Bank of Cyprus Holdings PLC · CSECY:BOCH
Bank of Cyprus — FY2012 Earnings Presentation
44 slides from Bank of Cyprus's earnings presentation, Oct 10, 2013
Slide 1: Bank of Cyprus Group Financial Results for the year ended 31 December 2012
Bank of Cyprus Group Financial Results for the year ended 31 December 2012 Financial Results 2012 – Highlights Income Statement Review Balance Sheet Review Performance by Geographical Market Events after 31 December 2012 Appendices 10 October 2013 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 2012 - Highlights II. Income Statement Review III. Balance Sheet Review IV. Performance by Geographical Market V. Events after 31 December 2012 VI. Appendices 3
Slide 4: Financial Results 2012 - Highlights
Financial Results 2012- Highlights Financial Results 2012 – Highlights Income Statement Review Balance Sheet Review Performance by Geographical Market Events after 31 December 2012 Appendices 4
Slide 5: FY12 Financial Highlights
FY12 Financial Highlights • Net interest income at €1.011mn (-13% yoy) due to the decrease in interest spread as a result of the increase in impaired loans and the cost of deposits Income • Profit before impairments and restructuring costs €620 mn (-22% yoy) Statement • Provisions for impairment of
Slide 6: Income Statement Review
Income Statement Review Financial Results 2012 – Highlights Income Statement Review Balance Sheet Review Performance by Geographical Market Events after 31 December 2012 Appendices 6
Slide 7: Profit and Loss highlights
Group Profit and Loss highlights Amounts in € mn FY12 FY11 Change Total Income 1.357 1.541 -12% Profit before impairments and restructuring costs 620 797 -22% Provisions for impairment of loans and advances (2.306) (426) +441% Restructuring costs (21) -- -- Impairment of GGBs, change in fair value o
Slide 8: Analysis of income
Group Analysis of income Profit & Loss highlights (€ mn) FY09 FY10 FY11 FY12 -12% 1.541 -13% 1.450 1.286 1.357 1.168 1.014 1.011 -22% 848 797 725 612 620 CAGR 7% CAGR 2% CAGR 0% Net Interest Income Operating income Profit before impairments and restructuring costs • FY12 Net interest income reductio
Slide 9: Interest Margins and Net Interest Income
Group Interest Margins and Net Interest Income Group Net Interest Margin (bp) Quarterly Net Interest Income (€ mn) 334 331 311 299 291 277 278 302 313 295 260 264 265 272 255 271 273 276 277 263 251 242 255 202 FY11: 298 FY12: 299 1Q11 2Q11 3Q11 4Q11 1Q10 2Q10 3Q10 4Q10 1Q12 2Q12 3Q12 4Q12 1Q11 2Q11
Slide 10: Analysis of expenses
Group Analysis of expenses Profit & Loss highlights (€ mn) FY09 FY10 FY11 FY12 -1% 725 744 737 674 -8% +9% 413 430 432 397 312 340 260 295 CAGR 3% CAGR -1% CAGR 9% Staff costs Other operating expenses Total expenses • FY12 Staff costs reduced as a result of the lower employee retirement benefit cost
Slide 11: Balance Sheet Review
Balance Sheet Review Financial Results 2012 – Highlights Income Statement Review Balance Sheet Review Performance by Geographical Market Events after 31 December 2012 Appendices 11
Slide 12: Funding Structure
Group Funding Structure Net Loans % Customer deposits Customer deposits % Total Assets 92% 79% 76% 76% 77% 92% 93% 94% 93% 86% 31.12.11 31.03.12 30.06.12 30.09.12 31.12.12 31.12.11 31.03.12 30.06.12 30.09.12 31.12.12 Eurosystem funding • Net Loans/Deposits ratio at 86% • Primarily deposit funded: 92
Slide 13: Gross loans and deposits
Group Gross loans and deposits Gross loans and deposits (€ bn) FY09 FY10 FY11 FY12 -3% -4% 33,0 28,9 28,9 28,6 29,7 28,4 28,1 26,5 CAGR 0% CAGR 2% Gross Loans Customer Deposits • Balanced expansion always a priority for the Group • Adverse economic conditions in 2011 and 2012 affected growth of loan
Slide 14: Analysis of Gross Loans
Group Analysis of Gross Loans Loans by geography 28,9 28,8 28,5 28,2 28,1 Total 2,0 1,9 1,8 1,7 1,7 (€ bn) Other countries 2,0 2,1 2,1 2,0 2,1 Russia 10,0 9,8 9,7 9,5 9,5 Greece Cyprus 14,9 15,0 14,9 14,9 14,9 31.12.11 31.03.12 30.06.12 30.09.12 31.12.12 Loans by sector 28,9 28,8 28,5 28,2 28,1 Tota
Slide 15: Analysis of Customer Deposits
Group Analysis of Customer Deposits Deposits by geography 29,7 29,2 28,4 28,2 27,9 1,5 1,4 Total Other countries 1,5 1,6 1,4 1,3 1,3 1,3 1,3 1,3 (€ bn) Russia 7,7 7,2 6,3 6,5 7,2 Greece 8,0 7,8 7,3 7,2 7,8 Cyprus - IBU 11,2 11,5 11,8 11,3 10,7 Cyprus - Non-IBU 31.12.11 31.03.12 30.06.12 30.09.12 31.
Slide 16: Loan quality
Group Loan quality Non-performing loans by Geography 6.660 Other Russia • Group Non-performing loans (NPLs Greece Cyprus 231 364 defined as loans in arrears for longer 4.818 than 90 days which are not fully covered 4.049 184 2.466 3.424 307 by tangible collateral) increased by €3,7 240 2.952 144 229
Slide 17: Loan quality
Group Loan quality NPLs ratio in main markets Cyprus Greece Russia Group 23,7% 17,1% • NPLs ratio in Cyprus at 24,2% and 14,2% in Greece at 26,1% 11,9% 10,2% 24,2% 26,1% 11,6% 11,4% 11,5% 13,4% 11,8% 12,8% 17,3% 12,7% 15,8% 20,9% 14,8% 18,0% • 9,5% Loans in arrears > 90 Days: Impaired loans (loans w
Slide 18: Provisions for impairment of loans
Group Provisions for impairment of loans Accumulated provisions (€ mn) • The increase in provisions reflects the sharp increase in non- 3.676 performing loans • The Bank in its provisioning 2.249 2.028 assessment took into consideration 1.505 1.589 the further expected decline in collateral values f
Slide 19: Capital position
Group Capital position Capital adequacy ratios 8,9% 9,2% 7,6% 7,5% 7,8% 6,8% 7,3% 7,6% 7,3% Core Tier 1 ratio 5,1% 5,0% 3,6% Tier 1 ratio 0,6% 0,9% Total Capital ratio -1,9% 31.12.11 31.03.12 30.06.12 30.09.12 31.12.12 Evolution of RWAs (€ bn) • Core Tier 1 capital ratio at -1,9%, Tier 1 capital 25,
Slide 20: Capital position
Group Capital position (€ mn) 31.12.11 30.09.12 31.12.12 • At 31 December 2012 the Group had a Core Tier 1 capital ratio of -1,9%, Tier 1 capital ratio of 0,6% Shareholders’ equity 2.258 2.228 258 and Total capital of 0,9% Core Tier I capital 892 1.187 -407 • Minimum capital requirements set by the
Slide 21: Performance by Geographical Market
Performance by Geographical Market Financial Results 2012 – Highlights Income Statement Review Balance Sheet Review Performance by Geographical Market Events after 31 December 2012 Appendices 21
Slide 22: Financial performance in Cyprus
Cyprus Financial performance in Cyprus Profit & Loss Highlights (€ mn) Cyprus NII (€ mn), NIM and Spread (bp) FY11 FY12 NII NIM Customer Spread -15% -36% 350 358 357 +803% 1.186 325 326 331 314 325 337 330 313 299 609 514 487 309 320 132 256 271 248 210 213 210 213 219 223 200 161 165 157 182 171 13
Slide 23: Loans market position
Cyprus Loans market position Gross Loans (bn) Corporate SMEs Mortgage Consumer Credit 14,9 14,9 14,9 14,9 0% yoy 1,9 1,9 1,8 1,8 -8% yoy 3,5 3,5 3,8 3,7 +7% yoy 2,5 2,5 2,3 2,3 -10% yoy 7,0 7,0 7,0 7,1 +2% yoy 31.12.11 30.06.12 30.09.12 31.12.12 Loans market share (%) 31.12.10 31.12.11 31.12.12 24,3
Slide 24: Deposits market position
Cyprus Deposits market position Deposits (€ bn) IBUs Non-IBUs 19,6 19,0 20,2 19,6 19,2 19,2 19,1 18,5 18,5 14,7 -3% yoy 9,8 10,2 10,8 11,2 11,2 11,4 11,8 11,3 10,7 7,9 -4% yoy 9,9 8,9 9,4 8,4 8,0 7,8 7,8 6,8 7,3 7,2 -3% yoy 31.12.09 31.12.10 31.03.11 30.06.11 30.09.11 31.12.11 31.03.12 30.06.12 30.0
Slide 25: Financial Performance in Greece
Greece Financial Performance in Greece Profit & Loss Highlights (€mn) Greece NII (€mn), NIM and Spread (bp) FY11 NII NIM Customer Spread +345% FY12 320 320 340 302 302 291 289 305 314 308 -7% 967 337 +9% 302 317 243 275 281 332 310 256 258 204 223 217 239 248 224 214 219 222 -19 77 77 80 79 79 85 89
Slide 26: Loans and Deposits in Greece
Greece Loans and Deposits in Greece Gross Loans (€ bn) Corporate SMEs Mortgage Consumer Credit 10,0 9,7 -5% yoy • Active efforts to reduce the loan book 9,5 9,5 1,3 1,2 1,2 +24% yoy 1,7 • During 1H-2012 deposits decreased 1,7 1,7 1,6 1,6 -4% yoy by 18% due to the political uncertainty 3,6 3,4 3,4 2,
Slide 27: Russian operations
Russia Russian operations Profit & Loss Highlights (€ mn) Russia NII (€ mn) & NIM (bp) Net Interest Income Net Interest Margin -7% FY11 FY12 130 598 630 631 619 120 559 570 595 578 544 +63% 505 510 514 -22% 89 58 55 32 34 33 32 33 46 30 31 31 31 30 28 24 3 -35 1Q11 2Q11 3Q11 4Q11 1Q10 2Q10 3Q10 4Q10
Slide 28: Russian operations
Russia Russian operations Gross Loans (€ bn) Customer Deposits (€ bn) 1,29 1,35 1,25 1,28 1,25 2,09 2,09 2,08 1,12 2,00 2,02 1,89 31.12.10 31.12.11 31.03.12 30.06.12 30.09.12 31.12.12 31.12.10 31.12.11 31.03.12 30.06.12 30.09.12 31.12.12 Loan diversification Consumer • Focus on SME and consumer cred
Slide 29: Operations in Romania and Ukraine
Romania - Ukraine Operations in Romania and Ukraine Profit and Loss Highlights Romania Profit and Loss Highlights Ukraine (€ mn) (€ mn) FY11 FY12 FY11 FY12 24,3 40,0 22,4 23,3 19,8 16,1 17,5 14,2 8,5 5,9 10,5 11,9 6,9 -22,3 3,2 2,6 Net Interest Profit before Provisions Profit after Net Interest Prof
Slide 30: Operations in United Kingdom
Operations in United Kingdom Profit and Loss Highlights UK (€ mn) FY11 FY12 • The banking business of UK branch (Bank of Cyprus UK) was transferred to a banking 28,6 22,4 subsidiary (Bank of Cyprus UK Limited) 12,7 12,4 effective on 25 June 2012 9,0 6,6 5,0 • Bank of Cyprus UK Limited is a UK-based
Slide 31: Events after 31 December 2012
Events after 31 December 2012 Financial Results 2012 – Highlights Income Statement Review Balance Sheet Review Performance by Geographical Market Events after 31 December 2012 Appendices 31
Slide 32: Timeline of events after 31 December 2012
Timeline of events after 31 December 2012 16-Mar-2013: 1st Eurogroup Statement on Cyprus 22-Mar-2013: Parliament approved Resolution of Credit and Other Institutions Law 2013 25-Mar-2013: 2nd Eurogroup Statement on Cyprus, calling for Bank of Cyprus (BOC) recapitalisation through a bail-in of
Slide 33: Recapitalisation through Bail-in
Recapitalisation* through Bail-in Shareholder’s structure following • On 25 March 2013 the Cypriot government and recapitalisation the Eurogroup reached an agreement on a financial assistance facility of up to €10 bn to be granted to Cyprus, and a Memorandum of Conversion of Deposits 81% Shares and
Slide 34: Disposals & Acquisitions as per Resolution Authority Decrees
Disposals & Acquisitions as per Resolutions’ Authority Decrees Disposal of Greek operations Relevant Decrees* issued by the Central Bank of Cyprus in its capacity as Resolution Authority Net Assets Disposed € mn relate to: Loans and advances to customers 7,770 • Disposal of Greek operations to Pirae
Slide 35: Restructuring
Restructuring Initial Restructuring actions aimed at the Restructuring Plan to be submitted for stabilitisation and the continuing viability approval in October 2013 will chart the future of the Bank, the quick absorption of the strategic direction of the Group Laiki operations and the improvement o
Slide 36: Key information and contact details
Key information and contact details Credit Ratings: Fitch: Restricted Default (from 26 March 2013) Moody’s : Ca / NP / E (from 22 March 2013) Listing: ATHEX – BOC CSE – BOCY ISIN CY0000100111 From 19 March 2013, the shares have been suspended from trading on ATHEX and CSE Contacts Investor Relations
Slide 37: Appendices
Appendices Financial Results 2012 – Highlights Income Statement Review Balance Sheet Review Performance by Geographical Market Events after 31 December 2012 Appendices 37
Slide 38: Profit and Loss
Group Profit and Loss (€ mn) FY12 FY11 yoy % 4Q12 4Q12v3Q12 % Net interest income 1.011 1.168 -13% 202 -19% Net fee & commission income 219 232 -6% 52 -5% FX income and net gains from financial instruments 83 49 +70% 91 +859% Insurance income net of insurance claims 63 61 +3% 15 -4% Other (expenses)
Slide 39: Balance Sheet Overview
Group Balance Sheet Overview € mn % yoy 31.12.12 31.12.11** € mn % yoy 31.12.12 31.12.11** Cash and balances with Amounts due to banks and -7% 1.272 1.375 -75% 949 3.852 central banks repurchase agreements Placements with banks Customer deposits -4% 28.442 29.654 and reverse repurchase -38% 1.769 2.
Slide 40: Loans and Deposits by Geography
Group Loans and Deposits by Geography Gross Loans by Geography Deposits by Geography 31.12.11 31.12.12 As % of YoY 31.12.11 31.12.12 As % of YoY (€ mn) (€ mn) total (%) (€ mn) (€ mn) total (%) Cyprus 14.931 14.873 53% -0% Cyprus 19.166 18.512 65% -3% Greece 9.983 9.438 34% -5% Greece 7.699 7.152 25%
Slide 41: Cyprus: Summary profit & loss and key indicators
Cyprus: Summary profit & loss and key indicators Excluding the impairment of GGBs, the change in fair value of related hedging instruments, the related taxation and restructuring costs (€ mn) FY12 FY11 yoy (%) 4Q12 4Q12 versus 3Q12 (%) Net interest income 514 609 -15% 103 -15% Net fee & commission i
Slide 42: Greece: Summary profit & loss and key indicators
Greece: Summary profit & loss and key indicators Excluding the impairment of GGBs, the change in fair value of related hedging instruments, the related taxation and restructuring costs (€ mn) FY12 FY11 yoy (%) 4Q12 4Q12 versus 3Q12 (%) Net interest income 310 332 -7% 56 -33% Net fee & commission inc
Slide 43: Russia: Summary profit & loss and key indicators
Russia: Summary profit & loss and key indicators (€ mn) FY12 FY11 yoy (%) 4Q12 4Q12 versus 3Q12 (%) Net interest income 120 130 -7% 30 -3% Net fee & commission income 33 34 -4% 9 +7% Foreign exchange gains 6 8 -26% 1 -71% Other income 1 7 -88% (0) -150% Total income 160 179 -11% 40 -6% Staff costs (
Slide 44: Other countries: Summary profit & loss and key indicators
Other countries: Summary profit & loss and key indicators (€ mn) FY12 FY11 yoy (%) 4Q12 4Q12 versus 3Q12 (%) Net interest income 67 97 -32% 14 -13% Net fee & commission income 7 11 -39% 2 -21% Foreign exchange income and gains from financial 4 1 +237% 1 +274% instruments Other income 11 3 +285% 11 -