Bank Of Cyprus Holdings Plc · CSECY:BOCH
Bank Of Cyprus — 9M2023 Earnings Presentation
75 slides from Bank Of Cyprus's earnings presentation, Nov 13, 2023
Slide 1: Group Financial Results for the nine months ended 30 September 2023
Bank of Cyprus Group Group Financial Results For the nine months ended 30 September 2023
Slide 2: Disclaimer
DISCLAIMER The financial information included in this presentation is not audited by the Group’s external Examples of forward-looking statements include, but are not limited to, statements relating auditors. to the Group’s near term, medium term and longer term future capital requirements and ratios
Slide 3: Table of Contents
Table of Contents Executive Summary – Updated Financial Targets 1. Executive Summary 2. 9M2023 Financial Performance 3. Capital, Liquidity & Asset Quality 4. ESG update 5. Appendix Appendix 3
Slide 4: Why Bank of Cyprus
Why Bank of Cyprus Strong Macro Market Leader • Open economy growing faster than the Eurozone • Market leader in a consolidated market • Strong recovery in tourism, proving Cyprus resilience • 42% loan market share; 38% deposit market share • Fiscal discipline, sovereign rated investment grade • #1
Slide 5: Resilient Economic Performance Despite Uncertainties
Resilient Economic Performance Despite Uncertainties GDP growth of 2.3% for 2Q2023 Unemployment rate decreased to 6.1% in 2Q2023 Real GDP (yoy % change) Quarterly (%) (seasonally adjusted) 2021: 10.2% 2022: 5.1% 2021: 7.5% 2022: 6.8% 16.9% 15.00% 10.00% 8.3% 3.4% 5.00% 14.8% 2.8% 2.3% GDP growth rev
Slide 6: Strong Profitability; Third Consecutive Quarter with >20% ROTE
Strong Profitability; Third Consecutive Quarter with >20% ROTE Net Interest Income up 9% qoq Broadly stable cost to income ratio1 at 30% (€ mn) 214 60% 196 57% 162 47% 136 39% 34% 29% 30% 89 71 74 1Q2022 2Q2022 3Q2022 4Q2022 1Q2023 2Q2023 3Q2023 1Q2022 2Q2022 3Q2022 4Q2022 1Q2023 2Q2023 3Q2023 Stron
Slide 7: 9M2023 Performance Tracking Better than 2023 Targets
9M2023 Performance Tracking Better than 2023 Targets 9M2023 FY2023 targets (June 2023) FY2023 Expectations Net Interest €572 mn >€650 mn NII will remain strong with 4Q2023 at similar levels to Income 3Q2023 Cost to Reflecting stronger income, cost to income ratio1 will be 31% sub 40% Income Ratio1 c
Slide 8: Digital Offerings via Digital Channels Enhance Group's Sales
Digital Offerings via Digital Channels Enhance Group’s Sales Digital sales 4,724 new customers onboarded e-deposits at €227 mn, up e-deposits accounts up through digital channels since Jan 2022 26% yoy 123% yoy (€mn) 2,404 2,008 1,349 1,601 212 221 227 180 195 1,279 778 881 1,080 479 586 539 112 Dec
Slide 9: Table of Contents
Table of Contents Executive Summary – Updated Financial Targets 1. Executive Summary 2. 9M2023 Financial Performance 3. Capital, Liquidity & Asset Quality 4. ESG update 5. Appendix Appendix 9
Slide 10: 9M2023 Highlights
9M2023– Highlights • Continued strong economic growth; Cyprus GDP expanded by 2.3%1 in 2Q2023, outperforming the Eurozone average Resilient economic • New lending of c.€1.6 bn, despite the rising interest rate environment outlook • Gross performing loan book at €9.9 bn, broadly flat year on year as
Slide 11: Income Statement
Income Statement 9M2023 9M2022 3Q2023 2Q2023 qoq% yoy% € mn IFRS 17 Net Interest Income 572 234 214 196 9% 144% Non-interest income 224 213 71 81 -13% 5% Total income 796 447 285 277 3% 78% Total operating expenses1 (248) (241) (86) (82) 5% 3% Operating profit 518 179 187 188 -1% 190% Provisions and
Slide 12: NII up 9% qoq and Remains Strong
NII up 9% qoq and Remains Strong NII of €214 mn, up 9% qoq Effective yield on assets & cost of funding 343 363 Performing loans Cost of deposits NIM400 bps 291 +144% Liquid assets 2 Cost of wholesale funding 2 236 yoy 153 (bps) 200 572 520 547 455 +9% 390 319 0 qoq 292 301 346 250 214 155 3 298 196
Slide 13: NII Sensitivities
NII Sensitivities FY2023 3Q2023 2Q2023 assumptions1 • NII will remain strong with 4Q2023 at similar levels to 3Q2023 (ECB depo rate expected to remain flat at 4.0% until year end) Average ECB depo rate 3.0% 3.7% 3.2% • 1 percentage point increase in Time and Notice deposit pass-through2 reduces NII
Slide 14: Highly Liquid Balance Sheet
Highly Liquid Balance Sheet • Cash, balances with Central Banks of €9.6 bn, of which €2.0 bn TLTRO III 30 September 2023 • Benefitting from the high ECB depo rates1 (€ bn) 26.35 26.35 • Securities of €3.6 bn (of which €3.5 bn fixed income portfolio) Other assets 1.87 1.29 Other • Fixed income portfo
Slide 15: Robust Liquidity Position; Surplus Liquidity of €8.6 bn
Robust Liquidity Position; Surplus Liquidity of €8.6 bn Diversified, mainly retail funded deposit base Highly liquid balance sheet Group deposits Liquid assets • Sticky deposit base • 58% insured deposits 5% 3% 20% • 61% Retail 23% • Average size of retail deposits: c.€27k €13.5 bn 56% €19.3 bn 14%
Slide 16: Retail Funded Deposit Base up 3% yoy; Loan to Deposit Ratio at 51%
Retail Funded Deposit Base up 3% yoy; Loan to Deposit Ratio at 51% Deposits at €19.3 bn; market share at 37.7% Resilient deposit pass through2 at 15%; assumed to gradually increase to 50% +3% by June 2024 yoy Time & Notice Savings, Current & Demand Cost of deposits (bps) € bn 19.2 19.3 18.8 19.0 19.
Slide 17: New Lending of c.€1.6 bn in 9M2023; Loan Balances Broadly Flat
New Lending of c.€1.6 bn in 9M2023; Loan Balances Broadly Flat yoy due to Ongoing Repayments New lending of €445 mn in 3Q2023 Gross performing book2 at €9.9 bn € mn Gross loans (€ bn) 1,648 1,563 622 624 9.92 9.80 9.90 9.91 9.86 104 537 64 0.75 0.69 0.67 0.69 0.74 48 489 444 494 445 31 1 50 297 43 3
Slide 18: Fixed Income Portfolio up 54% yoy
Fixed Income Portfolio up 54% yoy Fixed income securities per category - NBV Fixed income securities per issuer type - NBV +54% % assets1 10% 11% 13% 14% yoy 3,489 3,489 (€ mn) 3,178 170 Other financial (€ mn) 3,178 415 144 & other corporations 475 830 Banks 2,500 843 2,500 110 2,259 2,259 298 Cover
Slide 19: Non-Interest Income up 5% yoy Supported by Increased Fees and Commission
Non-Interest Income up 5% yoy Supported by Increased Fees and Commission Total Non-NII (€ mn) +5% yoy 224 213 7 11 26 39 79 81 71 76 72 71 2 3 34 38 66 4 2 12 1 5 6 2 14 17 16 11 2 17 5 REMU 6 13 10 15 2 11 10 10 13 FX and other income 5 6 5 5 6 Net insurance result 3 125 135 38 45 42 45 44 46 45 No
Slide 20: Profitable Life Insurance Business
Profitable Life Insurance Business - Valuable and Sustainable Contribution to the Group € mn 9M2023 9M2022 yoy% IFRS 173 10% 6% 27% Contribution Market Net Insurance result 21.6 19.0 13% Contribution to the share2 Other operating costs to non-NII Group’s PAT (0.9) (2.3) -62% (non-attributable) Net r
Slide 21: Profitable Non-Life Insurance Business
Profitable Non–Life Insurance Business – Valuable and Sustainable Contribution to the Group € mn 9M2023 9M2022 yoy% 7% 5% 14% IFRS 173 Contribution Market Net Insurance result 16.2 14.8 9% Contribution to the share2 to non-NII Group’s PAT Other operating costs (non- (2.0) (3.3) -38% attributable) Re
Slide 22: Leading Card Processing and Payment Solutions Business in Cyprus
Leading Card Processing and Payment Solutions Business in Cyprus € mn 9M2023 9M2022 yoy% 11% 3% 84% Net fee and commission income 20.7 19.2 8% Contribution Market Contribution to the share1 Net other income 2.9 3.2 -11% to non-NII Group’s PAT FX and net gains on revaluation 0.9 1.7 -50% of investmen
Slide 23: Cost to Income Ratio Broadly Stable at 30% in 3Q2023
Cost to Income Ratio1 Broadly Stable at 30% in 3Q2023 Disciplined cost base despite inflationary pressures • Total operating expenses1 up 3% yoy, with savings partly offsetting inflationary pressures (€ mn) 241 248 • Staff costs up 2% qoq and yoy and include termination benefit cost accrual 90 83 84
Slide 24: Table of Contents
Table of Contents Executive Summary – Updated Financial Targets 1. Executive Summary 2. 9M2023 Financial Performance 3. Capital, Liquidity & Asset Quality 4. ESG update 5. Appendix Appendix 24
Slide 25: Robust Capital Position
Robust Capital Position Regulatory (Basel 3) capital ratios Updated capital requirements1,2 – Jan 2024 24.00% 20.7% 15.63% 22.00% 20.4% 20.4% 19.4% 19.0% 19.1% 19.3% 10.92% 20.00% 0.37% (0.18%) 18.00% 10.27% 0.46% 15.2% 15.6% 15.2% 16.00% 14.5% 14.1% 14.2% 14.1% 14.00% 12.00% 10.00% Mar 22 Jun 22 Se
Slide 26: MREL Position
MREL Position • Successful issuance of €350 mn MREL-Eligible Senior Preferred Notes in July 2023 • MREL ratio (% of RWAs1) at 24.1%3 (24.6%4 incl. retained earnings) as at 30 September MREL (% of RWAs) 2023 • MREL ratio (as % of Leverage Ratio Exposure (LRE)) of 11.0%3 (11.2%4 incl. retained earning
Slide 27: NPE Ratio Decreased to 3.5%; Asset Quality Targets Reiterated
NPE Ratio Decreased to 3.5%; Asset Quality Targets Reiterated NPE organically reduced by 3% qoq; residual NPEs comprises mainly retail NPE inflows remain under control 1,018 • Another similar UTP amount (€ mn) Net inflows/ -3% -133 -57 -22 -18 -13 potentially to be recognised 411 (outflows) in 4Q202
Slide 28: COR of 76 bps for 3Q2023 and 58 bps in 9M2023
COR of 76 bps for 3Q2023 and 58 bps in 9M2023, in Line with 2023 Target Cost of risk increased to 58 bps Bank’s IFRS 9 macroeconomic assumptions 0.58% 0.44% 0.44% 0.48% 0.43% Base line GDP rate Unemployment rate 2023 2.5% 6.8% 2024 2.5% 7.0% 1H2022 9M2022 FY2022 1H2023 9M2023 Breakdown of quarterly
Slide 29: REMU stock properties <€1 bn; Cumulative Sales of c.€2 bn
REMU stock properties <€1 bn; Cumulative Sales1 of c.€2 bn since REMU Set-up Inflows substantially reduced with completion of de-risking Organic sales1 consistently close to Open Market Value; comfortably above Book Value Net inflows/ -16 7 -207 -76 -83 (outflows) (€ mn) 196 116% 115% 108% 110% 110%
Slide 30: Bank of Cyprus of Tomorrow
Bank of Cyprus of Tomorrow Strength Profitability c.19% CET1 ratio >13% ROTE Significant surplus capital (>16% based on 15% CET1 ratio) (Generation 200-2502 bps p.a.) Shareholder Asset quality distributions 2025 30-50% <3% Dividend payout ratio1 NPE ratio 1) Any recommendation for a dividend is subj
Slide 31: Concluding remarks
Concluding remarks ✓ 9M2023 performance tracking ahead of 2023 targets ✓ Profit after tax of €129 mn in 3Q2023, equivalent to an annualised ROTE of 25.6% Long Term Deposit rating upgraded to investment grade by ✓ Moody’s in October 2023, for the first time in 12 years 2024 financial targets to be up
Slide 32: Steadily Improving Credit Ratings for BOC
Steadily Improving Credit Ratings for BOC: 2 notches upgrade by Moodys and Fitch Moody’s upgraded rating to Baa3 in October 2023; outlook positive S&P rating to BB-; outlook positive A38 A- 8 Baa1 BBB+ Baa2 7 Baa2 BBB 7 BBB Baa3 Baa3 Investment grade BBB- Investment grade 6 Ba1 BB+ 6 Ba2 BB 5 Ba3 BB
Slide 33: Key Information and Contact Details
Key Information and Contact Details Contacts Investor Relations & ESG Executive Director Finance Tel: +35722122239, Email: investors@bankofcyprus.com Eliza Livadiotou, Tel: +35722 122128, Email: eliza.livadiotou@bankofcyprus.com Annita Pavlou Manager Investor Relations & ESG Tel: +357 22 122740, Ema
Slide 34: ESG update
Table of Contents Executive Summary – Updated Financial Targets ESG update https://www.bankofcyprus.com/globalassets/csr/sustainability-reports/bocsustainabilityreport2022_eng.pdf Appendix 34
Slide 35: Delivering on our ESG Commitments
Delivering on our ESG Commitments Stakeholder ESG Priorities Going Forward Progress so far SDG Alignment • Set decarbonization target aligned with climate scenario IEA B2DS on Mortgage portfolio so to manage transition risks and align the portfolio with the Net Zero commitment of 2050 • Estimate Fin
Slide 36: Delivering on our ESG Commitments
Delivering on our ESG Commitments Climate Stability - Target 1: Become Carbon Neutral by 2030 Performance against baseline of 2021 by reducing Scope 1 & Scope 2 GHG emissions by 42% by 2030 • c.8% yoy reduction in Scope 1 & Scope 2 GHG emissions in FY2022 (42%) • c.18% yoy reduction in Scope 1 GHG e
Slide 37: Delivering on our ESG Commitments
Delivering on our ESG Commitments Climate Stability – Target 3: Increase portfolio of environmentally friendly loans Climate Stability – Target 4: Reduce paper consumption -42% Gross loans (€ mn) # of accounts 60 50 20.9 21.6 524 17.8 39 38 36 15.5 339 40 29 304 263 209 20 4.2 1.8 1.9 63 1.3 13 11 0
Slide 38: Delivering on our ESG Commitments
Delivering on our ESG Commitments Financial Inclusion and Resilience - Target 6: Continue Health and Safety - Target 7: Contribute and support cancer patients and supporting start-ups under IDEA1 Innovation Centre. their families through the Bank of Cyprus Oncology Centre IDEA Innovation Centre (sin
Slide 39: Delivering on our ESG Commitments
Delivering on our ESG Commitments Education - Target 10: Provide upskilling/reskilling employee opportunities in Culture and Heritage - Target 11: Increase Bank of Cyprus line with the digital transformation initiatives to broaden career opportunities Cultural Foundation activities and attendees Tra
Slide 40: Leverage Leading Digital Capabilities to Serve Customers and the Economy
Leverage Leading Digital Capabilities to Serve Customers and the Economy Digital transactions ratio at 95% Active users of Internet and/or Mobile Banking Leader in shaping the digital transformation of local economy 93% 95% (k ‘000) 445 88% 405 357 2 2 Sep 211 Sep 221 Sep 23 Sep 21 Sep 22 Sep 23 Ove
Slide 41: Macroeconomic overview
Table of contents Executive Summary – Updated Financial Targets FY2022 Financial Performance Appendix Macroeconomic overview 41
Slide 42: Strong, Diversified Economy Demonstrated by Key Enablers
Strong, Diversified Economy Demonstrated by Key Enablers A diversified, service-based economy Cyprus Public Debt to GDP below Euro area average Structure of Economy in 2022 (% of GVA) As at 30 September 2023 167% Public debt expected to 142% decrease to c.63%1 by end- 9% 9% Wholesale & Retail trade
Slide 43: 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) 24 19 Tertiary 43% 14 13 13 1 Wages per capita 11 #3 country in Europe on 7 number of university graduates per capita
Slide 44: EU Recovery and Resilience Facility (RRF)
EU Recovery and Resilience Facility (RRF) To mitigate the socioeconomic impact of the pandemic & to strengthen the resilience and competitiveness of the Cypriot economy c.7% increase in GDP for 2022-2026 €1.2 bn €1.0 bn from EU mechanism additional funds mobilised in Cyprus c.3% increase in employme
Slide 45: Additional financial information
Table of contents Executive Summary – Updated Financial Targets FY2022 Financial Performance Appendix Additional financial information 45
Slide 46: Analysis of Deposits
Analysis of Deposits Deposits by Currency (€ bn) Deposits by Customer Sector (€ bn) Currency Sep 22 Dec 22 Jun 23 Sep 23 Sector Sep 22 Dec 22 Jun 23 Sep 23 Retail 11.13 11.35 11.68 11.68 EUR 16.69 17.07 17.30 17.35 SME 0.95 1.01 0.97 1.01 USD 1.70 1.53 1.47 1.53 International 0.14 0.14 0.13 0.14 GBP
Slide 47: Income Statement
Income Statement 9M2022 € mn 9M2023 3Q2023 2Q2023 qoq% yoy% IFRS 17 Net Interest Income 572 234 214 196 9% 144% Net fee and commission income 135 142 45 46 -1% -5% Net foreign exchange gains and net gains/(losses) on financial instruments 29 14 8 8 -13% 110% Net insurance result 38 34 13 15 -12% 12%
Slide 48: Consolidated Balance Sheet
Consolidated Balance Sheet 31.12.2022 % 31.12.2022 % Assets (€ mn) 30.09.2023 IFRS 17 change Liability and Equity (€ mn) 30.09.2023 IFRS 17 change Cash and balances with central banks 9,565 9,567 0% Deposits by banks 443 508 -13% Loans and advances to banks 410 205 100% Funding from central banks 2,
Slide 49: Capital Position; Quarterly Evolution
Capital Position; Quarterly Evolution min OCR1 requirement for 2023 21.0% 5.2% 15.12% 16.0% 15.6% 15.8% (0.4%) 15.2% 1.3% (0.7%) (0.3%) (0.1%) 10.27% CET1 increased Regulatory P2R add on 3 Other Regulatory 3Q2023 profits dividend accrual CET1 incl. AT1 & T2 Capital Ratio Jun 2023 dividend accrual CE
Slide 50: Risk Weighted Assets – Regulatory Capital
Risk Weighted Assets– Regulatory Capital Risk Weighted Assets by Geography Reconciliation of Group Equity to CET1 30.09.23 € mn 31.12.21 31.12.22 30.06.23 30.09.23 € mn 30.09.23 inc. retained earnings Cyprus 10,595 10,059 10,200 10,208 Shareholder’s equity 2,113 2,113 Overseas 99 55 57 56 Less: Inta
Slide 51: Overall Capital Requirements
Overall Capital Requirements Overall capital requirements for 2023 and 2024 CET1 ratio Total capital ratio 15.63% 15.12% c.0.50% CCyB c.0.04% 10.92% 1.50% c.1.88% O-SII 10.27% c.0.50% CCyB c.0.04%. 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
Slide 52: Buffer to MDA Restrictions Level & Distributable Items
Buffer to MDA Restrictions Level & Distributable Items1 CET1 Ratios 498 bps2 555 bps3 15.2% 15.8% • Significant CET1 MDA buffer as at 30 September 2023: 498 bps2 (€511 mn2) • Including retained earnings for the period ended 30 September 10.3% 10.3% 2023, significant CET1 MDA buffer as at 30 Septembe
Slide 53: Income Statement Bridge for 9M2023
Income Statement Bridge1 for 9M2023 Underlying € mn Other Statutory Basis basis Net interest income 572 - 572 Net fee and commission income 135 - 135 Net foreign exchange gains and net gains/(losses) on financial instruments 29 - 29 Net gains on derecognition of financial assets measured at amortise
Slide 54: Analysis of Interest Income and Interest Expense
Analysis of Interest Income and Interest Expense Analysis of Interest Income (€ mn) 3Q2022 4Q2022 1Q2023 2Q2023 3Q2023 Loans and advances to customers 87 102 113 131 138 Loans and advances to banks and central banks 9 36 57 76 92 Investments and other financial assets at amortised costs 5 11 13 16 2
Slide 55: Income Statement by Business line for 9M2023
Income Statement by Business line for 9M2023 Corporate International International Consumer SME Wealth & € mn and large corporate Business RRD REMU Insurance Treasury Other Total Banking Banking Markets Banking Banking Unit Net interest income/(expense) 272 41 122 23 90 13 14 (27) - 26 (2) 572 Net f
Slide 56: IFRS 17 Implementation
Table of contents Executive Summary – Updated Financial Targets FY2022 Financial Performance Appendix IFRS 17 Implementation 56
Slide 57: Statutory Income Statement for Insurance Businesses for 9M2023
Statutory Income Statement for Insurance Businesses for 9M2023 € mn 9M2023 9M2022 yoy% € mn 9M2023 9M2022 yoy% (IFRS 17) (IFRS 17) Insurance revenue 58.7 58.4 1% Insurance revenue 47.3 43.7 8% Insurance service expense (38.2) (41.2) -7% Insurance service expense (23.2) (22.5) 3% Net insurance servic
Slide 58: Transition to IFRS 17 from IFRS 4
Transition to IFRS 17 from IFRS 4 IFRS 17 is an accounting standard. It does not change the economics of our insurance business For more details on the transition to IFSR 17, please refer to 1Q2023 Group Financial Results presentation (slides 51-54) Overview Balance Sheet and Capital • Accounting ch
Slide 59: Additional Asset Quality Slides
Table of contents Executive Summary – Updated Financial Targets FY2022 Financial Performance Appendix Additional Asset Quality Slides 59
Slide 60: 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 €9.86 bn € bn Housing Other Private 3.81 0.70 4.51 Individuals Hotels & 1.17 Catering Private individuals Private individuals Business Real Estate 1.07 LTV2 Housing Other €5.35 bn €3.81
Slide 61: Gross Loans and NPE Coverage by Customer Type
Gross Loans and NPE Coverage by Customer Type Gross loans by customer type € mn Dec 22 Jun 23 Sep 23 Retail Housing 3,542 3,563 3,547 Retail other 947 984 996 SMEs 1,119 1,067 1,031 International corporate 685 695 744 Corporate & Large 3,924 3,968 3,849 Corporate Total 10,217 10,277 10,167 Corporate
Slide 62: Loans by Economic Activity and Arrears Analysis
Loans by Economic Activity and Arrears Analysis Gross loans (€ mn) Dec 22 Jun 23 Sep 23 Loans arrears analysis Dec 22 Jun 23 Sep 23 (€ mn) Trade 926 917 937 Loans with no arrears 9,788 9,880 9,775 Manufacturing 397 383 365 Hotels & Catering 1,185 1,221 1,185 Loans with arrears but not 18 26 34 NPEs
Slide 63: €13 mn Net Organic NPE Reduction in 3Q2023
€13 mn Net Organic NPE Reduction in 3Q2023 Analysis of total inflows(€ mn) 3Q2022 4Q2022 1Q2023 2Q2023 3Q2023 New inflows 17 7 7 9 9 Redefaults 1 1 2 1 0 Unlikely to pay 2 5 1 1 37 Total inflows 20 13 10 11 46 Analysis of total outflows (€ mn) Curing of restructuring (12) (40) (13) (8) (7) DFAs & DF
Slide 64: 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) 10,217 10,277 10,167 282 288 Dec 22 Jun 23 Sep 23 275 Stage 1 7,970 8,301 8,180 80% 85 84 83 Stage 1 1.1% 1.0% 1.0% 51 46 Stage 2 2.8% 2.9% 3.0% 49 Stage 2 16% 158 1
Slide 65: Stage 2 Exposures Well Collateralised with Low Migration History
Stage 2 Exposures Well Collateralised with Low Migration History € mn 1,629 7.8% Limited historic migration of Stage 2 to Stage 3 Real estate 127 Of which: 3.9% Trade 169 • €456 mn (28%) Performing Forborne • Strong performance of Stage 2 exposures; 98% 3.5% Other 194 • €669 mn (41%) Overlays • €304
Slide 66: Rescheduled Loans
Rescheduled Loans1 Rescheduled loans1 by customer type Fair value of collateral and credit enhancements € bn Dec 21 Dec 22 Jun 23 Sep 23 30 Sep 2023 Loans and advances to customers (€ mn) Retail housing 0.43 0.18 0.16 0.15 Cash 484 Retail other 0.17 0.06 0.04 0.04 Securities 659 SMEs 0.17 0.11 0.06
Slide 67: REMU - the Engine for Dealing with Foreclosed Assets
REMU - the Engine for Dealing with Foreclosed Assets €1.89 bn sales1 of 4,279 properties across all property classes since set-up €111 mn organic sales1 in 9M2023; comfortably above Book Value Sales € mn (contract prices1) Net Proceeds / BV 108% 107% 119% 99% 105% # 99 # 331 # 575 # 579 # 492 # 1,13
Slide 68: REMU - the Engine for Dealing with Foreclosed Assets
REMU - the Engine for Dealing with Foreclosed Assets Properties sold exceed properties acquired since 2019 Evolution of properties managed by REMU Group BV (€ mn) Group BV (€ mn) By type (€ mn) Own properties 1,116 18 1,542 480 Reposessed (855) (101) 54 (18) 983 (18) 983 19 (166) (32) 54 36 36 183 4
Slide 69: Glossary & Definitions
Table of contents Executive Summary – Updated Financial Targets FY2022 Financial Performance Appendix Glossary & Definitions 69
Slide 70: 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 71: Glossary & Definitions
Glossary & Definitions This is the ratio of the number of digital transactions performed by individuals and legal entity customers to the total number of transactions. Transactions include deposits, withdrawals, internal and Digital transactions ratio external transfers. Digital channels include mob
Slide 72: 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 73: Glossary & Definitions
Glossary & Definitions Non-interest income comprises Net fee and commission income, Net foreign exchange gains/(losses) and net gains/(losses) on financial instruments and (excluding net gains on loans and advances Non-interest income to customers at FVPL), Net insurance result, Net gains/(losses) f
Slide 74: 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 75: Glossary & Definitions
Glossary & Definitions Return on Tangible Equity (ROTE) is calculated as Profit/(loss) after tax (attributable to the owners of the Company) (as defined) (annualised - (based on year - to - date days)), divided by the Return on Tangible equity (ROTE) quarterly average of Shareholders’ equity minus i