Bank Of Cyprus Holdings Plc · CSECY:BOCH
Bank Of Cyprus — FY2021 Earnings Presentation
87 slides from Bank Of Cyprus's earnings presentation, Feb 21, 2022
Slide 1: Preliminary Group Financial Results for year ended 31 December 2021
Bank of Cyprus Group Preliminary Group Financial Results For the year ended 31 December 2021
Slide 2: Disclaimer
DISCLAIMER The financial information included in this presentation is neither reviewed nor audited by the Group’s metrics. Except in relation to any non-IFRS measure, the financial information contained in the Investor external auditors. Presentation has been prepared in accordance with the Group’s
Slide 3: Table of Contents
Table of Contents • Preliminary FY2021 Financial Results • Updated Medium-term Strategic Targets • Appendix 3
Slide 4: Preliminary FY2021 Financial Results
Preliminary FY2021 Financial Results 4
Slide 5: 2021 Achievements and Medium Term Strategy
2021 Achievements and Medium Term Strategy Positive Net Result ✓ • Profit after tax and before non-recurring items of €91 mn • Profit after tax of €30 mn Careful Cost Management ✓ • Total operating expenses1 of €347 mn broadly flat yoy • C/I ratio at 60%1 flat yoy Strong Capital and Initiation of MR
Slide 6: 4Q2021 - Highlights
4Q2021 - Highlights • 6.0%1 GDP in 4Q2021 well above the eurozone average of 4.6% Strong Recovery €1.8 bn • New lending of €471 mn in 4Q2021 totalling €1.8 bn for FY2021, up 33% yoy, recovering towards Continues New Lending pre-pandemic levels • Total income of €154 mn for 4Q2021, up 11% qoq driven
Slide 7: Significant recovery of Cyprus economy in 2021 with solid growth outlook
Significant recovery of Cyprus economy in 2021 with solid growth outlook A diversifying services-based economy Structure of economy 2020 (current prices % of GVA Tertiary sector 83% • Open, small and dynamic economy which has demonstrated 12% 15% historically that it can quickly recover from economi
Slide 8: New lending of €1.8 bn in FY2021, approaching 2019 levels
New lending of €1.8 bn in FY2021, approaching 2019 levels New lending up 33% yoy New lending remained strong in 4Q2021 € mn 487 471 +33% 451 32 2,045 427 38 37 407 356 1,792 374 49 31 150 7 1,351 288 233 215 206 162 71 238 9 174 188 912 798 18 117 596 63 42 45 189 62 99 33 39 211 24 144 124 79 25 11
Slide 9: Strong performance of moratorium portfolio continues
Strong performance of moratorium portfolio continues > 12 months after deferral expiry Private Individuals Businesses 4% 2% 13% 2% 8% 19% Resumed payments as per original schedule €4.60 €1.71 €2.89 Restructured bn bn bn In arrears 83% 90% 79% 96% no arrears 92% no arrears 98% no arrears • 96% of per
Slide 10: Portfolio exposure to businesses most impacted by COVID-19
Portfolio exposure to businesses most impacted by COVID-19 Tourism: €1.15 bn Trade: €0.94 bn 30 Sep 2021 31 Dec 2021 % of 30 Sep 2021 31 Dec 2021 % of Hotels & Catering Trade € bn € bn portfolio € bn € bn portfolio Food services 0.06 0.06 5% Supermarkets, pharmacies and 0.26 0.27 29% other essential
Slide 11: Profitability
Profitability 11
Slide 12: Income Statement
Income Statement • NII for 4Q2021 increased to €73 mn mainly due to higher € mn FY2021 FY2020 4Q2021 3Q2021 qoq% yoy% volume of loans and interest collections; NII for FY2021 Net Interest Income 296 330 73 71 2% -10% reduced to €296 mn impacted mainly by the low interest rate Non interest income 285
Slide 13: Drivers of NIM
Drivers of NIM NII of €296 mn for FY2021 Effective yield on assets & cost of funding NII (€ mn) 344 330 296 76 76 71 73 NIM (bps) 163 149 134 134 429 Liquids 21 381 NPE trades 57 12 340 4 5 34 Non-Legacy Legacy Liquids Cost of funding Legacy 49 19 86 86 43 25 83 85 66000% 563 200.00 28 3 4 497 463 2
Slide 14: Balance sheet composition
Balance sheet composition Total assets Total equity & liabilities € bn € bn 24.55 24.96 24.55 24.96 2.28 1.30 1.28 Other 2.36 21.51 1.21 21.51 2.09 2.08 Equity Other assets 1.26 0.44 0.64 (including HFS) 2.21 0.48 1.25 0.65 Wholesale AIEA Mix 2.07 2.98 2.97 Funding from REMU properties 1.46 4Q2021 0
Slide 15: Deposits at €17.5 bn up 2% qoq; significant liquidity surplus of €6.4 bn
Deposits at €17.5 bn up 2% qoq; significant liquidity surplus of €6.4 bn Cyprus deposits by passport origin2 € bn 3% 17.13 17.53 17.53 16.69 16.53 4% 6% 1 IBU 3.50 19% Corporate 2.09 68% Deposits Retail 11.06 SME 0.88 Cyprus Other countries Dec 19 Dec 20 Sep 21 Dec 21 Dec 21 Other EU Other European
Slide 16: Non interest income at €81 mn in 4Q2021
Non interest income at €81 mn in 4Q2021 Non-NII % of Total 47% 42% 49% 44% 50% 49% 53% • Non interest income of €81 mn for 4Q2021, up Income 20% qoq, reflecting mainly higher net insurance F&C % of Total Income 23% 26% 30% 28% 30% 32% 28% income and increased revaluation gains from financial instrum
Slide 17: Profitable Insurance business - sustainable healthy profitability in FY2021
Profitable Insurance business- sustainable healthy profitability in FY2021 € mn FY2021 FY2020 yoy% € mn FY2021 FY2020 yoy% GWP2 137.1 127.4 8% Insurance income 60.7 56.3 8% Net reinsurance cost (18.2) (18.8) -4% Net impact of interest rate (2.6) (2.1) 28% (of which GWP2) 53.3 49.3 8% movements Costs
Slide 18: Total Operating Expenses at €87 mn
Total Operating Expenses at €87 mn Total operating expenses1 of €87 mn for 4Q2021 and €347 mn for FY2021 Cost to income ratio1 at 60% for FY2021 (€ mn) 64% 64% 64% 61% 385 60% 347 58% 340 (€ mn) 57% 165 59% 60% 60% 145 145 91 89 89 87 82 41 32 38 38 37 220 195 202 50 50 51 51 50 4Q2020 1Q2021 2Q2021
Slide 19: Leverage leading Digital Capabilities to serve customers and the economy
Leverage leading Digital Capabilities to serve customers and the economy Vision Digital Transactions ratio Jan 20191 Jan 20211 Jan 2022 Leverage Be the driver of Serve customer 70.7% 86.2% 89.4% technology to digital economy, needs anywhere sustain a in support of and at any time, competitive nation
Slide 20: Capital & Asset Quality
Capital & Asset Quality 20
Slide 21: Pro forma for Held For Sale, CET1 at 15.8% and Total Capital ratio at 20.8%
Pro forma for Held For Sale, CET1 at 15.8% 1 and Total Capital ratio at 20.8%1 Capital position min OCR (SREP) requirement for 20213 1 January 2022 20.8% 2.9% 14.8% 15.8% 2.1% 14.7% 15.1% 15.1% 0.5% (0.3%) 0.3% (0.1%) 0.7% 14.5% 10.1% 9.7% CET1 31 CET1 Operating Provisions and RWAs Other CET1 Held f
Slide 22: Interim MREL requirement of 1 January 2022 achieved
Interim MREL requirement of 1 January 2022 achieved MREL (% of RWAs) 23.74% as at 31 Dec 2025 • MREL ratio as % of RWAs at 20.18%1 and 19.30%1 as at 31 Dec 2021 and 1 Jan 20.18% 2022 both pro forma for HFS Interim requirement 14.94% as at 1 Jan 2022 • MREL ratio as % of Leverage Ratio Exposure (LRE)
Slide 23: 75% NPE reduction in FY2021 reducing the NPE ratio to 7.5%
75% NPE reduction in FY2021 reducing the NPE ratio to 7.5% 1.4 €2.3 bn NPE reduction in 2021 • Helix 3 (€0.6 bn) Residual NPEs comprises mainly Retail • Helix 2 (€1.3 bn) 1.2 (€ bn) • Organic reduction (€0.4 bn) 1.0 3.9 -75% 0.8 0.8 3.1 3.0 Re-performing NPEs 1 0.1 0.6 Retail 1.4 0.4 1.3 0.4 SME 1.8
Slide 24: €400 mn net organic NPE reduction in FY2021
€400 mn net organic NPE reduction in FY2021 Net organic -59 -112 -131 -98 outflows (€ mn) Inflows (€ mn) 16 17 14 New inflows 8 11 13 6 Redefaults 7 1 4 2 7 • €112 mn organic NPE outflows in 4Q2021, Unlikely to pay 4 3 1 2 leading to €98 mn net organic NPE reduction 1Q2021 2Q2021 3Q2021 4Q2021 Outfl
Slide 25: Gross loans and coverage by IFRS staging
Gross loans and coverage by IFRS 9 staging Gross loans by IFRS 9 stage (€ mn) Allowance for expected loan Coverage ratio credit losses (€ mn) 12,261 10,864 10,856 10,282 Dec 21 Stage 1 6,870 Dec 20 Sep 21 Dec 21 Pro forma 1,902 for HFS 7,362 7,529 73% 7,529 95 76 849 792 Stage 1 1.4% 1.2% 1.1% 1.1%
Slide 26: Cost of risk of 57 bps for FY2021; 35 bps for 4Q2021
Cost of risk of 57 bps for FY2021; 35 bps for 4Q2021 1.18% 1.12% Bank’s IFRS 9 Macroeconomic assumptions 1.00% 0.43% 0.57% Base line GDP rate Unemployment rate 0.75% 2022 4.3% 6.5% 0.61% 2023 3.3% 6.4% (0.04%) FY2018 FY2019 FY2020 FY2021 bps 66 52 78 35 140 • Cost of risk of 35 bps for 4Q2021 (€9 mn
Slide 27: REMU: REMU stock reduced by 17% in FY2021
REMU: Pro forma for Held For Sale, REMU stock reduced by 17% in FY2021 REMU stock reduced to €1.2 bn as at 31 Dec 2021 Properties sold exceed properties acquired since 2017 Group BV (€ mn) #1,951 #3,388 #2,860 Group BV (€ mn) 1,653 -17% 1,324 (1,374) 1,473 1,438 1,215 1,215 (173) 1 Jan 2017 Addition
Slide 28: Organisational resilience & ESG agenda: ESG Performance
Organisational resilience & ESG agenda: ESG Performance Environmental Social Governance 2.0 mn kWh >16.5 ths 33% of energy savings in FY2021 cancer patients received treatment and of the board of directors are female as at 31 Dec 2021 other services at the Bank of Cyprus €273k Oncology Centre for FY
Slide 29: Updated Medium-term Strategic Targets
Updated Medium-term Strategic Targets 29
Slide 30: Investment highlights
Investment highlights Our Operating Open, small and dynamic economy; fully recovered to pre-pandemic levels Environment Our Position Diversified Leading Financial and Technology hub in Cyprus Strong leadership team with an excellent track-record, committed to deliver Our Team shareholder value while
Slide 31: Diversified Leading Financial and Technology hub in Cyprus
Diversified Leading Financial and Technology hub in Cyprus Leading full-service Bank Profitable life and non-life Strong Technology hub insurance business • 336K active digital users1; 89% • 39% market share in loans • Market leader in Life insurance digital transactions2 and 35% in deposits • Stron
Slide 32: Significant progress achieved on strategy announced in November 2020
Significant progress achieved on strategy announced in November 2020… Single digit NPE ratio achieved a year earlier Strengthened capital position CET1 ratio2 NPE ratio 30.3% 14.8% 14.8% 15.8% 25.2% ≥13% <10% 7.5% Dec 19 Dec 20 Dec 211 Dec 22 Dec 19 Dec 20 Dec 21 1 Previous Previous MT Guidance Guid
Slide 33: Updated medium term targets
…leading to increased focus on value creation, with updated medium term targets 2021 2023 2025 Return on Tangible 1.8% Mid-single digit >10% Equity (ROTE)1 On trajectory to Profitability consider dividend distribution4 Cost to Income ratio2 60% 50%-55% Asset Quality NPE Ratio 7.5%3 <5% <3% Cost of r
Slide 34: Key strategic pillars to deliver shareholder value
Key strategic pillars to deliver shareholder value 1 Revenue growth in a more capital 2 Lean operating model efficient way • Continued delivery on the • Grow high quality new lending cost agenda • Drive growth in niche areas for • Improve operating efficiency further market penetration whilst fundin
Slide 35: Transformation Plan enabling delivery on Strategic Pillars
Transformation Plan enabling delivery on Strategic Pillars • Introduce digital products through web Digital Sales and mobile banking platforms (cards, • Re-define branch operating Consumer overdrafts, personal loans, auto loans) model • Improve automated campaign capabilities Banking • Centralise, s
Slide 36: Building blocks towards a strong ROTE of >10% by 2025
Building blocks towards a strong ROTE of >10% by 2025 Gradual recovery of NII Non-NII: growth in a more capital efficient way • NII impacted by de-risking and end of • Grow Net fees and commissions via TLTRO favourable terms in the near term multiple initiatives (CAGR c.4%2) • Expected to recover fr
Slide 37: NII growth driven by loan expansion and margin stabilisation
1 NII growth driven by loan expansion and margin stabilisation Drivers • c.€9 bn of high quality new lending New lending of c.€9 bn for 2022-2025 • Significant deleverage of Cyprus economy in past 7 € bn years, coming to an end New lending €7.1 bn or c.8.0% of GDP1 p.a. • Economic growth expected to
Slide 38: NII growth driven by loan expansion and margin stabilisation
1 NII growth driven by loan expansion and margin stabilisation Drivers Conservative interest rate assumptions • Conservative interest rate assumptions 2.33% 2.31% • Well positioned for faster rising rates 0.04 • TLTRO favourable terms not expected to be extended 2021 2022 2023 2024 2025 post June 20
Slide 39: Grow F&C from banking activities, through targeted initiatives
1 Grow F&C from banking activities, through targeted initiatives Drivers Fee and commission income from banking activities1 • Fees supported by price adjustments and increased activity as economy recovers CAGR: c.+4% • Amend the universe of deposits on which 144 172 liquidity fees are charged • Depo
Slide 40: Profitable insurance business well positioned for further growth
1 Profitable insurance business well positioned for further growth Drivers Sustainable healthy profitability… • Pursue new market segments with profitable potential (business insurance, income protection) Net insurance income1 Total regular income2 € mn € mn • Explore opportunities in Occupational P
Slide 41: Profitable insurance business well positioned for further growth
1 Profitable insurance business well positioned for further growth Drivers Sustainable healthy profitability… • Widen target market leveraging on revamped bancassurance model Net insurance income GWP1 growth € mn € mn • Exploit synergies with life insurance agency +9% force 25 >50% 22 23 • Focus on
Slide 42: A Trusted Provider and the Market Cornerstone
1 A Trusted Provider and the Market Cornerstone Leveraging our market footprint, our trusted provider status and our digital capability investment 60% of the businesses in the >335K users currently utilise the BOC economy are BOC clients that can digital channels services and are digitally obtain va
Slide 43: An Ecosystem Driven Platform to Create Opportunities for All
1 An Ecosystem Driven Platform to Create Opportunities for All Bringing the economy stakeholders together to drive opportunities in lifestyle banking and beyond BOC Own Propositions Products, Offerings and and Products Transactions from Others Facilities eCommerce Payments Utilities Insurance Logist
Slide 44: Cost containment whilst funding digitisation and investment in business
2 Cost containment whilst funding digitisation and investment in business Drivers for a lean operating model Total operating costs1 <€350 mn C/I ratio1 expected to rise to mid 60s% despite inflationary pressures • Absorbing inflationary pressures and before improving to 50-55% investments in the bus
Slide 45: Low single digit NPE ratio in sight
3 Low single digit NPE ratio in sight NPE ratio 62.9% 7.5% c.5% <3% • Organic NPE reduction € bn 15.0 resulting to NPE ratio of c.5% by end-2022 (4.7) • Containment of NPE inflows post the pandemic (9.5) • Normalisation of COR and 0.8 reduction in other impairments as balance sheet de-risking Dec 20
Slide 46: Capital Management with CET1 13.5 - 14.5%
Capital Management with CET1 13.5 - 14.5% Robust capital position Improving ROTE supporting Usage of capital going forward in 2021 organic capital generation • Organic growth of loan book CET1 ratio 15.8%1 (FL:14.3%1) • Investment in business ROTE: >10% by 2025 • Regulatory impacts Total capital rat
Slide 47: Organisational resilience & ESG agenda
4 Organisational resilience & ESG agenda A B C Enhanced structure Focus on our people ESG strategy and corporate governance Fostering, cross-functional Performance based pay Launch of ESG targets collaboration structure introduced across with focus shifting on the Bank to drive greater Environment S
Slide 48: ESG strategy - Lead the transition to a Sustainable Future
ESG strategy - Lead the transition to a Sustainable Future Robust Infrastructure • Set-up of dedicated Executive Committee to oversee ESG agenda • Formulation of dedicated workgroups to ensure delivery • Launch of ESG Targets • Improvement of MSCI ESG rating: AA rating assigned to BOCH Carbon neutra
Slide 49: Key Information and Contact Details
Key Information and Contact Details Contacts Credit Ratings Standard & Poor’s Global Ratings: Investor Relations & ESG Long-term Issuer Credit Rating: Affirmed at "B+" on 7 February 2022 (positive outlook) Tel: +35722122239, Email: investors@bankofcyprus.com Short-term Issuer Credit Rating: Affirmed
Slide 50: APPENDIX Macroeconomic overview
APPENDIX Macroeconomic overview 50
Slide 51: Strong economic recovery continued in 4Q2021; Conservative macro assumptions
Strong economic recovery continued in 4Q2021; Conservative macro assumptions underpin the Business Plan Strong economic recovery expected to continue in 2022 Business Plan GDP assumptions Annual Real GDP yoy % change1 Annual Real GDP yoy % change1 14.4% 15.00% 6.0% 5.2% 12.00% 5.0% 4.0% 9.00% 13.4%
Slide 52: Consumption and business activity continue to improve
Consumption and business activity continue to improve Economic Sentiment Indicator: Confidence returning Retail sales stabilise in 4Q2021 Retail trade volume % change -3m average 52.4 50.0 109.9 105.6 30.0 6.5 10.6 10.0 80.0 80.8 -10.0 6.8 -26.8 -4.0 -30.0 -12.3 -25.1 -50.0 -49.8 Feb-20 May-20 Aug-2
Slide 53: 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 7.1% increase in GDP for 2022-2026 €1.2 bn €1.1 bn from EU mechanism additional funds mobilised in Cyprus 2.5% increase in employme
Slide 54: Recovery and Resilience Facility Estimated Budget
Appendix- Recovery and Resilience Facility Estimated Budget Policy axis/ Component Estimated budget (€ mn) % of total estimated budget 1 Public Health and civil protection- lessons learnt from the pandemic 74.1 6.1% 1.1 Resilient and effective health system and enhanced civil protection 74.1 6.1% 2
Slide 55: APPENDIX Additional asset quality slides
APPENDIX Additional asset quality slides 55
Slide 56: €0.6 bn NPE sale agreed in 4Q2021, reducing NPE ratio to 7.5%
€0.6 bn NPE sale agreed in 4Q2021, reducing NPE ratio to 7.5%1 NPEs REMU properties Helix 3 Corporate Re-performing NPEs 3 SMEs • Agreement for the sale of €568 mn NPEs and c.€120 mn REMU 5% Commercial 1% properties as at 30 Sep 2021 1% 26% • Gross cash consideration of c.€385 mn 42% Residential €56
Slide 57: 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 €9.54 bn € bn Housing Other Housing Other Business LTV2 €3.59 bn €0.69 bn €5.26 bn Private 3.59 0.69 4.28 Individuals <80% 88% 35% 71% Hotels & 1.15 >80% 12% 65% 29% Catering Real Estat
Slide 58: Decomposition of payment deferrals
Decomposition of payment deferrals IFRS 9 staging for expired loan payment deferrals Private Individuals Private individuals: €1.84 bn1 • Net reclassification of c.€18 mn from Stage 2 to Stage 1 mainly 1.5% 3.0% 20.7% due to improved macro assumptions 1.53 1.51 1.31 0.63 Businesses 0.25 0.23 0.14 0.
Slide 59: Continuous progress across all segments
Continuous progress across all segments Focus shifts to Retail Corporate Dec 2021 Pro forma € mn Dec 20 541 Inflows 3 Exits 1 (263) NPE ratio 5.6% 771 Dec 21 281 NPE coverage 83% HFS (20) Pro forma NPE total coverage 121% 261 Corporate 225 for HFS €261 mn SME Dec 2021 Pro forma Dec 20 619 Terminated
Slide 60: Gross loans and NPEs by Customer Type
Gross loans and NPEs by Customer Type Gross loans by customer type (€ mn) 12,261 1,667 10,864 10,856 10,282 1,293 1,240 987 4,073 3,698 3,741 3,464 1,765 1,222 1,198 1,173 2,126 2,186 2,196 2,186 2,630 2,465 2,481 2,472 Dec 20 Sep 21 Dec 21 Dec 21 pro forma for HFS NPEs by customer type (€ mn) 3,086
Slide 61: NPE Coverage and Total coverage by segment
NPE Coverage and Total coverage by segment Coverage and collateral maintained Tangible Collateral 1 Allowance for expected loan credit losses Corporate €206 mn Global Corporate: €55 mn SME €89 mn Retail-Housing €307mn Retail-Other €114 mn Total €771 mn 184% 174% 175% 167% 58% 64% 136% 138% 140% 64%
Slide 62: Asset quality - NPE analysis
Asset quality- NPE analysis (€ mn) Dec-21 Sep-21 Jun-21 Mar-21 Dec-20 Dec-19 A. Gross Loans after Residual Fair value 10,678 10,683 10,708 12,055 12,031 12,551 adjustment on initial recognition Residual Fair value adjustment on initial recognition 178 181 185 226 230 271 B. Gross Loans 10,856 10,864
Slide 63: Analysis of gross loans and NPE ratio by Economic activity
Analysis of gross loans and NPE ratio by Economic activity Gross loans by economic activity (€ bn) Dec 19 Dec 20 Jun 21 Sep 21 Dec 21 % of total 10% 3% 11% 5% 12% 47% 6% 6% 6.02 5.83 5.08 5.06 5.06 1.36 1.30 1.29 1.27 1.24 1.21 1.19 1.18 1.18 1.17 1.17 1.08 1.04 1.04 1.03 1.00 0.89 0.85 0.79 0.75 0.
Slide 64: Balance sheet de-risking results in a smaller but safer loan book
Balance sheet de-risking results in a smaller but safer loan book Net Loans: Non-legacy1 vs Legacy Interest Income on Loans: Non-legacy1 vs Legacy € bn € mn 15.62 36% 5.64 10.73 10.36 83 82 10.01 10.06 9.81 77 79 76 1.79 1.36 0.73 0.68 0.44 4% 16 17 10 10 7 64% 9.98 9.28 9.38 9.37 96% 8.94 9.00 67 6
Slide 65: Risk adjusted yield will rise as Legacy book reduces
Risk adjusted yield will rise as Legacy book reduces Non- Legacy Group Legacy FY2021 FY2021 FY2021 Interest Income on loans • Non-Legacy Book is expected to grow and to 268 53 321 increasingly drive Group results (€ mn) (pre FTP) Loan credit losses (€ mn) 16 (82) (66) • Legacy book revenues predomin
Slide 66: Rescheduled Loans
Rescheduled Loans Rescheduled loans-Asset Quality Rescheduled loans by customer type (€ bn) 31 Dec 2021 € ‘000 2.73 Stage 1 - 0.97 2.09 Stage 2 726,595 0.81 1.60 1.57 Stage 3 564,946 0.44 0.46 0.43 POCI 66,249 0.53 0.36 0.19 0.17 0.17 0.17 FVPL 212,589 0.34 0.41 0.46 0.46 0.15 0.45 Total 1,570,379 0
Slide 67: REMU - the engine for dealing with foreclosed assets
REMU- the engine for dealing with foreclosed assets €1.59 bn sales of 3,206 properties across all property classes since set-up Evolution of properties managed by REMU Sales € mn (contract prices1) # 99 # 331 # 575 # 5792 # 492 # 1,1303 1,473 34 (140) Sales €1.59 bn (102) 1,215 1,215 (50) 76 82 505
Slide 68: REMU - the engine for dealing with foreclosed assets
REMU- the engine for dealing with foreclosed assets On-board assets in REMU at conservative c.25%-30% discount to OMV Cumulative sales by property type; 37% of sales relate to land BV € mn Sales contract price 6% Legacy 2016 2017 2018 2019 2020 2021 10% Land 37% Commercial 184 450 211 157 115 79 19
Slide 69: APPENDIX Additional financial information
APPENDIX Additional financial information 69
Slide 70: Consolidated Balance Sheet
Consolidated Balance Sheet % % Assets (€ mn) 31.12.2021 31.12.2020 change Liability and Equity (€ mn) 31.12.2021 31.12.2020 change Cash and balances with Central Banks 9,231 5,653 63% Deposits by banks 457 392 17% Loans and advances to banks 292 403 -28% Funding from Central Bank 2,970 995 - Debt se
Slide 71: Risk Weighted Assets – Regulatory Capital
Risk Weighted Assets– Regulatory Capital Risk Weighted Assets by Geography (€ mn) Reconciliation of Group Equity to CET1 31.12.21 € mn 31.12.21 31.12.19 31.12.20 30.09.21 31.12.21 Pro forma for HFS Group Equity per financial statements 2,081 Cyprus 12,678 11,477 10,860 10,595 10,245 Less: Intangible
Slide 72: Pro forma for HFS, RWA intensity reduced to 41%
Pro forma for HFS, RWA intensity reduced to 41% RWAs reduced by €1,292 mn since Dec 2020 Dec 21 RWAs Dec 15 Dec 16 Dec 17 Dec 18 Dec 19 Dec 20 Sep 21 Dec 21 Pro forma for HFS € bn 19,666 18,865 17,260 15,373 12,890 11,636 10,991 10,694 10,344 RWA intensity decreased to 41% pro forma for HFS 85% 85%
Slide 73: SREP requirements
SREP requirements SREP requirements for 2021 and 2022 CET1 ratio Total capital ratio 15.01% 14.50% 1.25% 10.08% O-SII 1.00% 9.69% 2.50% 1.25% O-SII 1.00% CCB 1 2.50% 2.50% 3.26% CCB1 2.50% Pillar 2R 3.00% Pillar 2R 1.69% 1.83% Tier 2 2.00% 2.00% AT1 1.50% 1.50% Total 4.50% Pillar 1 Pillar 1 4.50% 4.
Slide 74: Buffer to MDA Restrictions Level & Distributable Items
Buffer to MDA Restrictions Level & Distributable Items1 Maximum Distributable Amount for BOCH CET1 Ratios • No prohibition applies to the payment of coupons on any AT1 capital instruments 15.1% issued by the Company and the Bank 545 bps c.9.7% • Significant CET1 MDA buffer as at 31 Dec 2021: 545 bps
Slide 75: Cypriot business
Cypriot business Loan market share stable qoq post completion of Helix 2 Strong market shares in resident and non-resident deposits Loans Deposits Residents Non-residents 45.4% 38.3% 41.1% 41.9% 37.3% 39.1% 38.8% 35.8% 35.4% 35.3% 35.2% 37.1% 36.0% 35.3% 34.9% 34.9% 35.1% 35.0% 34.8% 34.8% 32.8% 32.
Slide 76: Income Statement bridge for FY2021
Income Statement bridge1 for FY2021 Underlying Statutory € mn NPE sales Other basis Basis Net interest income 296 - - 296 Net fee and commission income 172 - - 172 Net foreign exchange gains and net gains/(losses) on financial instrument transactions and disposal/dissolution of 24 - (30) (6) subsidi
Slide 77: Income Statement
Income Statement € mn 4Q2021 3Q2021 qoq% Net Interest Income 73 71 2% Net fee and commission income 44 44 -1% Net foreign exchange gains/(losses) on financial instrument transactions and disposal/dissolution of subsidiaries and associates 10 6 87% Insurance income net of claims and commissions 18 12
Slide 78: Analysis of Interest Income and Interest Expense
Analysis of Interest Income and Interest Expense Analysis of Interest Income (€ mn) 4Q2020 1Q2021 2Q2021 3Q2021 4Q2021 Loans and advances to customers 89 83 82 77 79 Loans and advances to banks and central banks 2 3 7 10 11 Investment at amortised costs 2 2 2 2 2 Investments FVOCI 4 3 3 3 3 Investme
Slide 79: Income Statement by business line for FY2021
Income Statement by business line for FY2021 Consumer SME Corporate Global International Wealth & € mn RRD REMU Insurance Treasury Other Total Banking Banking Banking corporate Banking Markets Net interest income/(expense) 77 29 51 56 8 - 48 (3) - 22 8 296 Net fee & commission income/(expense) 46 9
Slide 80: Analysis of Deposits
Analysis of Deposits Deposits by Currency (€ bn) Dec 21 16.69 17.13 17.53 16.53 0.31 0.11 0.29 0.10 0.29 0.11 1.32 0.31 0.10 1.37 1.29 1.20 8% 2% Other Currencies 0% 15.01 14.93 15.40 15.74 GBP USD 90% EUR Dec 19 Dec 20 Sep 21 Dec 21 Deposits by Type (€ bn) 16.69 16.53 17.13 17.53 7.59 9.22 33% 8.15
Slide 81: APPENDIX Glossary & Definitions
APPENDIX Glossary & Definitions 81
Slide 82: Glossary & Definitions
Glossary & Definitions Comprise mainly (a) fees of external advisors in relation to: (i) disposal of operations and non-core assets, and (ii) customer loan restructuring activities, and (b) the cost of the tender offer for the Advisory and other restructuring costs Old T2 Capital Notes. Comprises (i
Slide 83: Glossary & Definitions
Glossary & Definitions 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 banking app, browser and ATMs) to perform banking transactions, as well as
Slide 84: 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 sens
Slide 85: 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 86: Glossary & Definitions
Glossary & Definitions NPE sales refer to sales of NPE portfolios completed, as well as contemplated and potential future sale transactions, irrespective of whether or not they met the held for sale classification criteria at NPEs sales the reporting dates. Non-legacy Relates to all business lines e
Slide 87: Glossary & Definitions
Glossary & Definitions Risk adjusted yield Interest Income on Loans net of allowance for expected loan credit losses/Net Loans. RRD Restructuring and Recoveries Division. RWAs Risk Weighted Assets. RWA Intensity Risk Weighted Assets over Total Assets. Special levy on deposits and other Relates to th