Bank of Cyprus Holdings PLC · CSECY:BOCH
Bank of Cyprus — H1 2018 Earnings Presentation
75 slides from Bank of Cyprus's earnings presentation, Aug 28, 2018
Slide 1: Group Financial Results for the six months ended 30 June 2018
Bank of Cyprus Group Group Financial Results for the six months ended 30 June 2018 The financial information included in this presentation is neither reviewed nor audited by the Group’s external auditors. The Interim Condensed Consolidated Financial Statements for the six months ended 30 June 2018 h
Slide 2: Corporate Actions post 30 June 2018 delivering Value for Shareholders
Corporate Actions post 30 June 2018 delivering Value for Shareholders • Agreement for sale of gross loans of €2.8 bn, of which €2.7 bn Gross NPEs (contractual balance of c.€5.78 bn) • Consideration of c. €1.4 bn, 24 cents on contractual and 48 cents on Gross Book Value Sale of • Gross NPE ratio redu
Slide 3: Impact of Corporate Actions on Key Metrics
Impact of Corporate Actions on Key Metrics c.€9 bn balance sheet deleveraging since c.€10 bn Gross NPE reduction since peak 25 p.p. reduction in NPE ratio since peak 2013 Net NPEs (€ bn) Gross NPEs provision coverage Total assets (€ bn) RWA (€ bn) LLR(€ bn) -c.€9 bn 34% 52% 52% 49% -25 p.p. -c.€10 b
Slide 4: Transformational €2.7 bn NPE Trade (Helix) Delivers Accelerated Risk Reduction
Transformational €2.7 bn NPE Trade (Helix) Delivers Accelerated Risk Reduction First sizeable Corporate and SME secured NPE sale in Cyprus (15% of Cyprus GDP) Gross NPE reduction of €3.1 bn since 31 March 2018 € bn -€3.1 bn (0.4) Accelerated de-risking equivalent to six quarters of organic NPE red
Slide 5: Helix key highlights
Helix key highlights 30 June 2018 Assets sold € bn Receipts € bn Contractual Loans1 5.71 Consideration 1.38 Gross Loans 2.81 of which: of which NPEs 2.70 - Cash 0.93 Provisions Held (1.44) - Bonds 0.45 Transaction Costs and other Other2 0.10 (0.05) adjustments3 Consideration net of Carrying Value of
Slide 6: 1H2018 – Highlights
1H2018 – Highlights • Thirteen consecutive quarters of organic NPE reduction Significant • Gross NPEs reduced by €435 mn1 (5%) qoq to €7.9 bn Progress on • NPE sale (Helix) further reduces Gross NPEs by €2.7 bn to €5.2 bn2,3 Balance Sheet • Gross NPE ratio reduced to 43% and 38% pro forma for Helix
Slide 7: Capital and Funding Position
Capital and Funding Position 7
Slide 8: Strengthened Capital Position
Strengthened Capital Position Total Capital ratio at 15.4%1,2 pro CET1 ratio at 14.0%1,2,6 pro forma3,5 forma3,5,excluding impact of any AT1 issuance +60 bps 15.4% 1.4% 0.3% 1.4% (0.2%) 0.1% 0.5% (0.8%) 0.7% 14.0% 14.0% 12.6% 12.0% 11.9% CET 1 Operating Provisions RWA CET 1 UK sale Helix CET 1 UK sa
Slide 9: Significant liquidity surplus of €1.4 bn
Significant liquidity surplus of €1.4 bn1 6% ytd increase in local deposits, offsets the 4% ytd reduction in IBU deposits Minimum 30 Jun Liquidity ratio Surplus required 2018 Group deposits €bn Cyprus non-IBU Cyprus IBU UK 5 NSFR3 100% 115% €2,489 mn 18.43 Cyprus deposits by 17.85 18.00 passport ori
Slide 10: Group Loan Portfolio and Asset Quality
Group Loan Portfolio and Asset Quality 10
Slide 11: c.€2.7 bn NPE sale boosts continued organic NPE reduction
c.€2.7 bn NPE sale boosts continued organic NPE reduction 72% reduction of Net NPEs since peak (Dec 14) Group € bn Net NPEs (€ bn) Gross NPE ratio LLR (€ bn) 63% 62% 60.0% 55% 15.0 47% • €2.7 bn NPE sale improves 50.0% 14.0 NPE sale 43% Gross NPE ratio by c.10 11.0 of €2.7 bn 38% 40.0% p.p.5 8.8 7.9
Slide 12: c.€0.7 bn NPE outflows in 2Q2018 leading to €435 mn organic NPE reduction
c.€0.7 bn NPE outflows in 2Q2018 leading to €435 mn organic NPE reduction Outflows of NPEs on curing and exits (€ bn) Cyprus operations (€bn) Curing of restructured loans DFAs & DFEs Write offs and non contractual write offs Other (Interest / Collections / Change in balances) -0.03 - 0.04 (0.26) (0.
Slide 13: Core NPE risk at €4.1 bn down by 64% since 2015 and 57% covered
Core NPE risk at €4.1 bn4 down by 64% since 2015 and 57% covered € bn % of Gross Loans Provision coverage Forborne 14.0 No impairment Exit dates for non core NPEs No arrears1 2.0 €1.1 bn NPEs with no arrears1 NPEs 0.6 Corporate SME Retail No arrears but Impaired No arrears but impaired € bn 0.5 8.8
Slide 14: Coverage & Collateral maintained post Helix
Coverage & Collateral maintained post Helix Quarterly CoR at 0.9% NPE total coverage at 122% when collateral included 1 Quarterly Cost of Risk - Group (excluding additional provisions in 2Q17) 1 Quarterly Cost of Risk - Group (including additional provisions in 2Q17) 3 Loan loss reserves Tangible Co
Slide 15: Clear strategy for residual NPEs
Clear strategy for residual NPEs Organic reduction Target for residual NPEs revised to c.€200 mn per quarter Group NPEs (€ bn) Non Core NPEs 5.2 • Expect €1.1 bn to exit NPEs in the forthcoming years (see slide 13) • Monitoring redefaults & quality of restructurings Non Core NPEs Core NPEs-ESTIA €1.
Slide 16: Improved Legislative Framework supporting realisation and disposal of collateral
Improved Legislative Framework1 supporting realisation and disposal of collateral Amendments approved aim to strength the foreclosure framework via: Clarifying and limiting the reasons for setting aside the foreclosure process through court Foreclosure Enhance auction routes Law • Introduction o
Slide 17: REMU sale agreements of €207 mn ytd
REMU sale agreements of €207 mn ytd1 €207 mn sales agreed ytd; REMU profit of €21 mn in 1H2018 Sales contract prices2 (€ mn) Total sale 2 agreements • 362 properties sold ytd, €207 mn 43 representing c.13% of total REMU properties 36 • SPAs signed for 33 additional properties 252 171 Offers accepted
Slide 18: New lending of €1.3bn in 1H2018
New lending of € 1.3bn in 1H2018 Total New Lending of €1.0 bn in Cyprus in 1H2018 Tourism & Trade core sectors Cyprus UK Contribution to 2018Q1 real growth of GVA in p.p. (total 4.29%) Binding agreement signed in Jul-18 for the sale of BOC UK1 260 Tourism, trade and transport 1.4 Construction 0.8 Pr
Slide 19: Operating Performance
Operating Performance Bank of Cyprus Holdings 8 19
Slide 20: Balance sheet de-risking results in a smaller but safer loan book
Balance sheet de-risking results in a smaller but safer loan book Interest Income on Loans broadly flat qoq (Pre Helix and UK sale) Net Loans: Performing vs Legacy Interest Income on Loans: Performing vs Legacy € bn (pre FTP) Performing Legacy € mn (pre FTP) Performing Legacy 17.1 15.6 217 203 204 2
Slide 21: Profitability
Risk adjusted yield will rise as Legacy book reduces Performing Legacy Group Of which Of which Of which included included included 1H2018 1H2018 1H2018 in Helix in Helix in Helix • Performing Book is expected to and UK and UK and UK grow and to increasingly drive Interest Income on Group results loa
Slide 22: NIM remains under pressure by otherwise individually positive actions as expected
NIM remains under pressure by otherwise individually positive actions as expected Total Assets (€ bn) AIEA mix (% Total) Effective yield on assets & cost of funding 1 Performing Legacy Performing Legacy Liquids1 Non int-producing Performing Legacy Liquids NIM Liquids 2 Cost of funding 3 Effective yi
Slide 23: Non interest income of €76 mn in 2Q2018
Non interest income of €76 mn in 2Q2018 Analysis of Non Interest Income (€ mn) – Quarterly Net FX gains/(losses) & Net gains/(losses) on other financial instruments, and other income Net fee and commission % Gains/(losses) from revaluation and disposal of investment properties and on disposal of sto
Slide 24: Focus on revenue generation and total income target
Focus on revenue generation and total income target Total Income down by 13% qoq; NIM flat at 251bps Total income (€ bn) NIM (bps) 355 335 337 333 338 350 286 300 257 251 251 250 200 238 235 246 237 233 223 231 214 201 150 100 2Q2016 3Q2016 4Q2016 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 2Q2018 • Total In
Slide 25: Total Expenses
Total Expenses Cost to Income Ratio (C/I ratio) Cost to Income ratio Cost to Income ratio excluding special levy on banks and SRF contibution 51% 46% 46% 47% 46% • C/I ratio at 51% for 1H2018, compared to 46% for 1Q2018, 45% 42% 42% 41% 48% principally reflecting the qoq decrease in total income and
Slide 26: Income Statement Review
Income Statement Review € mn 1H2018 1H2017 2Q2018 1Q2018 qoq % yoy% Key Highlights Net Interest Income 249 316 125 124 1% -21% Non interest income 183 154 76 107 -29% 19% • Stable qoq NII at €125 mn Total income 432 470 201 231 -13% -8% • Non-interest income for 2Q2018 at Total expenses (218) (214)
Slide 27: Guidance
Guidance Bank of Cyprus Holdings 8 27
Slide 28: Guidance for FY2018
Guidance for FY2018 • Clear operating profit delivery in 1Q2018 and 2Q2018 Organic • Impact of Helix and sale of UK Bank disclosed, but timing of completion is largely dependent profitability on approvals and remains uncertain • Cost of Risk expected to be below 1% • Organic NPE reduction expected t
Slide 29: Guidance for FY2018
Guidance for FY2018 30.06.2018 Balance Sheet June-2018 Helix BOC UK pro forma1 for Helix and UK sale Liquid Assets 6.1 1.3 (0.3) 7.1 Net Loans 14.2 (1.2) (1.8) 11.2 A more liquid balance sheet Total Assets 23.7 (2.0) 21.7 • Loan to deposit ratio of 68% from 77% Deposits 18.4 (1.9) 16.5 • Loan/Assets
Slide 30: Guidance for FY2018
Guidance for FY2018 30.06.2018 Capital Position June-2018 Helix BOC UK pro forma1 Pro forma capital strengthened due to corporate actions for Helix and UK sale 17.4 (1.5) (1.0) 14.9 • RWA reduced by E2.5bn, or 14% RWAs (€ bn) • Risk intensity reduced to 69% from 74% CET 1 (€ bn) 2.1 2.1 • CET 1 upli
Slide 31: Key Information and Contact Details
Key Information and Contact Details Credit Ratings: Standard & Poor’s Global Ratings: Long-term issuer credit rating: Affirmed at B on 7 July 2018 (positive outlook) Short-term issuer credit rating: Affirmed at B on 7 July 2018 Fitch Ratings: Long-term Issuer Default Rating: Affirmed at “B-" on 29 M
Slide 32: Appendix – Macroeconomic overview
Appendix – Macroeconomic overview 32
Slide 33: Cyprus economy recovering strongly
Cyprus economy recovering strongly… GDP growth of 3.9% yoy in 2Q108 Unemployment rate dropped to 9.4% in Q1 & 8.4 in Q2, 2018 SA 6.0 18.0 15.8 440 3.9 4.0 3.9 3.5 16.0 430 4.0 13.0 420 14.0 3.9 4.0 11.4 2.0 3.4 400 410 12.0 10.3 2.0 400 0.0 1.3 10.0 0.3 9.4 390 -2.0 8.0 384 8.4 380 -1.4 6.0 -4.0 370
Slide 34: Driven by tourism, professional services and construction activity
… driven by tourism, professional services and construction activity Economic activity has been broadly based with Tourism arrivals (mn) Tourism: % changes y-o-y main drivers tourism and construction Contribution to growth of real GVA 3.7 Total arrivals (% change) Total receipts (% change) 4.23 3.2
Slide 35: Appendix-Helix additional information
Appendix-Helix additional information 35
Slide 36: Helix - Legal structure
Helix- Legal structure Key Steps and Diagram • The transaction intends to follow the below broad key steps: • The portfolio will be transferred by the Bank of Cyprus (Seller) to a licensed Cypriot Credit Acquiring Company (“CyCAC”). • The transfer is expected to take place pursuant to a court sancti
Slide 37: Helix- Conditions Precedent in current draft SPA
Helix- Conditions Precedent in current draft SPA Helix conditions precedent` Condition Precedent Description Transfer of the Assets Transfer of the NPL Assets to the CyCAC in accordance with the Scheme of Arrangement (this is the arrangement as per which the NPL Assets will be transferred by the Sel
Slide 38: Appendix – Additional asset quality slides
Appendix – Additional asset quality slides As from 1 January 2018 and following IFRS 9 implementation, the Bank’s disclosure in relation to the loan portfolio quality is based on Non Performing Exposures (NPEs), in line with the EBA standards and ECB NPEs Guidance to the banks. Exposures that meet t
Slide 39: Restructuring efforts continue; re-default levels stable
Restructuring efforts continue; re-default levels stable Quarterly evolution of restructuring activity (€ bn) (Cy operations) Restructured loans Write offs & non contractual write offs DFAs 2.2 2.0 0.3 0.4 0.4 0.3 1.1 0.9 0.9 0.2 0.8 0.8 0.2 0.7 1.50 0.2 0.1 0.1 0.2 0.5 0.2 0.1 0.5 1.26 0.2 0.2 0.1
Slide 40: Adequacy of provisions with NPE provision coverage at 51%
Adequacy of provisions with NPE provision coverage at 51% NPE coverage at 51% Quarterly Provisions for impairment of customer loans (€ mn) NPEs provision coverage 51% 60% 49% 51% 48% 48% 42% 50% 39% 40% 41% 592 40% 30% 20% 10% 96 109 103 64 73 50 58 41 0% 2Q2016 3Q2016 4Q2016 1Q2017 2Q2017 3Q2017 4Q
Slide 41: Continuous progress across all segments
Continuous progress across all segments Focus shifts to Retail and SME after intense Corporate attention transfers within business lines during 4Q2017 Corporate Jun 2018 Jun 2018 pro forma NPEs (Cy) €4.97 bn Dec 16 4.51 Inflows 0.14 0.30 Exits (1.27) Dec 17 1 3.68 NPE ratio 43% 24% Corporate €1.21 b
Slide 42: Gross loans by Geography and by Customer Type
Gross loans by Geography and by Customer Type Gross loans by geography 30 June 2018 (%) Total 20.13 20.01 19.50 19.25 1.5% (€ bn) 0.56 0.51 18.75 18.59 18.31 1.30 0.38 0.33 1.44 1.43 0.32 0.35 9.9% 1.51 0.27 1.62 1.76 1.82 13.71 18.27 18.06 17.69 17.41 0.21 16.81 16.48 16.22 0.03 13.47 88.6% Dec-16
Slide 43: NPEs by Geography and by Customer Type
NPEs by Geography and by Customer Type NPEs by geography (€bn) 30 June 2018 (%) Total 12.49 0.05 0.57 11.03 0.3% 10.37 0.02 0.51 9.75 9.16 3.4% 0.02 0.46 8.80 0.02 0.38 0.33 8.35 7.92 0.02 0.02 0.31 0.01 0.34 0.03 0.27 11.87 5.18 10.50 9.89 9.35 8.81 8.47 8.00 7.62 0.000.21 4.97 Jun-16 Dec-16 Mar-17
Slide 44: NPE provision coverage and Total coverage by segment (Cy)
NPE provision coverage and Total coverage by segment (Cy) Coverage and collateral maintained post Helix Cyprus operations 2 Pro forma NPEs Loan loss reserves Tangible Collateral Corporate €1.2 bn €1.3 bn €1.5 bn €1.0 bn Total Cyprus €5.0 bn SME Retail-Housing Retail-Other 127% 118% 123% 122% 122% 12
Slide 45: Asset Quality- NPEs analysis
Asset Quality- NPEs analysis (€ mn) Jun-18 Mar-18 Dec-17 Sep-17 Jun-17 A. Gross Loans after Fair value on Initial recognition 17,798 18,020 18,087 18,532 18,693 Fair value on Initial recognition 514 566 668 721 812 B. Gross Loans 18,312 18,586 18,755 19,253 19,505 B1. Loans with no arrears 10,097 9,
Slide 46: Analysis of Loans and NPEs ratios by Business Line
Analysis of Loans and NPEs ratios by Business Line Gross loans by business line1 (€ bn) 30.06.17 30.09.17 31.12.17 31.03.18 30.06.18 % of total 30% 8% 17% 6% 4% 7% 5% 3% 7% 13% 5.48 5.53 5.17 5.09 5.02 3.14 3.09 3.08 3.15 3.02 2.81 2.71 2.51 2.34 2.41 1.73 1.71 1.64 1.59 1.51 1.50 1.47 1.47 1.46 1.4
Slide 47: Analysis of Loans and NPEs ratios by Economic Activity
Analysis of Loans and NPEs ratios by Economic Activity Gross loans by economic activity (€ bn) % of total 30.06.17 30.09.17 31.12.17 31.03.18 30.06.18 11% 4% 7% 11% 18% 37% 7% 5% 6.88 6.83 6.82 6.77 6.72 3.29 3.28 3.26 3.24 3.20 2.61 2.50 2.34 2.14 2.12 2.11 2.04 2.04 2.02 1.97 1.52 1.45 1.40 1.39 1
Slide 48: Rescheduled Loans for the Cyprus Operations
Rescheduled Loans for the Cyprus Operations Rescheduled Loans1 by customer type (€ bn) Retail housing Retail consumer SMEs Corporate 7.4 7.1 6.9 6.7 6.3 1.7 5.9 5.6 1.7 1.6 1.5 0.6 1.4 0.6 0.5 0.6 1.4 1.3 0.6 1.7 1.6 1.6 0.5 0.5 1.6 1.3 1.3 1.3 3.4 3.2 3.2 3.0 3.0 2.7 2.5 31.12.16 31.03.17 30.06.17
Slide 49: Rescheduled Loans – Asset Quality
Rescheduled Loans – Asset Quality United € ‘000 Cyprus Greece Russia Romania Total Kingdom 30 June 2018 Stage 1 611,232 - - - - 611,232 Stage 2 795,595 - - 3,995 57 799,647 Stage 3 3,392,600 3,419 64,218 6,405 12,833 3,479,475 POCI 487,802 - - - 1,098 488,900 FVPL 312,505 - - - - 312,505 Total 5,599
Slide 50: Gross loans and provisions by IFRS 9 stage
Gross loans and provisions by IFRS 92 stage Gross Loans Provisions Gross Loans Provisions 30 Jun 2018 30 Jun 2018 30 Jun 2018 30 Jun 2018 pro forma3 for Helix pro forma3 for Helix €bn and UK sale and UK sale Stage 1 6.2 0.1 4.5 0.1 Stage 21 4.2 0.1 4.0 0.1 Stage 31 7.9 3.9 5.2 2.3 TOTAL 18.3 4.1 13.
Slide 51: REMU – stock of properties
REMU – stock of properties REMU focus now on sales (Group) € mn BV (126) 220 (166) (9) (39) 3 1641 1524 Stock as at Additions Sales Transfer to Impairment loss Transfer to non-current Foreign exchange and Stock as at 01 Jan 2018 Investment Properties assets held for sale other movements 30 Jun 2018
Slide 52: REMU – the engine for dealing with foreclosed assets
REMU – the engine for dealing with foreclosed assets Book Value Sales of €139 mn in 2018 (Group) Book Value sales by type (Group) Hotels Commercial Residential Land 110 2018 ytd3 €139 mn 25 71 64 19 60 56 55 16 48 46 40 139 79 16 13 1 2 1Q2016 2Q2016 3Q2016 4Q2016 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018
Slide 53: Fair value of collateral and credit enhancements held by the Group
Fair value of collateral and credit enhancements held by the Group 30 Jun 2018 Loans and advances to customers (€ mn) Cash 383 Securities 271 Letters of credit / guarantee 244 Property 21,052 Other 921 Surplus collateral (10,402) Net collateral 12,469 53
Slide 54: Movement of NPEs within business lines following RRD reorganisation
Movement of NPEs within business lines following RRD reorganisation Reporting as from 31 December 2017 includes transfers within RRD business lines following an internal reorganisation of RRD in 4Q2017 Group NPEs Total € bn 8.8 8.8 Forborne No impairments Movement of NPEs 1.3 1.3 No arrears1 within
Slide 55: Appendix – Additional financial information
Appendix – Additional financial information 55
Slide 56: Consolidated Balance Sheet
Consolidated Balance Sheet % % Assets (€ mn) change 31.12.17 30.06.18 Liability and Equity (€ mn) change 31.12.17 30.06.18 Cash and balances with 23% 3,394 4,163 Deposits by banks 3% 495 512 Central Banks Loans and advances to -33% 1,193 804 Funding from central banks -11% 930 830 banks Debt securit
Slide 57: Consolidated Balance Sheet – ignoring classification of Helix as Held for Sale
Consolidated Balance Sheet – ignoring classification of Helix as Held for Sale % % Assets (€ mn) change 31.12.17 30.06.18 Liability and Equity (€ mn) change 31.12.17 30.06.18 Cash and balances with 23% 3,394 4,163 Deposits by banks 3% 495 512 Central Banks Loans and advances to -33% 1,193 804 Fundin
Slide 58: Core Cypriot business
Core Cypriot business Market shares2 Strong market shares in resident and non-resident deposits 2 Loans Loans new basis Deposits Residents Non-residents 39.4% 39.5% 38.8% 39.1% 38.7% 39.2% 37.3% 37.1% 38.6% 36.8% 37.4% 35.8% 35.3% 34.5% 37.5% 37.5% 37.1% 37.1% 36.7% 34.1% 35.1% 33.2% 34.1% 30.9% 31.
Slide 59: Income Statement bridge for 1H2018
Income Statement bridge1 for 1H2018 € mn Underlying basis Reclassification Statutory Basis Net interest income 249 - 249 Net fee and commission income 84 84 Net foreign exchange gains and net gains on other financial instruments and disposal/dissolution of 42 14 56 subsidiaries and associates Insura
Slide 60: Analysis of Interest Income and Interest Expense
Analysis of Interest Income and Interest Expense Analysis of Interest Income 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 2Q2018 Loans and advances to customers 195 200 180 170 163 164 Loans and advances to banks and central banks 3 2 3 3 4 1 Investments available-for-sale 4 5 5 6 - - Investment at amortised
Slide 61: Cyprus: Income Statement by business line for 1H2018
Cyprus: Income Statement by business line for 1H2018 Consumer SME Corporate International Wealth & Total € mn RRD REMU Insurance Treasury Other Banking Banking Banking Banking Markets Cyprus Net interest income 95 20 49 27 4 42 (8) 0 7 (4) 232 Net fee & commission income 23 5 8 32 1 5 0 (3) 1 8 80 O
Slide 62: Risk Weighted Assets
Risk Weighted Assets Risk weighted assets by Geography 30.06.2018 € mn) 30.06.17 30.09.17 31.12.17 31.03.18 30.06.18 Helix BOC UK pro forma for Helix and UK sale2 Cyprus 16,128 16,098 16,011 16,711 16,051 (1,460) 14,591 Russia 32 30 27 25 23 23 United Kingdom 869 842 922 989 1,051 (1,018) 33 Romania
Slide 63: Regulatory Capital
Regulatory Capital Equity and Regulatory Capital € mn) 30.06.17 30.09.17 31.12.17 31.03.18 30.06.18 Shareholders’ equity 2,543 2,562 2,586 2,298 2,243 CET1 capital 2,142 2,1451 2,184 2,1641 2,060 Tier I capital 2,142 2,1451 2,184 2,1641 2,060 Tier II capital 248 247 266 262 265 Total regulatory capi
Slide 64: Capital Requirements Framework
Capital Requirements Framework Evolution of Capital Requirements CET1 Requirements 9.500% 9.375% 10.500%6 Total 15.4% TC (%) 14.00% 13.00% 12.88% 0.5% O-SII Buffer - (transitional) 1.4% Tier 2 (%) 1.25% Capital Conservation 1.875% 2.50% Buffer (“CCB”)4 3.75% 3.0% TBD Pillar 2R2,3 Note: EU average CE
Slide 65: Buffer to MDA Restrictions Level & Distributable Items
Buffer to MDA Restrictions Level & Distributable Items Maximum Distributable Amount Distributable Items at Holding Company level Pro Forma3 CET1 Ratios (Post Helix, Sale of BoC UK) 14.0% • Capital reduction plan proposed in the August 2018 AGM4 objective is to create distributable items1. 140bps •
Slide 66: Analysis of Deposits by Currency and by Type
Analysis of Deposits by Currency and by Type Deposits by Currency (€bn) 30 June 2018 (%) (€ bn) EUR USD GBP Other Currencies 0.8% 18.43 17.85 18.00 16.48 17.31 0.15 16.51 16.54 16.58 0.17 0.18 11.8% 0.18 2.17 0.15 0.22 0.14 2.11 2.12 0.15 1.98 0.31 1.69 1.69 1.81 1.58 1.56 1.74 1.58 8.6% 1.76 2.20 2
Slide 67: Analysis of Deposits by Sector and cost of deposits
Analysis of Deposits by Sector and cost of deposits Deposits by customer Sector Corporate SME Retail 18.00 18.43 (€ bn) 17.85 17.31 16.51 16.54 16.58 9.36 9.73 10.31 10.79 11.27 8.98 9.06 0.80 0.80 0.87 0.90 0.91 0.92 0.97 6.73 6.68 6.35 6.68 6.63 6.29 6.19 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18
Slide 68: Reduction in Overseas Non-Core Exposures
Reduction in Overseas Non-Core Exposures Overseas non-core exposures1 (€ mn) Russia: Net exposure Romania: Net exposure Serbia: Net exposure Greece: Net exposure 588 518 • The Group continues its efforts for further deleveraging and disposal of non-essential assets and operations in Greece, Romania
Slide 69: BOC UK - Agreement for the sale of UK bank
BOC UK -Agreement for the sale of UK bank1, consideration of c.€117 mn Balance Sheet (€ mn) % % Assets (€ mn) change 31.12.17 30.06.18 Liability and Equity (€ mn) change 31.12.17 30.06.18 Cash and balances with -41% 404 239 Deposits by banks Central Banks Loans and advances to 103% 36 73 Funding fro
Slide 70: BOC UK - Income Statement Review
BOC UK1 - Income Statement Review € mn 1H2018 1H2017 2Q2018 1Q2018 qoq % yoy % Net Interest Income 23 18 12 11 11% 23% Non interest income 3 4 2 1 Total income 26 22 14 12 11% 19% Total expenses (21) (18) (12) (9) 22% 20% Profit before provisions and impairments 5 4 2 3 -26% 14% Loan loss provisions
Slide 71: Glossary & Definitions
Glossary & Definitions Comprise (i) provisions for impairment of customer loans and advances, (ii) the fair value adjustment on initial recognition of loans acquired from Laiki Bank and Accumulated provisions on loans classified at FVPL, and (iii) provisions for off-balance sheet exposures disclosed
Slide 72: Glossary & Definitions
Glossary & Definitions Effective yield of liquid Interest Income on liquids after hedging, over average liquids (Cash and balances with central banks, placements with banks and bonds). Historical information assets has been adjusted to take into account hedging Value of on-boarded assets is set at a
Slide 73: Glossary & Definitions
Glossary & Definitions Non-interest income comprises Net fee and commission income, Net foreign exchange gains and net gains on other financial instruments and Non-interest income disposal/dissolution of subsidiaries and associates, Insurance income net of claims and commissions, Net gains from reva
Slide 74: Glossary & Definitions
Glossary & Definitions qoq Quarter on quarter change Restructured loans Restructuring activity within quarter as recorded at each quarter end and includes restructurings of NPEs, performing loans and re-restructurings Risk adjusted yield Interest Income on Loans net of provisions/Net Loans RRD Restr
Slide 75: Disclaimer
Disclaimer This document contains certain forward-looking statements which can usually be identified by terms used such as “expect”, “should be”, “will be” and similar expressions or variations thereof. These forward-looking statements include, but are not limited to, statements relating to the Grou
Bank of Cyprus Holdings — H1 2018 Earnings Presentation on 6ix