Bank Of Cyprus Holdings Plc · CSECY:BOCH
Bank Of Cyprus — H1 2023 Earnings Presentation
76 slides from Bank Of Cyprus's earnings presentation, Aug 9, 2023
Slide 1: Bank of Cyprus Group Financial Results
Bank of Cyprus Group Group Financial Results For the six months ended 30 June 2023
Slide 2: Disclaimer
DISCLAIMER The financial information included in this presentation including the interim Condensed Consolidated Forward Looking Statements Financial Statements for the six months ended 30 June 2023 has not been audited by the Group’s external auditors. This document contains certain forward-looking
Slide 3: Table of Contents
Table of Contents Executive Summary – Updated Financial Targets 1. Executive Summary 2. 1H2023 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 and continued recovery in tourism • 42% loan market share; 37% deposit market share • Fiscal discipline, sovereign rated investment grade • #1 Life and #2 N
Slide 5: Maintained Strong Economic Momentum; 1Q2023 GDP Growth Second Fastest in Eurozone
Maintained Strong Economic Momentum; 1Q2023 GDP Growth Second Fastest in Eurozone GDP growth of 3.4% for 1Q2023 Unemployment rate decreased to 6.7% in 1Q2023 Real GDP (yoy % change) Quarterly (%) (seasonally adjusted) 2022: 5.6% 12.8% 2021: 7.5% 2022: 6.8% 14.00% 9.00% 4.4% GDP expected to grow Unem
Slide 6: Our Shareholder Focus; ROTE Guidance Raised
Our Shareholder Focus; ROTE Guidance Raised at Investor Update Event in June 2023 Highly • ROTE of >17% in 2023 & >14% in 2024 Profitable • ROTE of >13% in 2025 or >16% on 15% CET1 ratio in 2025 • Expected to generate 200-250 bps per annum of CET1 pre distributions Highly • Current CET1 ratio at 16%
Slide 7: Strong Performance in 1H2023; Well on Track to Meet 2023 Targets
Strong Performance in 1H2023; Well on Track to Meet 2023 Targets 1H2023 FY2023 targets FY2024 targets (June 2023) (June 2023) Net Interest 358 mn >650 mn >625 mn Income Cost to 32% sub 40% c.40% Income Ratio1 24.0% >14% ROTE >17% (>17% based on 15% CET1 ratio) 3.6% <4% <4% NPE Ratio To normalise tow
Slide 8: 2Q2023 Financial Snapshot
2Q2023 Financial Snapshot Net Interest Income up 21% qoq Improved Cost to Income ratio1 to 29% (€ mn) 196 60% 57% 162 47% 136 39% 34% 89 29% 71 74 1Q2022 2Q2022 3Q2022 4Q2022 1Q2023 2Q2023 1Q2022 2Q2022 3Q2022 4Q2022 1Q2023 2Q2023 Strong ROTE trajectory Growing Tangible book value per share 26.6% 4.
Slide 9: 1H2023 Achievements & Corporate Actions
1H2023 Achievements & Corporate Actions • Held our inaugural investor update event in London, in June 2023 • Updated medium term strategic targets Investor Update Event • Confirming Group’s very strong market position, diversified business model, strong earnings momentum supported by continued benef
Slide 10: Digital Offerings via Digital Channels Enhance Group’s Sales Further
Digital Offerings via Digital Channels Enhance Group’s Sales Further Digital sales 3,375 new customers onboarded e-deposits at €221 mn as at New e-deposits accounts through digital channels since Jan 2022 30 Jun 2023; up 33% yoy up 111% yoy e-deposits (€mn) 2,008 1,601 881 1,279 778 195 212 221 586
Slide 11: Table of Contents
Table of Contents Executive Summary – Updated Financial Targets 1. Executive Summary 2. 1H2023 Financial Performance 3. Capital, Liquidity & Asset Quality 4. ESG update 5. Appendix Appendix 11
Slide 12: 1H2023 Highlights
1H2023– Highlights • Strong economic growth; Cyprus GDP expanded by 3.4%1 in 1Q2023, the second highest in Eurozone; 2023 growth Positive economic expected at c.2.8%1 outlook • New lending stable at €1.1 bn, despite the rising interest rate environment • Gross performing loan book flat qoq and yoy a
Slide 13: Income Statement
Income Statement 1H2023 1H2022 2Q2023 1Q2023 qoq% yoy% QoQ Performance (2Q2023 vs 1Q2023) € mn IFRS 17 • NII up 21% benefitting from rising interest rates and continued low Net Interest Income 358 145 196 162 21% 146% deposit pass-through Non interest income 153 137 81 72 14% 12% • Non-NII up 14% po
Slide 14: NII Growth Accelerated Further in 2Q2023, up 21% qoq to €196 mn
NII Growth Accelerated Further in 2Q2023, up 21% qoq to €196 mn NII of €196 mn, up 21% qoq Effective yield on assets & cost of funding 343 Performing loans Cost of deposits 400 291 +146% Liquid assets 2 Cost of wholesale funding 2 236 yoy NIM bps 153 (bps) 200 133 +21% 358 520 qoq 455 390 0 196 292
Slide 15: Net Interest Income Assumptions and Sensitivities
Net Interest Income Assumptions and Sensitivities FY2023 NII assumptions 2Q2023 1Q2023 assumptions1 • 1 percentage point increase in time deposit pass-through reduces NII by c.€2 mn3 p.a. Average ECB depo rate 3.0% 3.2% 2.3% Time deposit pass up to c.50% 12% 10% • ECB decision to set remuneration of
Slide 16: Highly Liquid Balance Sheet
Highly Liquid Balance Sheet • Cash, balances with Central Banks of €9.1 bn, of which €2.0 bn TLTRO III 30 June 2023 • Immediate benefit from ECB depo rate increases1 (€ bn) 25.71 25.71 • Securities of €3.3 bn (of which €3.2 bn fixed income portfolio) Other assets 1.80 1.25 Other • Fixed income portf
Slide 17: Robust Liquidity Position; Surplus Liquidity of €7.7 bn
Robust Liquidity Position; Surplus Liquidity of €7.7 bn Diversified, mainly Retail funded deposit base Highly liquid balance sheet Group deposits Liquid assets • Sticky deposit base • 59% insured deposits 5% 4% 20% • 61% Retail 21% • Average size of Retail deposits: c.€28k 3% €12.7 bn 56% €19.2 bn 1
Slide 18: Retail Funded Deposit Base up 4% yoy; Loan to Deposit Ratio at 52%
Retail Funded Deposit Base up 4% yoy; Loan to Deposit Ratio at 52% Deposits at €19.2 bn; very gradual mix shift to Time & Notice Resilient deposit pass through2 at 12%; assumed to gradually increase to 50% deposits by June 2024 +4% yoy Time & Notice Savings, Current & Demand Cost of deposits (bps) €
Slide 19: Continued Solid Loan Growth Offset by Repayments
Continued Solid Loan Growth Offset by Repayments New lending of €494 mn in 2Q2023 Gross performing book2 flat at €9.9 bn € mn Gross loans (€ bn) 1,159 1,118 +1% 622 624 9.92 9.92 9.90 9.91 9.80 104 537 64 0.74 0.75 0.69 0.67 0.69 48 489 444 494 31 1 50 297 3.91 3.90 3.83 3.90 3.89 258 238 261 234 21
Slide 20: Fixed Income Portfolio up 16% qoq
Fixed Income Portfolio up 16% qoq Fixed income securities per category - NBV Fixed income securities per issuer type - NBV To increase to c.15% by December % assets1 8% 11% 12% 13% 20242 +16% qoq 3,178 3,178 (€ mn) (€ mn) 144 475 Other financial 2,747 4.48% 2,747 & other corporations 2,500 2,500 135
Slide 21: Non Interest Income at €81 mn for 2Q2023, up 14% qoq
Non Interest Income at €81 mn for 2Q2023, up 14% qoq Total Non – NII (€ mn) QoQ Performance (2Q2023 vs 1Q2023) +12% • Net fee and commission income up 3% mainly due to higher net credit card commissions yoy driven by higher volume of transactions 153 5 • Net insurance result3 up 57% qoq, attributed
Slide 22: Profitable Life Insurance Business
Profitable Life Insurance Business - Valuable and Sustainable Contribution to the Group € mn 1H2023 1H2022 yoy% IFRS 173 9% 6% 27% Net Insurance result 13.6 13.6 0% Contribution Market Contribution to the share2 Other operating costs to non-NII Group’s PAT (0.6) (0.6) 0% (non-attributable) Net reval
Slide 23: Profitable Non-Life Insurance Business
Profitable Non–Life Insurance Business – Valuable and Sustainable Contribution to the Group € mn 1H2023 1H2022 yoy% IFRS 173 7% 6% 14% Contribution Market Net Insurance result 11.0 10.1 9% Contribution to the share2 to non-NII Other operating costs (non- Group’s PAT (1.3) (1.3) -3% attributable) Rev
Slide 24: Leading Card Processing and Payment Solutions Business in Cyprus
Leading Card Processing and Payment Solutions Business in Cyprus € mn 1H2023 1H2022 yoy% 10% 3% 84% Net fee and commission income 13.5 12.2 11% Contribution Market Contribution to the share1 Net other income 1.8 2.4 -28% to non-NII Group’s PAT FX and net gains/(losses) on 0.7 (0.2) - revaluation of
Slide 25: Cost to Income Ratio at 29% in 2Q2023
Cost to Income Ratio1 at 29% in 2Q2023 • Total operating expenses1 down 2% as benefits from FY2022 efficiency actions continue to partly offset wage and inflationary pressures Cost base continues to reflect benefits from efficiency actions (€ mn) • Staff costs up 4% qoq driven mainly by an accrual o
Slide 26: Table of Contents
Table of Contents Executive Summary – Updated Financial Targets 1. Executive Summary 2. 1H2023 Financial Performance 3. Capital, Liquidity & Asset Quality 4. ESG update 5. Appendix Appendix 26
Slide 27: Robust Capital Position with CET1 at 16.0% and Total Capital Ratio at 21.1%
Robust Capital Position with CET1 at 16.0% and Total Capital Ratio at 21.1% min OCR requirement for 2023 1 21.1% 2.9% 16.3% 16.0% 2.2% 15.10% 15.2% 1.2% (0.1%) (0.2%) 0.2% (0.3%) 10.26% CET1 Organic RWAs AT1 Other CET1 Accrued CET1 30 AT1 5 T2 Total 31 Mar 2023 Capital 2 30 Jun 2023 dividend 3,4 Jun
Slide 28: Successful Refinancing of AT1 Capital Securities
Successful Refinancing of AT1 Capital Securities Allocation statistics • Successful refinancing of €220 mn AT1 Capital Securities; orderbook >12x over- subscribed from c.240 institutional investors • First AT1 transaction announced following March 2023 events 2% 8% • Coupon of 11.875% p.a.; 62.5 bps
Slide 29: Already in Compliance with 2025 MREL requirement
Already in Compliance with 2025 MREL requirement • Successful issuance of €350 mn MREL-Eligible Senior Preferred Notes in July 2023 MREL (% of RWAs) • Coupon of 7.375% p.a.; 37.5 basis points tighter than the initial pricing indication • Order book peaked at €950 mn 4.021 CBR1 • MREL ratio (% of RWA
Slide 30: NPE Ratio Decreased to 3.6%; Limited NPE Inflows
NPE Ratio Decreased to 3.6%; Limited NPE Inflows NPE organically reduced by 5% qoq Residual NPEs comprises mainly Retail NPE inflows remain under control 371 1,168 1,018 99 (€ mn) (€ mn) (€mn) -5% 19 20 189 13 411 389 371 10 11 7 491 408 43 129 107 83 40 Jun 22 Sep 22 Dec 22 Mar 23 Jun 23 Jun 23 1Q2
Slide 31: COR of 51 bps for 2Q2023; Resilient Credit Portfolio Quality
COR of 51 bps for 2Q2023; Resilient Credit Portfolio Quality Cost of risk broadly flat yoy at 48 bps Bank’s IFRS 9 macroeconomic assumptions 0.48% 0.43% 0.44% Base line GDP rate Unemployment rate 2023 2.8% 7.0% 2024 2.6% 6.9% 1H2022 FY2022 1H2023 Breakdown of quarterly cost of risk • Cost of risk of
Slide 32: REMU: Asset Disposals Continue Steadily; REMU Stock at €1 bn
REMU: Asset Disposals Continue Steadily; REMU Stock at €1 bn Inflows substantially reduced with completion of de-risking Organic sales1 consistently close to Open Market Value; comfortably (€ mn) 520 above Book Value 428 196 Inflows 146 86 34 2 4 117% 116% 109% 110% 109% 95% 91% 85% 89% 89% Sales -3
Slide 33: Bank of Cyprus of Tomorrow
Bank of Cyprus of Tomorrow Strength Profitability c.19% >13% ROTE CET1 ratio (>16% based on 15% CET1 ratio) Significant surplus capital Shareholder Asset quality distributions 2025 <3% 30-50% NPE ratio Dividend payout ratio1 1) Any recommendation for a dividend is subject to regulatory approval 33
Slide 34: 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 35: Steadily Improving Credit Ratings for BOC
Steadily Improving Credit Ratings for BOC Moody’s upgraded rating to Ba1; outlook positive S&P upgraded rating to BB+; outlook positive A38 A- 8 Baa1 BBB+ 7 Baa2 BBB 7 BBB Baa3 Investment grade BBB- Investment grade 6 Ba1 Ba1 BB+ 6 Ba2 BB 5 Ba3 BB- 5 BB- B1 B+ B24 B 4 B3 B- 3 Caa1 CCC+3 CCC Caa2 BOC
Slide 36: Table of Contents
Table of Contents Executive Summary – Updated Financial Targets 1. Executive Summary 2. 1H2023 Financial Performance 3. Capital, Liquidity & Asset Quality 4. ESG update 5. Appendix Appendix 36
Slide 37: Delivering on our ESG Agenda
Delivering on our ESG Agenda Climate Stability - Target 1: Reduce Scope 1 & Scope 2 GHG Performance against baseline of 2021 emissions by 42% to become Carbon Neutral by 2030 • c.8% reduction in Scope 1 & Scope 2 GHG emissions in FY2022 compared to FY2021 (42%) (8%) (28%) • c.5% reduction in Scope 1
Slide 38: Delivering on our ESG Agenda
Delivering on our ESG Agenda Education - Target 10: Provide upskilling/reskilling employee Culture and Heritage - Target 11: Increase Bank of Cyprus opportunities in line with the digital transformation initiatives to broaden Cultural Foundation (BOCCF) activities and attendees. career opportunities
Slide 39: Delivering on our ESG Agenda
Delivering on our ESG Agenda Climate Stability - Target 2: Increase utilisation of Climate Stability – Target 3: Increase portfolio of renewable energy in own operations. environmentally friendly loans. 119,499 Environmentally friendly products Environmentally friendly FY2022 1H2023 79,424 +50% prod
Slide 40: Delivering on our ESG Agenda
Delivering on our ESG Agenda Financial Inclusion and Resilience - Target 6: Health and Safety - Target 7: Contribute and support Continue supporting start-ups under IDEA1 Innovation Centre cancer patients and their families through the Bank of Cyprus Oncology Centre IDEA Innovation Centre (since inc
Slide 41: 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) 437 87% 395 343 2 2 Jun 211 Jun 22 1 Jun 23 Jun 21 Jun 22 Jun 23 Ov
Slide 42: Macroeconomic overview
Table of contents Executive Summary – Updated Financial Targets FY2022 Financial Performance Appendix Macroeconomic overview 42
Slide 43: 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 31 March 2023 Public debt expected to decrease to c.60%1 by end- 9% 9% Wholesale & Retail trade Real Estate 16
Slide 44: 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 18 Tertiary 43% 1 13 13 13 Wages per capita 11 #3 country in Europe on 7 number of university graduates per capita
Slide 45: 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 46: Limited Economic Effects on BOCH from Russia-Ukraine War
Limited Economic Effects on BOCH from Russia-Ukraine War Direct Impact Actions taken by the Bank to address legacy shortcomings • No banking operations in Ukraine/Russia since 2015; <€1 mn net legacy exposure • Since 2014, the Bank has engaged in a very demanding and rigorous anti- as at 30 June 202
Slide 47: Additional financial information
Table of contents Executive Summary – Updated Financial Targets FY2022 Financial Performance Appendix Additional financial information 47
Slide 48: Analysis of Deposits
Analysis of Deposits Deposits by Currency (€ bn) Deposits by Customer Sector (€ bn) Currency Jun 22 Dec 22 Mar 23 Jun 23 Sector Jun 22 Dec 22 Mar 23 Jun 23 EUR 16.53 17.07 17.04 17.30 Retail 11.45 11.35 11.45 11.68 USD 1.52 1.53 1.52 1.47 SME 0.91 1.01 0.93 0.97 GBP 0.32 0.33 0.34 0.33 International
Slide 49: Income Statement
Income Statement 1H2022 € mn 1H2023 2Q2023 1Q2023 qoq% yoy% IFRS 17 Net Interest Income 358 145 196 162 21% 146% Net fee and commission income 90 94 46 44 3% -4% Net foreign exchange gains and net gains/(losses) on financial instruments 21 3 8 13 -35% - Net insurance result 25 24 15 10 57% 4% Net ga
Slide 50: Consolidated Balance Sheet
Consolidated Balance Sheet 31.12.2022 % 31.12.2022 % Assets (€ mn) 30.06.2023 IFRS 17 change Liability and Equity (€ mn) 30.06.2023 IFRS 17 change Cash and balances with central banks 9,127 9,567 -5% Deposits by banks 449 508 -12% Loans and advances to banks 432 205 111% Funding from central banks 2
Slide 51: Risk Weighted Assets – Regulatory Capital
Risk Weighted Assets– Regulatory Capital Risk Weighted Assets by Geography Reconciliation of Group Equity to CET1 € mn 30.06.23 € mn 31.12.21 31.12.22 31.03.23 30.06.23 Shareholder’s equity 1,984 Cyprus 10,595 10,059 10,108 10,200 Less: Intangibles (27) Overseas 99 55 56 57 Less: Deconsolidation of
Slide 52: Overall Capital Requirements
Overall Capital Requirements Overall capital requirements for 2022 and 2023 CET1 ratio Total capital ratio 15.03% 15.10% 0.02% 0.02% CCyB 1.25% 1.50% 10.10% 10.26% c.0.02% O-SII CCyB 0.02% 2.50% 2.50% 1.25% 1.50% CCB O-SII CCB 2.50% 2.50% Pillar 2R 3.26% 3.08% Pillar 2R 1.83% 1.73% Tier 2 2.00% 2.00
Slide 53: Buffer to MDA Restrictions Level & Distributable Items
Buffer to MDA Restrictions Level & Distributable Items1 CET1 Ratios 572 bps3 16.0% • Significant CET1 MDA buffer as at 30 June 2023: 572 bps3 (€587 mn3) • Distributable items of €939 mn for BOCH as at 30 June 2023 • BOCH fully utilises its AT1 and Tier 2 buckets as at 30 June 2023 10.3% • No prohibi
Slide 54: Income Statement Bridge for 1H2023
Income Statement Bridge1 for 1H2023 Underlying € mn Other Statutory Basis basis Net interest income 358 - 358 Net fee and commission income 90 - 90 Net foreign exchange gains and net gains on financial instruments 21 - 21 Net gains on derecognition of financial assets measured at amortised cost - 6
Slide 55: Analysis of Interest Income and Interest Expense
Analysis of Interest Income and Interest Expense Analysis of Interest Income (€ mn) 1Q2022 2Q2022 3Q2022 4Q2022 1Q2023 2Q2023 Loans and advances to customers 77 81 87 102 113 131 Loans and advances to banks and central banks 7 7 9 36 57 76 Investments and other financial assets at amortised costs 4
Slide 56: Income Statement by Business line for 1H2023
Income Statement by Business line for 1H2023 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) 168 26 78 14 57 8 9 (20) - 19 (1) 358 Net fee
Slide 57: IFRS 17 Implementation
Table of contents Executive Summary – Updated Financial Targets FY2022 Financial Performance Appendix IFRS 17 Implementation 57
Slide 58: Statutory Income Statement for Insurance Businesses for 1H2023
Statutory Income Statement for Insurance Businesses for 1H2023 € mn 1H2023 1H2022 yoy% € mn 1H2023 1H2022 yoy% (IFSR 17) (IFRS 17) Insurance revenue 38.4 39.1 -2% Insurance revenue 31.1 28.4 10% Insurance service expense (25.5) (25.6) -1% Insurance service expense (14.9) (14.7) 2% Net insurance serv
Slide 59: 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 60: Additional Asset Quality Slides
Table of contents Executive Summary – Updated Financial Targets FY2022 Financial Performance Appendix Additional Asset Quality Slides 60
Slide 61: 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 €9.91 bn € bn Housing Other Private 3.81 0.68 4.49 Individuals Hotels & 1.20 Catering Private individuals Private individuals Business Real Estate 1.08 LTV2 Housing Other €5.42 bn €3.81
Slide 62: Gross Loans and NPE Coverage by Customer Type
Gross Loans and NPE Coverage by Customer Type Gross loans by customer type € mn Dec 22 Mar 23 Jun 23 Retail other 947 974 984 Retail Housing 3,542 3,559 3,563 SMEs 1,119 1,096 1,067 International corporate 685 668 695 Corporate & Large Corporate 3,924 3,981 3,968 Total 10,217 10,278 10,277 Corporate
Slide 63: Loans by Economic Activity and Arrears Analysis
Loans by Economic Activity and Arrears Analysis Gross loans (€ mn) Dec 22 Mar 23 Jun 23 Loans arrears analysis (€ mn) Dec 22 Mar 23 Jun 23 Trade 926 924 917 Loans with no arrears 9,788 9,860 9,880 Manufacturing 397 393 383 Loans with arrears but not NPEs 18 29 26 Hotels & Catering 1,185 1,222 1,221
Slide 64: €18 mn Net Organic NPE Reduction in 2Q2023
€18 mn Net Organic NPE Reduction in 2Q2023 Net organic -74 -133 -57 -22 -18 outflows (€ mn) Total Inflows (€ mn) 19 20 New inflows 5 13 Redefaults 1 10 11 17 7 Unlikely to pay 13 1 7 9 2 1 5 2 1 1 1 2Q2022 3Q2022 4Q2022 1Q2023 2Q2023 Total Outflows (€ mn) Curing of restructuring -11 -12 -13 -8 -2 -1
Slide 65: 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 10,278 10,277 282 282 288 Dec 22 Mar 23 Jun 23 Stage 1 7,970 8,075 8,301 86% 84 85 80 Stage 1 1.1% 1.0% 1.0% 51 49 46 Stage 2 2.8% 2.7% 2.9% Stage 2 16% 153 1
Slide 66: Stage 2 Exposures Well Collateralised with Low Migration History
Stage 2 Exposures Well Collateralised with Low Migration History € mn 1,605 4.0% Limited historic migration of Stage 2 to Stage 3 Trade 121 Real estate 146 Of which: 8.0% • €529 mn (33%) Performing Forborne • Strong performance of Stage 2 exposures; 99% 3.1% Other 196 • €639 mn (40%) Overlays • €287
Slide 67: Rescheduled Loans
Rescheduled Loans1 Rescheduled loans1 by customer type Fair value of collateral and credit enhancements € bn Dec 21 Dec 22 Mar 23 Jun 23 30 June 2023 Loans and advances to customers (€ mn) Retail housing 0.43 0.18 0.17 0.16 Cash 505 Retail other 0.17 0.06 0.05 0.04 Securities 579 SMEs 0.17 0.11 0.08
Slide 68: REMU - the Engine for Dealing with Foreclosed Assets
REMU - the Engine for Dealing with Foreclosed Assets €1.85 bn sales of 4,153 properties across all property classes since set-up €78 mn organic sales1 in 1H2023; comfortably above Book Value Sales € mn (contract prices1) # 99 # 331 # 575 # 579 # 492 # 1,130 # 674 # 139 # 134 Net Proceeds / BV 109% 1
Slide 69: 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) 1,116 6 1,542 468 (71) (825) (18) 1,010 (23) 1,010 (18) (157) 1,010 55 57 189 22 225 462 1 Jan 2019 Additions Sales Trans
Slide 70: Glossary & Definitions
Table of contents Executive Summary – Updated Financial Targets FY2022 Financial Performance Appendix Glossary & Definitions 70
Slide 71: 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 72: Glossary & Definitions
Glossary & Definitions DFEs Debt for Equity Swaps. This is the ratio of digitally engaged individual customers to the total number of individual customers. Digitally engaged customers are the individuals who use the digital channels of the Bank (mobile Digitally engaged customers ratio banking app,
Slide 73: Glossary & Definitions
Glossary & Definitions IB, W&M International Banking, Wealth and Markets. IBU Servicing exclusively international activity companies registered in Cyprus and abroad and not residents. The sensitivity is calculated assuming a constant balance sheet. Impact of parallel shifts in interest curves This s
Slide 74: Glossary & Definitions
Glossary & Definitions New lending includes the disbursed amounts of the new and existing non-revolving facilities (excluding forborne or re-negotiated accounts) as well as the average year-to-date change (if positive) of New lending the current accounts and overdraft facilities between the balance
Slide 75: 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 76: 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
Bank of Cyprus Holdings — H1 2023 Earnings Presentation on 6ix