Bank of Cyprus Holdings PLC · CSECY:BOCH
Bank of Cyprus — Shareholder Meeting (September 2013)
17 slides from Bank of Cyprus's shareholder meeting presentation, Sep 10, 2013
Slide 1: Bank of Cyprus Group 100 Days: A review of the period
Bank of Cyprus Group 100 Days A review of the period 01 June – 10 September 2013 Stabilisation, Restructuring and Integration of Laiki operations, Shareholders’ General Meeting to elect new Board of Directors Annual General Meeting 10 September 2013
Slide 2: Requirements as per Memorandum of Understanding (MoU)
Requirements as per Memorandum of Understanding (MoU) Transitory Board of Directors and interim Chief Executive Officer appointed, until new shareholders are organised in a General Meeting, in order to facilitate: • Stabilization of the bank • Restructuring of Cyprus operations – Restructuring and L
Slide 3: Actions to comply with MoU
Actions to comply with MoU 1• Implementation of Recapitalisation – 47,5% of bailed-in eligible deposits converted to equity, based on independent valuation exercise to ensure that the Bank meets the minimum capital adequacy ratios throughout the MoU program 2• Restructuring of Cyprus operations – Re
Slide 4: Implementation of Recapitalisation
1 Implementation of Recapitalisation • Recapitalisation • 47,5% of bailed-in eligible deposits converted into equity; through bail-in of total equity raised €3,8 bn depositors • Issued 18% of share capital to Cyprus Popular Bank for the • Exit from Resolution acquisition of certain assets, liabiliti
Slide 5: Restructuring of Cyprus operations
2 Restructuring of Cyprus operations Initial decisions that needed to be made to preserve stability and continued viability during the transition period include: Group Branch Human Systems and organisational network resources procedures structure 4
Slide 6: Restructuring of Cyprus Operations: Integration and Restructuring Governance
2 Restructuring of Cyprus Operations Integration and Restructuring Governance Board of • Validate and approve Directors Restructuring Plan deliverable Board • Provide overall Restructuring orientation and guidance Committee Restructuring • Develop vision, strategy • Masterplan implementation Steerin
Slide 7: Restructuring of Cyprus Operations: Branch Network
2 Restructuring of Cyprus Operations Branch Network …results in a significant reduction in Overlap in branch networks… branch numbers • Starting with 203 branches 118 from BOC 202 -31% 85 from ex-Laiki 191 166 • Closed 37 branches until 6 September 140 2013 (currently operating 166 branches) On-
Slide 8: Steps undertaken to reduce staff cost
2 Restructuring Cyprus Operations Steps undertaken to reduce staff cost Annualized Cyprus bank-only cost base € mn. • Actions to reduce staff cost through 286 salary cuts and 23 -36% Voluntary Retirement Scheme (VRS) 81 182 • From 1/6/2013 salary cuts • VRS in Jul-Aug 2013; about 1.370 full time 201
Slide 9: Steps undertaken to reduce staff numbers
2 Restructuring Cyprus Operations Steps undertaken to reduce staff numbers Cyprus Bank headcount • VRS in 6.033 July/August 2013; 5.725 -24% about 1.370 left the Group 4.355 3.616 3.356 Employees BOC • Ultimate number of Laiki staff to be decided upon the 2.417 2.369 completion of the Restructuring
Slide 10: Risk Management
3 Risk Management • Review end-to-end BOC will revamp and strengthen its risk and end-to-end credit processes, credit processes (sanctioning, monitoring, delinquency governance and management, recovery) policies to maximise the bank’s recovery rate for non- • Credit sanctioning has already been sepa
Slide 11: Risk and Credit Management
3 Risk and Credit Management End-to-end processes are being strengthened to reverse trends in asset quality Risk Proactive Delinquency Strict Credit Management Management & Sanctioning Governance Recovery • Centralized Risk • Clearly defined • Clear assignment of division, led by an sanctioning auth
Slide 12: Funding and Liquidity Conditions: Actions to Improve Liquidity
4 Funding and Liquidity Conditions Actions to Improve Liquidity • Ways to improve • Actions to improve liquidity including: liquidity and launch – Issuance of government guaranteed bonds new products – Deleveraging and asset disposals – Launch new deposit and other product campaigns across • Embark
Slide 13: Restructuring Plan: Defining Business Objectives and Credit Policies
5 Restructuring Plan Defining Business Objectives and Credit Policies • Comply with MoU • Appointed McKinsey to support on Restructuring Plan par. 1.28 by delivery and to validate governance against “best practices” delivering “...a restructuring plan …” • Appointed PwC to adopt “Best Practices” in
Slide 14: Restructuring Plan: Radical shift in the Group's strategy
5 Restructuring Plan Radical shift in the Group’s strategy Objectives of Restructuring Plan Potential implications for BoC strategy • Rebuild trust and confidence • Re-orient the Group’s business model of depositors and investors – Revamp offering to key customer segments and especially to most prom
Slide 15: Restructuring Plan: Overseas and non-core subsidiaries
5 Restructuring Plan Overseas and non-core subsidiaries • Set immediate • Created International Operations Division to manage overseas targets for overseas operations subsidiaries to • Set targets for subsidiaries to become self-funded and become self-funded improve performance to reduce exposure ma
Slide 16: 100 days - Roadmap to Shareholders' General Meeting
100 days - Roadmap to Shareholders’ General Meeting Early 06/13 07/13 08/13 26/04/13 McKinsey for KPMG Delivery New BoD Restructuring valuation of KPMG 10/09/13 appointed Plan exercise Report AGM 01/06/13 06/13 08/08/13 New CEO and BoD Active steps 30/07/13 Notice of empowerment; for integration Rec
Slide 17: Key Challenges for the Bank
Key Challenges for the Bank Managing liquidity – Defending deposit franchise – Regaining trust Integrating Laiki Bank – Achieving operations efficiencies Defending overseas investments Managing loan quality deterioration – Effective management of problem loans Identify and explore growth opportuniti
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