Bank of Cyprus Group...operations of Cyprus Popular Bank Public Co Ltd Decree of 2013. Hence the...

1

Preliminary Financial Results*

for the year ended 31 December 2013

28 February 2014

Bank of Cyprus Group

Preliminary Financial Results FY2013 – Highlights

Income Statement Review

Restructuring

Balance Sheet Review

Appendices

* The Preliminary Financial Results have not been audited by the Group’s external auditors

2

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 such terms. By their nature, forward-looking statements involve risks and uncertainties and assumptions about the Group that could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements. These risks, uncertainties and assumptions could adversely affect the outcome and financial effects of the plans and events described herein. We have based these forward-looking statements on our current expectations and projections about future events. Any statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Readers are cautioned not to place undue reliance on forward-looking statements, which are based on facts known to and/ or assumptions made by the Group only as of the date of this presentation. We assume no obligation to update such forward -looking statements or to update the reasons that actual results could differ materially from those anticipated in such forward-looking statements. This presentation does not constitute an offer to sell, or a solicitation of an offer to buy, any security in any jurisdiction in the United States, to United States Domiciles or otherwise. The delivery of this presentation shall under no circumstances imply that there has been no change in the affairs of the Group or that the information set forth herein is complete or correct as of any date. This presentation shall not be used in connection with any investment decision regarding any of our securities, which should only be made based on expressly authorised materials from us identified as such, nor in connection with any decision whether or how to vote on any matter submitted to our stockholders. The securities issued by Bank of Cyprus Public Company Ltd have not been, and will not be, registered under the US Securities Act of 1933 (“the Securities Act”), or under the applicable securities laws of Canada, Australia or Japan.

Following the Eurogroup decisions to recapitalise Bank of Cyprus (Bank) via a bail-in of depositors, the Bank was placed

under resolution from 25 March 2013 until 30 July 2013, a period during which it was recapitalised and restructured in

accordance with the decrees issued by the Central Bank of Cyprus in its capacity as Resolution Authority.

In this context, the banking and leasing operations of the Bank in Greece were sold to Piraeus Bank S.A. as per the Sale of

Greek Operations of Bank of Cyprus Public Company Ltd Decree of 2013. Hence, the financial results of the Greek

operations are presented as discontinued operations.

The Bank acquired the operations of Cyprus Popular Bank Public Co Ltd (Laiki Bank) in Cyprus as per the Sale of certain

operations of Cyprus Popular Bank Public Co Ltd Decree of 2013. Hence the financial results of Laiki Bank are fully

consolidated as from the date of the transfer, 29 March 2013. It is noted that the fair value of the transferred assets and

liabilities for the purposes of accounting for the business combination of the Group is provisional in accordance with IFRSs.

Disclaimer

3

Preliminary Financial Results FY2013 Highlights



Appendices


Restructuring

Following the Eurogroup decisions to recapitalise Bank of Cyprus via a bail-in of depositors, the Bank was placed under

resolution from 25 March 2013 until 30 July 2013, a period during which it was recapitalised and restructured in accordance

with the decrees issued by the Central Bank of Cyprus in its capacity as Resolution Authority. Due to the corporate actions

that took place during this period, it is not possible to compare figures and results of the Group with past financial periods.

4

• Loss from continuing operations €77 mn for 4Q2013; including restructuring costs of €16 mn,

loss attributable to shareholders €93 mn

• Loss from continuing operations €426 mn for FY2013; including restructuring costs of €158

mn and €1.456 mn losses from discontinued operations and from disposal of Greek operations,

loss attributable to shareholders €2.040 mn

• Profit before impairments, restructuring costs and discontinued operations €184 mn for

4Q2013 (€622 mn for FY2013)

• Net interest income €274 mn for 4Q2013 (€999 mn for FY2013) and Net Interest Margin 3,87%

for 4Q2013 (3,62% for FY2013)

• Cost to income ratio at 47% for FY2013

• Deposit base showing signs of stabilisation during 4Q2013, with deposits in Cyprus reduced

by 2% (compared to a 10% reduction during 3Q2013)

• ELA funding reduced to €9,56 bn; ECB funding at €1,40 bn

• 90+ DPD* showing signs of stabilisation, with growth rate contained to 0,2% for 4Q2013

(compared to growth rate of 18% during 3Q2013)

• Core tier 1 capital ratio sustained at 10,2%; Ratio affected negatively by a 2% reduction in core

tier 1 capital (a negative impact of 0,2 percentage points) and benefited by a 2% reduction in RWA

(a positive impact of 0,2 percentage points)

* 90+ DPD are loans with a specific provision (i.e. impaired loans) and loans past-due for more than 90 days as per IFRS.

Preliminary Financial Results FY2013 Highlights

5

• Integration of ex-Laiki business on track

• Branches in Cyprus reduced to 130 from 203 in May 2013; another 3 branches to be closed

during 2014

• Next milestone for integration process is the IT banking system unification scheduled to be

completed by end of 1H2014

• Implementation of new organisational structure for simplification and for organising along

functional, domestic, international and restructuring lines

• Establishment of Restructuring and Recoveries Division to focus management on collections

and recovery efforts in line with the recent Directive on Arrears Management

• Improving liquidity position and stabilizing signs of deposit base allowed the release of the

6-month blocked deposits maturing end-January 2014

• Deleveraging progressing well with the sale of the Ukrainian business; though a negative impact

of 0,3% on Core tier 1 capital ratio, the transaction facilitates the de-risking of balance sheet and

eliminates future potential risks relating to the Group’s investment in Ukraine given political and

economic conditions in the country

Recent Developments

6




Restructuring


Appendices

7


Selected lines from Income Statement (€ mn ) FY2013 FY2012 Change 4Q2013 3Q2013 Change

Net Interest income 999 702 +42% 274 296 -8%

Net fee & commission income 169 173 -2% 43 41 +6%

Other income 6 45 -87% (3) 24 -113%

Total income 1.174 920 +28% 314 361 -13%

Total expenses (552) (545) +2% (130) (137) -5%

Profit before impairments, restructuring costs and

discontinued operations 622 375 +66% 184 224 -18%

Provisions for impairment of loans and advances (1.067) (1.339) -20% (268) (261) +3%

Share of profit/(loss) from associates 2 - - - (1) -

Tax 5 88 - 2 1 -

Loss attributable to non-controlling interests 12 9 - 5 2 -

Loss after tax and before restructuring costs and

discontinued operations (426) (867) -51% (77) (35) +118%

Restructuring costs (158) (10) - (16) (107) -

Loss from discontinued operations, on disposal of Greek

operations, impairment and tax on GGBs and impairment of

goodwill

(1.456) (1.337) - - - -

Loss after tax (2.040) (2.214) -8% (93) (142) -34%

Net interest margin 3,62% 2,94% +68 b.p. 3,87% 4,02% -15 b.p.

Cost-to-Income (%)* 47% 59% -12 p.p. 41% 38% +3 p.p.

*Excluding the restructuring costs, the losses from discontinued operations and from the disposal of the Greek operations.

b.p. = basis points, p.p. = percentage points ; 100 b.p. = 1 p.p.

8

Net Interest Income (NII) and Net Interest Margin (NIM)

317

402 387

1H2013* 3Q2013 4Q2013

FY2013: 362

296 274

1H2013* 3Q2013 4Q2013

Net Interest Income (€ mn)

Net Interest Margin (bp)

429

* Information for 1Q2013 and 2Q2013 is not available as it has not been possible to publish the financial results for the three months ended 31 March 2013.

• 4Q2013 NII at €274 mn (compared to €296 mn for

3Q2013), mainly due to lower customer spread (i.e.

lower yield on loans); FY2013 NII at €999 mn

• 4Q2013 Group NIM at 3,87% (compared to 4,02%

for 3Q2013) due to lower net interest income;

FY2013 NIM at 3,62%

• NII and NIM continue to be affected by conditions in

Cyprus and by the fact that 36% of assets is funded

by ELA and ECB funding

9

Analysis of Non Interest Income

173 169

-3

5 63 65

-15 -64

218 175

FY2012 FY2013

Other income/(expense)Insurance incomeFX income & Net income from financial instrumentsFee and commission Income

Non Interest Income (€ mn) • FY2013 Non interest income of €175 mn

• 4Q2013 Non interest income of €40 mn

compared to €65 mn for 3Q2013

• 6% increase in fee and commission income

during 4Q2013 relating to higher

commissions in Cyprus due to seasonality

• Recurring income from insurance business

reflecting the Group’s leading position in the

insurance business in Cyprus

• FY2013 other income negatively affected by

losses of €78 mn on the revaluation of

investment properties (primarily

repossessed assets)

Quarterly Non Interest Income (€ mn)

41 43

9 23 12 14

3

-40

65 40

3Q2013 4Q2013

Other income/(expense)Insurance incomeFX income & Net income from financial instrumentsFee and commission Income

10

Total expenses

294 322

251 230

545 552

FY2012 FY2013

Other operating expenses Staff costs

Total expenses (€ mn )

Group Cost to income ratio

Quarterly Total expenses (€ mn )


57%

49% 47%

1H2013* 9M2013 FY2013

83 66

54 64

137 130

3Q2013 4Q2013

Other operating expenses Staff costs

-21%

-5%

• 4Q2013 Total expenses of €130 mn

compared to €137 mn for 3Q2013; 5%

reduction reflecting primarily the impact of

the VRS, with staff costs reduced by 21%

during 4Q2013 to €66 mn

• Taking into account the impact of the VRS

and salary cuts, the cost-to-income ratio has

been reduced to 47% for FY2013 (about

40% for the 2H2013 compared to 57% for

1H2013)

11

Income Statement Highlights

Income Statement Highlights (€ mn )

429

70

499

-285

214

-538

-314

296

65

361

-137

224

-261

-35

274

40

314

-130

184

-268

-77

Net interestincome

Non interestincome

Total income Total expenses Profit beforeimpairments

Provisions forimpairments

Loss fromcontinuingoperations

1H2013* 3Q2013 4Q2013


• 4Q2013 Total income of €314 mn, compared to €361 mn for 3Q2013; negatively affected by reduced

net interest income and by the losses related to the revaluation of investment properties

• 4Q2013 Profit before impairments of €184 mn, compared to €224 mn for 3Q2013

• 4Q2013 Loss from continuing operations of €77 mn, compared to a loss of €35 mn for 3Q2013

12




Restructuring


Appendices

13

• Funding structure dented by the bail-in and the

acquisition of Laiki

• Deposits accounted for 49% of total assets at 31

December 2013, compared to 92% a year earlier

• At 31 December 2013 Eurosystem funding at €10,96

bn, comprising ELA of €9,56 bn and ECB funding of

€1,4 bn; Between April 2013 and 31 December 2013,

the Bank reduced the Eurosystem funding by €450

mn from €11,4 bn (comprising solely ELA) to

€10,96 bn and at the same time managed to absorb

a significant reduction in its deposit base

11,11 9,86 9,56

1,30 1,40

11,11 11,16 10,96

34% 36% 36%

30.06.13 30.09.13 31.12.13

ECB funding (€ bn)

ELA funding (€ bn) ECB + ELA funding % Total assets

Funding from Central Banks

Funding Structure

0,34 2,92 2,79 2,75 2,25

1,96 1,98 1,68

11,11 9,86 9,56

1,30 1,40

28,44

16,97 15,47

14,97

31,03

32,96 31,40

30,36

31.12.12 30.06.13 30.09.13 31.12.13

Total equity Other liabilities ELA

ECB funding Customer deposits

Analysis of Liabilities and Equity (€ bn)

-11%

-9%

-5%

-3%

-3%

-3%

14

Loans to deposits ratio

23,8 22,6 21,8 17,0 15,5 15,0

140% 146% 145%

30.06.13 30.09.13 31.12.13

Net loans (€ bn) Customer deposits (€ bn)

Loans to deposits ratio

• During 4Q2013, the Cypriot operations

experienced customer inflows and the deposit

base showed signs of stabilisation, with the

deposit reduction contained to 2% during the

quarter, compared to a 10% reduction in 3Q2013

• Overall, Group deposits declined by 3% during

4Q2013, compared to a reduction of 9% during

3Q2013

• Loans to deposits ratio at 145% at 31 December

2013

Customer Deposits

Deposits by Geography (€ mn )

14.417 13.002 12.706

1.153

1.078 918

1.295

1.285 1.244

105

103 103

16.970

15.468 14.971

30.06.13 30.09.13 31.12.13

Cyprus Russia UK Other

-10% -2%

-9%

-3%

15

Loan Quality

Problem Loans (€ bn)

2,95 3,43 4,05

4,82

6,66

8,25

10,21

13,13 14,04

4,97 5,07 5,13 6,45

7,69

11,01 12,98 13,00

31.12.11 31.03.12 30.06.12 30.09.12 31.12.12 30.06.13 30.09.13 31.12.13

NPLs (Old definition)

NPLs (New definition)

90+ DPD

Quarterly change in problem loans (€ bn)

1,97

0,02

2,92

0,91

3Q2013 4Q2013

90+ DPD

NPLs (New definition)

• Loan quality challenges continued in 4Q2013.

90+ DPD* show signs of stabilisation, but new-

definition NPLs continue to rise as restructured

loans remain classified as NPLs for longer

• 90+ DPD totalled €13.003 mn at 31 December

2013 (vs. €12.983 mn at 30 September 2013),

with 4Q2013 growth rate contained to a mere

0,2% (vs. 3Q2013 growth rate of 18%)

• NPLs growth rate decelerated to 7% for

4Q2013 (vs. 3Q2013 growth rate of 29%)

qoq:+0,2% qoq:+18%

qoq:+29% qoq:+7%

* 90+ DPD are loans with a specific provision (i.e. impaired loans) and loans past-due for more than 90 days as per IFRS.

16

Group loan quality indicators

30% 31% 40% 35% 48% 42% 37% 38%

17% 18% 18% 23%

27%

39%

47% 49%

31.12.11 31.03.12 30.06.12 30.09.12 31.12.12 30.06.13 30.09.13 31.12.13

90+ DPD provision coverage**

90+ DPD ratio*

Accumulated provisions

1,5 1,6 2,0 2,2

3,7 4,6 4,8 5,0

5,2% 5,5% 7,1%

8,0%

13,1%

16,2% 17,6%

18,6%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

0

1

2

3

4

5

6

31.12.11 31.03.12 30.06.12 30.09.12 31.12.12 30.06.13 30.09.13 31.12.13

Accumulated provisions (€ bn)

Provisions % Gross loans

• 90+ DPD ratio at 49%

• 90+ DPD provision coverage

improved to 38%; Taking into

account tangible collateral the 90+

DPD are fully covered

• Accumulated provisions at €4,98 bn

or 18,6% of gross loans

• Conservative provisioning

assessment took into consideration

the further expected decline in

collateral values following March

2013 events

• Assumptions have been made

about the future changes in

property values in Cyprus, as well

as the timing for the realisation of

the collateral and for taxes and

expenses on the repossession and

subsequent sale of the collateral

Loan Quality

* 90+ DPD ratio is the ratio of 90+ DPD over gross loans. ** 90+ DPD provision coverage is defined as accumulated provisions as a

percentage of 90+ DPD.

17

29%

36%

30.06.13

Loans more than 90 days past due or Loans restructured and more than 90 days past due

48%

44%

4%

New definition of NPLs

• New definition of NPLs as from 1 July 2013; new definition NPLs ratio at 53% at 31 December 2013

• With restructured loans remaining classified as NPLs for a longer period, there will be a growing difference

between 90+ DPD and NPLs in the future

• NPLs provisioning coverage ratio at 35% at 31 December 2013; taking into account tangible collateral, NPLs

are fully covered

• At 31 December 2013, the NPLs ratio comprises Loans restructured and less than 90 days past due (6%

of gross loans) and Loans more than 90 days past due or Loans restructured and more than 90 days

past due (47% of gross loans)

30.09.13 30.09.13

48% Old definition

New definition

Loans restructured and less than 90 days past due

31.12.13 31.12.13

53%

Loan Quality

53%

47%

6%

18

Capital adequacy ratios

10,5% 10,5% 10,7% 10,2% 10,2% 10,4% 10,2% 10,2% 10,6%

Core tier 1 capitalratio

Tier 1 capital ratio Total capital ratio

30.06.13 30.09.13 31.12.13

• Core tier 1 capital ratio sustained at 10,2%, at the

same level as at 30 September 2013. Although

negatively affected by a 2% reduction in the core

tier 1 capital during the fourth quarter of 2013, the

core tier 1 capital ratio was sustained at 10,2%

due to a 2% decrease in RWA.

• Aiming to preserve and enhance capital adequacy

by retaining internally generated capital, while the

activity for restructuring and disposal of non-core

assets will be driven by risk mitigation and capital

considerations

(€ mn) 30.06.13 30.09.13 31.12.13

Shareholders’ equity 2.838 2.690 2.671

Core tier I capital* 2.478 2.334 2.296

Hybrid capital (Tier I) 0 0 0

Tier I capital 2.478 2.334 2.296

Tier II capital 42 59 76

Total regulatory Capital 2.520 2.392 2.372

Capital position

*Including €60 mn of shares subject to interim orders

Analysis of Risk weighted assets (RWA) (€ bn)

21,12 21,05 20,41

0,55 0,08 0,01

1,84 1,84 2,06

23,51 22,97 22,48

30.06.13 30.09.13 31.12.13

Credit risk Market risk Operational risk

-2% -2%

19

2.334 2.296

+184 -268 -16 +62

Evolution of Core tier 1 capital ratio in 4Q2013

4Q2013 Loss from

continuing

operations before

tax and non-

controlling interest

€84 mn

Core tier 1

capital

€ mn

30.09.13

Profit before

impairments

€ mn

Impairments

€ mn Restructuring

costs

€ mn

Core tier 1

capital

€ mn

31.12.13

10,2% -0,4% -0,1% +0,3% +0,2% 10,2% Core tier 1

capital ratio

22.970 22.478 Risk weighted

Assets € mn -2%

-2%

RWA

reduction*

* Reduction in Risk weighted assets due to deleveraging and optimisation of risk weighted assets

Other items**

€ mn

** Mainly due to other equity movements.

20



Restructuring


Appendices

Restructuring

21

Rebuilding trust and confidence of both depositors and investors

Preserving the Bank’s status as the cornerstone of the domestic economy, continuing to support both businesses and households

Building a resilient institution, able to effectively manage its portfolio of assets and withstand further external shocks and economic turbulence

Smoothly integrating Laiki’s operations, maximising impact on profitability for the combined entity through the realisation of synergies

Enhance the capital adequacy of the Group by internally generating capital through profitability, deleveraging and disposal of non-core assets

Restructuring Plan defines actions to create a safer, smaller, more focused

institution capable of supporting the recovery of the Cypriot economy

Restructuring Plan charts the future strategic direction

22

Cost to income ratio of Cyprus operations

Branch rationalisation – (branch numbers)

203 190 158 142 133 130 127

Ma

y-1

3

Ju

n-1

3

Sep

-13

No

v-1

3

Dec-1

3

Feb

-14

Du

rin

g2

01

4

-36%

• Integration of ex-Laiki business on track

• Branch network in Cyprus reduced to 130 branches

from 203 branches in May 2013; 3 branches

expected to close during 2014.

• Next milestone for the integration process is the

unification of the IT banking system (by end of the

first half of 2014). This will facilitate the further

utilisation of synergies and cost minimisation

• Staff costs reduced through salary cuts and a

Voluntary Retirement Scheme (VRS). FT Employee

reduction by 24% and staff costs by 35% on an

annual basis

• Cost to income ratio of the Cyprus operations at 38%

for FY2013

• Changes in organisational structure for simplification

and for organising along functional, domestic,

international and restructuring lines

• Establishment of Restructuring and Recovery

Division to focus management on collections and

recovery efforts

Restructuring of Cypriot operations

50%

43%

38%

1H2013* 9M2013 FY2013


23

New organisational structure

INTERNATIONALDOMESTIC CORERESTRUCTURINGFUNCTIONS

REMUNERATION &

HUMAN RESOURCES

COMMITTEE

BOARD OF DIRECTORS

NOMINATIONS &

CORPORATE GOVERNANCE

COMMITTEE

RISK COMMITTEE

AUDIT COMMITTEE

STRATEGY &

RESTRUCTURING

COMMITTEE

DIRECTOR

INTERNAL

AUDIT

DIRECTOR OF

COMPLIANCEGROUP CHIEF EXECUTIVE

ASSET & LIABILITY

COMMITTEE

EXECUTIVE

COMMITTEE

Director

International

Operations

Head of

Restructuring

& Recoveries

Director

Consumer

& SME

Banking

Director

Corporate

Banking

Insurance

Director

International

Banking

Services

Director

Wealth,

Asset Mgt &

Brokerage

Chief

Operating

Officer

Chief

Risk

Officer

HR DirectorFinance

Director

STRUCTURE CHART – BANK OF CYPRUS GROUP

24

• Most significant change is the establishment of a strong restructuring and recovery area. The Bank

had a fragmented approach to the management of stressed, distressed and delinquent clients

• A structure that houses these clients under one umbrella unit, creating a centralized arrears management

area that allows the Bank to manage clients in a much more robust, focused and logical manner

• The creation of the Restructuring and Recoveries Division (RRD) is a major step in the Bank’s recovery

path, as swiftly and professionally addressing problem lending positions is absolutely critical

• The Special Project Division (as per the Restructuring Plan) has evolved into the Major Corporate

Management Department and is now part of the RRD. Hence, the RRD handles all activity relating to

(a) Exposures greater than €100 mn, (b) debt restructuring and (c) debt collection.

• This Division will become very much the high powered engine room of the recovery, driving down NPL

levels within the Bank and removing provisions from its balance sheet.

• The RRD has developed end to end strategies and responsibility for managing delinquent customers in

each business line. Delinquent portfolio segments based on risk profile and exposure and tailored

strategies for collections and restructurings have been defined accordingly.

The establishment of a centralised arrears management unit is in line with the recently issued Directive on

Arrears Management of 2013 issued by the Central Bank of Cyprus. The Directive includes inter alia a Code of

Conduct on the handling of borrowers in financial difficulties, the development of a robust arrears

management strategy, the utilisation of relevant, effective and sustainable debt restructuring techniques and

options.

Division handles delinquent customers in all sectors

Effective NPL recovery and management is vital for the Bank’s future

Creation of Restructuring and Recoveries Division (RRD)

25

Managing loan quality deterioration – Recovery of NPLs

Integrating Laiki Bank – Achieving operational efficiencies

Enhance capital position while making progress on non-core disposals

Managing liquidity – Defending deposit franchise – Regaining trust

Exogenous factors such as the failure to implement the policy reforms requested by Troika that could affect and/or delay the

disbursement of the financial assistance to Cyprus, a deeper and prolonged economic recession, further significant increase in

unemployment, a sharper reduction in real estate prices, as well as factors that could dent the fragile confidence of customers

and delay the return of confidence to the Cyprus banking system could derail and affect the execution of the Restructuring Plan

Main Challenges

26

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

Since 19 March 2013, the shares of the Bank have been suspended from trading on ATHEX and CSE

Constantinos Pittalis, Investor Relations Manager, Tel: +35722122466, Email: [email protected]

Irene Constantinou, Investor Relations, Tel: +35722122121, Email: [email protected]

Elena Hadjikyriacou, Investor Relations, Tel: +35722122239, Email: [email protected]

Investor Relations Contacts

Group Finance Director Dr. Chris Patsalides, Tel: +35722122456, Email: [email protected]

www.bankofcyprus.com

Chief Financial Officer Eliza Livadiotou, Tel: +35722122344, Email: [email protected]

mailto:[email protected]





27

Appendices



Restructuring


Appendices

28

Group Income Statement (€ mn) FY2013 FY2012 yoy % 4Q2013 3Q2013 qoq%

Net interest income 999 702 +42% 274 296 -8%


Net foreign exchange income and gains/(losses) from financial instruments 5 (3) - 23 9 +169%

Insurance income net of insurance claims 65 63 +3% 14 12 +19%

Other (expenses)/income (64) (15) +326% (40) 3 -

Total income 1.174 920 +28% 314 361 -13%

Staff costs (322) (294) +10% (66) (83) -21%

Other operating expenses (230) (251) -8% (64) (54) +18%

Total expenses (552) (545) +2% (130) (137) -5%

Profit before impairments, restructuring costs and discontinued operations 622 375 +66% 184 224 -18%

Provisions for impairment of loans and advances (1.067) (1.339) -20% (268) (261) +3%

Share of profit/(loss) from associates 2 - - - (1) -

Loss before tax, restructuring costs and discontinued operations (443) (964) -54% (84) (38) +122%

Tax 5 88 - 2 1 -

Loss attributable to non-controlling interests 12 9 - 5 2 -

Loss after tax and before restructuring costs and discontinued operations (426) (867) -51% (77) (35) +118%

Restructuring costs (158) (10) - (16) (107) -

Loss from discontinued operations (90) (789) - - - -

Loss on disposal of the Greek operations (1.366) - - - - -

Impairment of GGBs net of tax and impairment of goodwill - (548) - - - -

Loss after tax (2.040) (2.214) -8% (93) (142) -34%

29

€ mn % yoy 31.12.13 31.12.12

Cash and balances with

Central Banks -3% 1.240 1.272

Placements with banks -27% 1.290 1.769

Debt securities, Treasury

bills and equity

investments

+89% 3.537 1.870

Net loans and advances to

customers -11% 21.764 24.375

Other assets +45% 2.526 1.746

Total assets -2% 30.357 31.032

€ mn % yoy 31.12.13 31.12.12

Amounts due to banks -42% 196 341

Funding from Central Banks - 10.956 -

Repurchase agreements -2% 594 608

Customer deposits -47% 14.971 28.442

Debt securities in issue -98% 1 45

Other liabilities -21% 889 1.128

Subordinated loan stock -96% 5 133

Total liabilities -10% 27.612 30.697

Share capital +161% 4.684 1.795

Shares subject to interim orders - 59 -

Share premium - - 428

CECS* - - 429

Revaluation and other reserves - 66 106

Accumulated losses - (2.138) (2.500)

Shareholders’ equity +935% 2.671 258

Non controlling interests -4% 74 77

Total equity +719% 2.745 335

Total liabilities and equity -2% 30.357 31.032

*Convertible Enhanced Capital Securities

Consolidated Balance Sheet

30

Loans and Deposits by Geography

Gross Loans by Geography

€ mn 30.06.13 30.09.13 31.12.13

Cyprus 24.219 23.540 23.192

UK 1.527 1.451 1.351

Russia 1.794 1.620 1.429

Other countries* 809 791 771

Group 28.349 27.402 26.743

As % of Group

Cyprus 85,4% 85,9% 86,7%

UK 5,4% 5,3% 5,1%

Russia 6,3% 5,9% 5,3%

Other countries* 2,9% 2,9% 2,9%

Deposits by Geography

€ mn

30.06.13 30.09.13 31.12.13

Cyprus non-IBU 9.665 8.948 8.658

Cyprus IBU 4.752 4.054 4.047

Cyprus – Total 14.417 13.002 12.706

UK 1.295 1.285 1.244

Russia 1.153 1.078 918

Other countries* 105 103 103

Group 16.970 15.468 14.971

As % of Group

Cyprus non-IBU 57,0% 57,8% 57,8%

Cyprus IBU 28,0% 26,3% 27,1%

Cyprus – Total 85,0% 84,1% 84,9%

UK 7,6% 8,2% 8,3%

Russia 6,8% 7,0% 6,1%

Other countries* 0,6% 0,7% 0,7%

* Other countries: Romania and Ukraine

31

24,22 23,54 23,19

1,53 1,45 1,35 1,79 1,62 1,43

0,81 0,79 0,77

28,35 27,40 26,74

30.06.13 30.09.13 31.12.13

Other countries*

Russia

UK

Cyprus

Total

(€ bn)

*Other countries: Romania and Ukraine

Total

(€ bn)

Gross loans by geography

Gross loans by customer type

Analysis of Gross Loans by Geography and customer Type

13,10 12,51 12,24

6,37 6,24 6,12

5,44 5,30 5,37

3,44 3,35 3,01

28,35 27,40 26,74

30.06.13 30.09.13 31.12.13

Consumer Credit

Housing

SMEs

Corporate

32

Total

(€ bn)

* Other countries: Romania and Ukraine

Total

(€ bn)

Deposits by geography

Deposits by type of deposit

12,72 11,27 10,55

0,83 0,88 0,93

3,42 3,32 3,49

16,97 15,47 14,97

30.06.13 30.09.13 31.12.13

Current & demand accounts

Savings accounts

Time deposits

Analysis of Deposits by Geography and by Type

9,67 8,95 8,66

4,75 4,05 4,05

1,30 1,29 1,24

1,15 1,08 0,92

0,1 0,1 0,1

16,97 15,47 14,97

30.06.13 30.09.13 31.12.13

Other countries*

Russia

UK

Cyprus IBU

Cyprus non-IBU

33

Cyprus: Summary income statement and key indicators


(€ mn) FY2013 FY2012 yoy (%) 4Q2013 3Q2013 qoq (%)



Net foreign exchange income and gains/(losses)

from financial instruments 21 (13) -264% 36 11 +249%

Insurance income net of insurance claims 57 53 +7% 12 11 +22%

Other (expenses)/income (19) - - (17) 3 -

Total income 1.025 687 +49% 306 310 -1%

Staff costs (247) (205) +21% (48) (66) -27%


Total expenses (394) (377) +5% (86) (104) -16%

Profit before provisions 631 310 +104% 220 206 +7%

Provisions for impairment of loans and advances (856) (1.186) -28% (159) (240) -34%

Share of profit/(loss) from associates 2 - - (1) (0) -

(Loss)/profit before tax (223) (876) -75% 60 (34) +278%

Tax 3 43 - - (1) -

Loss/(profit) attributable to non-controlling interests 1 2 - (1) 0 -

(Loss)/profit after tax and before restructuring

costs and discontinued operations (219) (831) -74% 59 (35) +270%

Cost to income ratio 38% 55% -17 p.p. 28% 33% -5 p.p.

34

10,55 10,15 10,11

5,35 5,28 5,20

5,33 5,20 5,28

2,99 2,91 2,60

24,22 23,54 23,19

30.06.13 30.09.13 31.12.13

Consumer Credit

Housing

SMEs

Corporate

Cyprus Loans by customer type (€ bn)

Loans and Deposits in Cyprus

9,67 8,95 8,66

4,75 4,05 4,05

14,42 13,00 12,71

30.06.13 30.09.13 31.12.13

IBUs

Non-IBUs

Cyprus Deposits (€ bn)

35

(€ mn) FY2013 FY2012 yoy (%) 4Q2013 3Q2013 qoq (%)

Net interest income 97 120 -19% 22 23 -6%

Net fee & commission income 28 33 -16% 7 7 -3%


from financial instruments 4 6 -33% 0 1 -

Other income/(expenses) - 1 - (1) 0 -

Total income 129 160 -20% 28 31 -13%

Staff costs (51) (62) -17% (12) (11) -1%


Total expenses (101) (114) -11% (26) (22) +14%

Profit before provisions 28 46 -41% 2 9 -83%

Provisions for impairment of loans and advances (79) (89) -11% (27) (17) +62%

Loss before tax (51) (43) +21% (25) (8) +216%

Tax 7 1 - 2 1 -

Loss attributable to non-controlling interest 11 7 - 6 1 -

Loss after tax and before restructuring costs

and discontinued operations (33) (35) -4% (17) (6) +234%

Cost to income ratio 79% 71% +8 p.p. 95% 73% +22 p.p.


Russia: Summary income statement and key indicators

36

1,89 2,00

2,02 1,79

1,62 1,43

31.12.10 31.12.11 31.12.12 30.06.13 30.09.13 31.12.13

Loans by sector

Corporate 54%

SMEs 18%

Mortgages 3%

Consumer Credit 25%

Russian Loans (€ bn)

Russian Deposits (€ bn)

1,12 1,29 1,25

1,15 1,08 0,92

31.12.10 31.12.11 31.12.12 30.06.13 30.09.13 31.12.13

Russian operations

37

(€ mn) FY2013 FY2012 yoy (%) 4Q2013 3Q2013 qoq (%)


Net fee & commission income 5 4 +8% 1 1 -27%


from financial instruments 1 2 -68% (2) 2 -

Other income 0 0 - (0) 0 -

Total income 35 28 +20% 4 13 -74%

Staff costs (10) (10) - (3) (3) -11%

Other operating expenses (14) (9) +47% (2) (3) -34%

Total expenses (24) (19) +22% (5) (6) -23%

Profit before provisions 11 9 +16% (1) 7 -112%

Provisions for impairment of loans and advances (21) (12) +70% (5) 1 -698%

(Loss)/profit before tax (10) (3) +213% (6) 8 -167%

Tax (1) 1 - (0) 0 -


and discontinued operations (11) (2) +442% (6) 8 -174%

Cost to income ratio 69% 68% +1 p.p. 127% 43% +84 p.p.


UK: Summary income statement and key indicators

38

1,08 1,04 0,83 0,74 0,73 0,72

0,79 0,72 0,63

1,08 1,04 0,83

1,53 1,45 1,35

31.12.10 31.12.11 31.12.12 30.06.13 30.09.13 31.12.13

Loans by sector

Corporate 52%

SMEs 44%

Mortgages 2%

Consumer Credit

2%

UK Loans (€ bn)

UK Deposits (€ bn)

1,26

1,21 1,22

1,30 1,29

1,24

31.12.10 31.12.11 31.12.12 30.06.13 30.09.13 31.12.13

UK operations

ex-Laiki UK loans

39

(€ mn) FY2013 FY2012 yoy (%) 4Q2013 3Q2013 qoq (%)

Net interest income 39 46 -12% 7 8 -9%

Net fee & commission income 4 3 +54% 1 2 -53%


from financial instruments (21) 2 - (11) (5) -

Insurance income net of insurance claims 8 10 -20% 1 1 -

Other expenses (45) (16) +197% (23) 0 -

Total income (15) 45 -134% (25) 6 -517%

Staff costs (14) (17) -28% (3) (3) 1%

Other operating expenses (19) (18) +16% (9) (2) +233%

Total expenses (33) (35) -7% (12) (5) +119%

Profit before provisions (48) 10 -608% (37) 1 -

Provisions for impairment of loans and advances (111) (52) +114% (77) (5) -

Share of profit from associates - - - 1 (0) -

Loss before tax (159) (42) +275% (113) (4) -

Tax (4) 44 -111% 0 1 -


and discontinued operations (163) 2 - (113) (3) -

Other countries*: Summary income statement

* Other countries: Romania, Ukraine, Greece

40

90+ DPD by Geography

90+ DPD by Geography (€ bn)

40

,9%

49

,8%

50

,4%

25

,6%

28

,9%

31

,7%

16

,4%

23

,9%

28

,5%

48

,8%

57

,3%

60

,5%

30.06.13 30.09.13 31.12.13

Cyprus Russia UK Other countries*

90+ DPD ratios by Geography

* Other countries: Romania and Ukraine.

9,91 11,72 11,70

0,46

0,47 0,45

0,25

0,35 0,39

0,39

0,44 0,46 11,01

12,98 13,00

30.06.13 30.09.13 31.12.13

Cyprus Russia UK Other countries*

41

90+ DPD ratios by customer type

Gross loans by customer type (€ bn)

47,6%

40,9%

20,8%

30,1%

57,9% 52,2%

24,3%

35,7%

58,6% 54,5%

24,0%

39,9%

Corporate SMEs Housing Consumer Credit

30.06.13 30.09.13 31.12.13

13,10

6,37 5,44

3,44

12,51

6,24 5,30

3,35

12,24

6,12 5,37

3,01

Corporate SMEs Housing Consumer Credit

30.06.13 30.09.13 31.12.13

Analysis of loans and 90+ DPD ratios by customer type

42

90+ DPD ratios by economic activity

40,7

%

37,6

%

40,1

% 54,8

%

46,0

%

25,6

% 40,8

%

41,1

%

47,0

%

46,4

%

53,6

% 67,8

%

52,7

%

30,3

%

52,3

%

56,1

%

44,1

%

49,7

%

51,1

%

69,6

%

51,7

%

32,1

%

56,8

%

64,7

% 30.06.13 30.09.13 31.12.13

3,1

2

1,1

1

1,9

3

4,1

5

4,6

1

8,7

3

2,7

8

1,9

2

2,9

9

1,0

6

1,9

2 4

,06

4,5

4

8,4

9

2,4

4

1,9

0

2,8

3

1,0

0

1,8

9

4,2

5

4,2

0

8,5

4

2,3

1

1,7

3

30.06.13 30.09.13 31.12.13

Trade Manufacturing Hotels &

Restaurants

Construction Real estate Private

Individuals

Professional

& other

services

Other

sectors

Gross loans by economic activity (€ bn)

Trade Manufacturing Hotels &

Restaurants

Construction Real estate Private

Individuals

Professional

& other

services

Other

sectors

Analysis of Loans and 90+ DPD ratios by economic activity

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