631 619 -16% 559 570 595 510 470 473 505 33 396 414 28 32 34 34 32 33 30 31 28 24 -22% 19 21 +9% 15 16 12 9 7 6 4 3 1Q09 2Q09 3
Slide 24: Russia: Continuing business expansion
Russia Continuing business expansion Gross Loans (€ bn) Customer Deposits (€ bn) 1,35 2,09 1,29 2,00 1,89 1,12 1,02 1,41 0,90 1,17 31.12.08 31.12.09 31.12.10 31.12.11 31.03.12 31.12.08 31.12.09 31.12.10 31.12.11 31.03.12 Loan diversification • Business expansion continued in 1Q12 Car finance Other 8
Slide 25: Romania - Ukraine: Resilient EE operations
Romania - Ukraine Resilient EE operations Profit and Loss Highlights Romania Profit and Loss Highlights Ukraine (€ mn) (€ mn) 6,6 1Q11 1Q12 1Q11 1Q12 5,9 4,8 4,7 5,2 3,0 2,9 2,5 2,1 2,0 2,1 2,2 1,9 0,8 0,8 0,3 Net Interest Profit before Provisions Profit after Net Interest Profit before Provisions P
Slide 26: Strategic priorities for 2012
Financial Results 1Q 2012 – Highlights Income Statement Review Balance Sheet Review and Capital position Performance by Geographic Market Strategic Priorities for 2012 Appendices Strategic priorities for 2012 26
Slide 27: Strategic priorities for 2012
Strategic priorities for 2012 Strategic priorities for 2012 Strengthen capital position Safeguard healthy liquidity Maintain organic profitability Manage risks effectively 27
Slide 28: Key information and contact details
Key information and contact details Credit Ratings: Participation in indices: Fitch: BB+ / F-2 / B CSE General Index , FTSE/CySE 20 Moody’s : B1 / NP / E+ FTSE/ATHEX Top 20 Listing: FTSE Med 100 ATHEX – BOC FTSE New EU CSE – BOCY DJ STOXX EU Enlarged TMI ISIN CY0000100111 Contacts Yiannis Kypri Chri
Slide 29: Appendices
Financial Results 1Q 2012 – Highlights Income Statement Review Balance Sheet Review and Capital position Performance by Geographic Market Strategic Priorities for 2012 Appendices Appendices 29
Slide 30: Profit and Loss
Group Profit and Loss (€ mn) 1Q12 1Q11 yoy % 4Q11 1Q12v4Q11 % Net interest income 295 276 +7% 313 -6% Net fee & commission income 56 56 -1% 61 -10% FX income and net gains from financial instruments 10 4 +91% 16 -35% Insurance income net of insurance claims 16 17 -5% 14 +12% Other income 1 3 -43% 10
Slide 31: Balance Sheet Overview
Group Balance Sheet Overview € mn % yoy 31.03.12* 31.03.11*** € mn % 31.03.12 31.03.11*** yoy Cash and balances with Amounts due to banks and +62% 1.575 971 +22% 5.244 4.282 central banks repurchase agreements Customer deposits Placements with banks and -9% 29.187 32.194 reverse repurchase -25% 4.02
Slide 32: Gross Loans by Geography
Group Gross Loans by Geography 28,2 28,9 28,8 Total 1,9 2,0 1,9 1,9 2,0 2,1 (€ bn) Other countries 10,2 10,0 9,8 Russia Greece 14,2 14,9 15,0 Cyprus 31.03.11 31.12.11 31.03.12 31.03.11 As % of 31.03.12 As % of YoY (%) Market (Eur mn) total (Eur mn) total Share (%) Cyprus 14.151 50% 15.009 52% +6% 28
Slide 33: Gross Loans Segmental Diversification
Group Gross Loans Segmental Diversification Group: €28.800 mn Consumer Credit 12% (2% yoy) Mortgages Corporate 19% 45% (-0% yoy) (+6% yoy) SMEs 24% (-2% yoy) Cyprus: €15.009 mn Greece: €9.810 mn Consumer Consumer Credit Credit 13% 13% Corporate (+12% yoy) (-12% yoy) 34% Mortgages (+2% yoy) Mortgages
Slide 34: Customer Deposits by Geography
Group Customer Deposits by Geography 31,3 29,7 29,2 Total 1,4 1,5 1,5 1,3 1,3 1,3 (€ bn) Other countries 9,5 7,7 7,2 Russia Greece Cyprus 19,1 19,2 19,2 31.03.11 31.12.11 31.03.12 31.03.11 As % of 31.03.12 As % of YoY (%) Market (Eur mn) total (Eur mn) total Share (%) Cyprus 19.096 61% 19.220 66% +1
Slide 35: Cyprus: Summary profit & loss and key indicators
Cyprus: Summary profit & loss and key indicators Excluding the change in fair value of related hedging instruments and taxation for GGBs impairment (€ mn) 1Q12 1Q11 1Q12 versus 1Q11 (%) Net interest income 157 139 +14% Net fee & commission income 35 33 +6% Foreign exchange income and gains from fina
Slide 36: Greece: Summary profit & loss and key indicators
Greece: Summary profit & loss and key indicators Excluding the change in fair value of related hedging instruments and taxation for GGBs impairment (€ mn) 1Q12 1Q11 1Q12 versus 1Q11 (%) Net interest income 92 79 +16% Net fee & commission income 12 12 +5% Foreign exchange income and gains from financ
Slide 37: Russia: Summary profit & loss and key indicators
Russia: Summary profit & loss and key indicators (€ mn) 1Q12 1Q11 1Q12 versus 1Q11 (%) Net interest income 28 33 -16% Net fee & commission income 7 8 -18% Foreign exchange income and gains from financial 3 1 +157% instruments Insurance income net of insurance claims -- -- -- Other income 0 1 -40% To
Slide 38: Other countries: Summary profit & loss and key indicators
Other countries: Summary profit & loss and key indicators (€ mn) 1Q12 1Q11 1Q12 versus 1Q11 (%) Net interest income 18 24 -27% Net fee & commission income 2 3 -47% Foreign exchange income and gains from financial 1 0 +316% instruments Insurance income net of insurance claims -- -- -- Other income 0
Slide 39: Operations in United Kingdom
Operations in United Kingdom Profit and Loss Highlights UK (€ mn) 1Q11 1Q12 7,1 7,0 3,9 3,2 2,0 2,1 1,5 0,3 Net Interest Profit before Provisions Profit after tax Income provisions UK Loans and Deposits (€ mn) 1.260 1.186 1.210 1.158 1.077 1.041 1.036 993 31.12.10 31.03.11 31.12.11 31.03.12 Loans De