Bank of Cyprus Group Group Financial Results For the year ended 31 - - PowerPoint PPT Presentation

Bank of Cyprus Group

Group Financial Results

For the year ended 31 December 2019

Group Financial Results for the year ended 31 December 2019

DISCLAIMER

2

Group Financial Results for the year ended 31 December 2019

This presentation has not been audited by the Group’s external auditors. The Group statutory financial statements for the year ended 31 December 2019, upon which the auditors have given an unqualified report, can be found

• n

the website (https://www.bankofcyprus.com/en-GB/investor-relations-new/reports-presentations/financial- results/) This financial information is presented in Euro (€) and all amounts are rounded as indicated. A comma is used to separate thousands and a dot is used to separate decimals. Important Notice Regarding Additional Information Contained in the Investor Presentation The presentation for the Group Financial Results for the year ended 31 December 2019 (the “Presentation”), available on https://www.bankofcyprus.com/en-GB/investor-relations-new/reports- presentations/financial-results/, includes additional financial information not presented within the Group Financial Results Press Release (the “Press Release”), primarily relating to (i) NPE analysis (movements by segments and customer type), (ii) rescheduled loans analysis, (iii) details

• f historic restructuring activity including REMU activity, (iv) analysis of new lending, (v) Income

statement by business line, (vi) NIM and interest income analysis and (vii) Loan portfolio analysis in accordance with the three-stages model for impairment of IFRS 9. Except in relation to any non- IFRS measure, the financial information contained in the Investor Presentation has been prepared in accordance with the Group’s significant accounting policies as described in the Group’s Annual Financial Report 2019. The Investor Presentation should be read in conjunction with the information contained in the Press Release and neither the financial information in the Press Release nor in the Investor Presentation constitutes statutory financial statements prepared in accordance with International Financial Reporting Standards.

Group Financial Results for the year ended 31 December 2019

Supporting the Cypriot economy during the COVID-19 crisis

3

Significant Surplus Liquidity Good Capital Position

• Total Capital ratio of 18.0%1 and CET1 ratio of 14.8%1
• CET1 capital buffer of c.380 bps
• Surplus liquidity of €3.2 bn
• Deposits at €16.7 bn; Loan to deposit ratio at 64%

Group Financial Results for the year ended 31 December 2019

Robust Pandemic Plan in place

• Considerable experience in managing challenging circumstances
• Activation of Pandemic Plan to ensure operational resilience and no disruption of day-to-day activities
• Operational resilience strengthened by digital initiative, providing alternative solutions for carrying out daily

banking transactions online

Key priorities

• Safeguard health of staff and customers, while ensuring operational resilience of the Bank
• Support customers affected by COVID-19 and wider Cypriot economy
• Provision of liquidity to affected businesses & households, to alleviate short term cash flow burden

(1) Allowing for IFRS 9 transitional arrangements

Group Financial Results for the year ended 31 December 2019

Government’s fast reaction contained the spread of COVID-19 in Cyprus

4

Group Financial Results for the year ended 31 December 2019

(1) According to the information provided by University of Cyprus as at 24 April 2020 - https://covid19.ucy.ac.cy (2) Based on information up to 24 April 2020 provided by https://www.ecdc.europa.eu/en/publications-data/download-todays-data-geographic-distribution-covid-19-cases-worldwide

603 362 455 6,070 3,426 2,922 2,614 2,499 2,299 1,990 692 Cyprus Luxemburg 66 181 217 314 Portugal Italy Germany Ireland Spain 180 France 552 22 Greece

Total sample testing per 100,000 population per country1

• Swift government reaction following the outbreak of COVID-19 in Cyprus in mid-March 2020 for the containment of the pandemic spread
• COVID-19 sample testing per 100,000 population amongst the highest within EU
• Confirmed cases per 100,000 population amongst the lowest within EU
• Daily reported incidents stabilised and remain consistently low
• The Government is working on the gradual relaxation of measures, currently expected to be phased out from early May

Confirmed cases Tests

Cumulative cases per 100,000 population2 per country

Days since first case 66 22 207 455 217 181 314 500 80 200 60 20 10 30 40 70 50 90 300 100 400 Cyprus Portugal Spain Greece UK Germany Italy

1

All schools closed

2

Travel ban & country lockdown Stricter lockdown measures

1 2 3

Fast escalation of measures in Cyprus

66 22 207 455 217 181 314 70 60 30 50 10 20 80 40 90 100 200 300 400 500 Cyprus Portugal Greece Spain UK Germany Italy

1

All schools closed

2

Travel ban & country lockdown

1 2 3

Fast escalation of measures in Cyprus

3

Group Financial Results for the year ended 31 December 2019

Protection of staff and customers’ health is the key priority, while ensuring

• perational resilience of the Bank

5

Group Financial Results for the year ended 31 December 2019

Measures to Safeguard Health & Safety

• Establishment of a committee to monitor COVID-19 measures,

trace incidents and to provide regular updates to staff

• Implementation of Health & Safety measures in line with the

guidelines and recommendations issued by Ministry of Health

• Special purpose leave for employees that belong to vulnerable

groups

• Enhanced intensive clean-ups, a precautionary disinfection

procedure is in place throughout the Bank

• Shipment of masks and gloves and sanitisers to branches
• Participation in government’s COVID-19 testing schemes

Ensuring Operational Resilience

(1) This is the ratio of digitally engaged individual customers to the total number of individual customers as per the engagement scorecard. Digital channels include mobile, browser and ATMs. It also captures access to a card as well as online card purchases

• Activation
• f

the Pandemic Plan to ensure

• perational

resilience and no disruption of the day-to-day activities

• Splitting the operations of critical units to separate locations

and provision of remote access availability

• Branch network operates on a rotational basis, as a

precautionary measure

• 44% of staff (excluding branches) work remotely
• Digital service channels provide alternative solutions for

carrying out daily banking transactions online

• 70% of customers are currently digitally engaged1

Group Financial Results for the year ended 31 December 2019

Significant Regulatory measures to mitigate COVID-19 impact

6

• Increased capital and liquidity flexibility
• Flexibility to temporarily “dip into” certain capital buffers

(P2G & CCB) and minimum liquidity requirements (LCR)

• Bringing forward ability to use lower quality own funds

to meet Pillar 2 Requirements (P2R)

• Delay of phasing-in of 1 Jan 2021 O-SII buffer (0.5%

for the Bank) by 12 months

• Launch of a new Pandemic Emergency Purchase

Programme (PEPP) for an amount of €750 bn

• Exercise temporary flexibility regarding the “Unlikely

to Pay”

• Exercise full flexibility when discussing with banks

the implementation of their NPE reduction strategies

• Avoid procyclicality in models to determine expected

loan credit losses. Central macroeconomic scenarios will be provided to support IFRS 9 application. Banks should give a greater weight to long term stable

• utlook

evidenced by past experience

ECB/CBC

• IFRS 9
• COVID-19 moratorium not an automatic trigger for

increased credit risk

• Minimise cliff effect of transfers between stages
• Govt guarantees may mitigate ECL impact on P&L; no

impact from guarantees on assessment of increased credit risk

• ECB to provide central macroeconomic scenarios to

guide provisioning policies

• Forbearance
• General COVID-19 moratorium does not trigger

automatic reclassification due to forbearance

• Prudential Definition of Default
• Moratorium extends “90 days past due” deadline via

modified payment schedule

• Renegotiated loans (where NPV remains constant) not

considered distressed restructuring

• EU wide stress test postponed to 2021 to allow banks

to prioritise operational continuity

EBA and ESMA

Group Financial Results for the year ended 31 December 2019

7

(1) For further information, please refer to the Market Update published by the Ministry of Finance: https://www.mof.gov.cy/mof/pdmo/pdmo.nsf/6B8C5026F3AE168BC2258345003BAFEF/$file/Market%20Communication%2006%20April%202020.pdf (2) For tax periods ending February, March and April, 2020. It involves all companies, without imposing any charges or additional tax. It is noted that arrangements will be made so that the debts will be paid progressively until November 10, 2020 with the exception of companies that do not have liquidity problems such as pharmacies, supermarkets, etc.

• Immediate

introduction

• f

fiscal measures1 accounting for 5.4% of GDP, according to MOF

• Liquidity support to businesses and households
• Prevention of sharp rise in unemployment
• A

large and wide-ranging package

• f

financial measures amongst the most generous within Eurozone

• €3.0 bn of funding raised in April 2020; vote of

confidence to the Cypriot economy

• Issuance of €1.75 bn of 7 year and 30 year Eurobonds
• Issuance of €1.25 bn of 52-week treasury bills

Measures announced in March 2020 include:

• Moratorium of loan instalments for 9 months
• Capital and interest
• Available for all customers (businesses and

private individuals) with less than 30 days past due as at 29 Feb 2020

Timely and strong response by the Government of Cyprus

• Liquidity support to businesses and self employed, through

government guarantees to banks up to €2.5 bn (guarantee 70%)

• Approved by the Council of Ministers
• Pending approval by the Parliament
• Temporary suspension of VAT payments for 3 months2
• Suspension of the added contribution to the National Health

System for 3 months

• Employment compensation schemes for businesses impacted

by COVID-19, to protect jobs and avoid layoffs

• >50% of private sector employees (220,000) and c.40,000

self-employed workers expected to benefit

Eurogroup’s measures-Implications for Cyprus

• Access to €400 mn funding for companies with a focus on SMEs

through the European Investment Bank

• Access to €160 mn loan facility with favourable terms for the

protection of jobs and layoffs during crisis (SURE)

• Access to ESM’s Pandemic Crisis Support through the Enhanced

Conditions Credit Line, for c.€440 mn (2% of GDP)

Key Highlights:

Group Financial Results for the year ended 31 December 2019

Deterioration of the short term prospects of the Cypriot economy, following the

• utbreak of COVID-19

8

Gross Value Added by sector of economic activity (2019)1

• Open, small and flexible economy which has demonstrated historically that recovery from economic crisis can be quick
• The spread of COVID-19 is expected to have a significant impact on the global and the Cypriot economy, at least in the first half of 2020
• The impact on the Cypriot economy and the Bank will largely depend on the duration and the intensity of the pandemic
• Sectors most adversely affected initially by COVID-19 are expected to be Tourism, Trade and Construction accounting for 32% of GDP
• As the pandemic is still unfolding, at this stage it is not possible to assess the full likely impact
• Coordinated monetary, fiscal and regulatory measures announced by the Government and the European Authorities are expected to mitigate the impact

4% 6% 6% 7% 8% 10% 11% 21% 24% 3%

Trade, Transport, Tourism Information Professional administrative Public, education & health Construction Real Estate Financial Manufacture Arts and other Other

2012 2010 2011 2015 2016 2013 2014 2017 2018 2019 6.7% 3.2% 2.0% 0.4%

• 3.4%
• 6.6%
• 1.9%

3.4% 4.4% 4.1%

Annual Real GDP yoy % change1

(1) Source: Cyprus Statistical Service

Group Financial Results for the year ended 31 December 2019

Liquidity of c.25% of GDP through government measures, to support performing businesses and the wider economy

9

• €23.6 bn1 of performing loans in the Cypriot banking system

Tools for the support of these loans

• c.€2.5 bn liquidity injection through bank loans backed by government guarantees (70% guarantee)
• Approved by the Council of Ministers
• Pending approval by the Parliament
• €400 mn funding to businesses with a focus on SMEs through the European Investment Bank
• c.€2.3 bn of payment deferrals through the government COVID-19 loan moratorium
• Banking mechanism expertise to offer liquidity in a timely and effective way to affected businesses

(1) Based on Aggregate Cyprus Banking Sector Data as at 30 November 2019: https://www.centralbank.cy/images/media/redirectfile/2020_03_27%20Summary_EN.doc. In addition there are €4.2 bn restructured facilities that continue to be classified as non-performing exposures

Comprehensive and far reaching measures to support performing businesses and the wider economy

Group Financial Results for the year ended 31 December 2019

Well diversified performing loan portfolio; close monitoring and set up of strategies to prevent further asset quality deterioration

10 Private Individuals 3.94 Hotels & Catering Real Estate Trade Other sectors Professional & Other services Manufacturing Construction 1.02 1.01 1.01 0.74 0.63 0.54 0.34

Sectors most adversely affected by the COVID-19 outbreak:

• Tourism (Hotels & Catering): €1.01 bn

Travel bans and travellers’ concerns adversely impact the sector

• Trade: €1.01 bn

Reduced consumption and low consumer sentiment due to lockdown

• Construction: €0.54 bn

Slower production and lower demand due to lockdown

• Any prolonged outbreak of COVID-19 is expected to impact all sectors to a certain

extent with few exceptions

• No exposure to Aviation
• Small exposure to oil and gas industry of less than €50 mn

Strategy

• In contact with impacted customers to provide relief in the form of payment

deferrals and restructurings, as necessary

• Provision of liquidity to alleviate short term cash flow burden through:
• Government guaranteed facilities (pending approval by the Parliament)
• Short term funding based on CBC directive
• Other lending products

Performing gross loans1 by business activity

Total Performing book: €9.2 bn2

€ bn

(1) Gross loans of the following business lines: Corporate (incl. IB and W&M), SME, Retail, Insurance and other (incl. H/O) (2) As at 31 December 2019

Group Financial Results for the year ended 31 December 2019

Supporting customers through payment deferrals

• COVID-19 moratorium until the end of 2020, as per the

government measures

• Started on 30 March 2020
• Clients can request moratorium on the payment of capital &

interest for loans, overdrafts and credit cards

• Moratorium period of 9 months to address seasonality of the

Cypriot economy

• Available to all customers (private individuals and businesses)

with arrears less than 30 days as at 29 Feb 2020

• Capital plus interest
• Loan terms will be extended so that payments will continue as per

existing schedule

• COVID-19

moratorium does not trigger automatic reclassification due to forbearance

• Interest continues to accrue
• Continue to monitor the creditworthiness of customers who

applied for the loan moratorium

as at 23 April 2020 Requests € bn % Performing book Private Individuals 17,591 1.77 45% Businesses 3,278 3.40 66% Total 20,869 5.17 56%

Applications received

1.58 2.14 3.39 3.40 0.39 0.82 1.74 1.77 1.97 2.95 5.13 5.17 Business Private Individuals Column1

Applications received stabilised at c.€5 bn

€ bn 11

Group Financial Results for the year ended 31 December 2019

Supporting private individuals through COVID-19

12

• >35% of total employment are expected to be least affected by COVID-19

measures as employed in the government, semi-government and financial sector1

• Employment compensation scheme for businesses impacted by COVID-19,

to protect jobs and avoid layoffs until mid June 2020

• Scheme requirement is that no employee has been fired since 1 March 2020
• Compensation for 60% of the wage cost, for up to 60% to 90% of workforce,

depending on extent of loss of turnover and number of employees

• >50% of private sector employees (220,000) and c.40,000 self-employed

workers expected to benefit

Performing book- Private Individuals: €3.94 bn

• Implementation of COVID-19 moratorium until the end
• f 2020, as per the government measures
• 17,591 applications received for €1.77 bn of loans as

at 23 April 2020

• Requests driven by Mortgages and Personal loans

Applications received by product, as at 23 April 2020

80%

13% Housing 1% Other 3% Credit Card Business Personal 3%

€1.77 bn

1) Source: Cyprus Statistical Service

Group Financial Results for the year ended 31 December 2019

13

Supporting impacted businesses through COVID-19

Performing Book- Tourism (Hotels & Catering): €1.01 bn

Hotels & Catering 31 Dec 2019 € bn % of portfolio Food services 0.06 6% Accommodation 0.95 94% Total 1.01 100% Unutilised Liquidity1 (€ bn) as at 31 March 2020 0.34

• of which deposits (€ bn)

0.28 28%

• c. 6% of Tourism exposure is Food services
• Better positioned to manage social distancing through take out and drive-

through facilities

• Accommodation customers are expected to be under the most pressure
• Majority of Accommodation customers entered the crisis with significant

liquidity, following strong performance in recent years

• €0.89 bn or 88% applied for payment deferrals

Trade 31 Dec 2019 € bn % of portfolio Supermarkets, pharmacies and other essential retail businesses 0.28 28% All other 0.73 72% Total 1.01 100% Unutilised Liquidity1 (€ bn) as at 31 March 2020 0.83

• of which deposits (€ bn)

0.53 52%

Performing Book- Trade: €1.01 bn

• c. 28% tied up to lower risk essential retail services, not

materially impacted by COVID-19

• €0.54 bn or 53% applied for payment deferrals

(1) Unutilised overdraft amounts and deposits

Group Financial Results for the year ended 31 December 2019

Operational resilience facilitated by Digital Transformation

14

• The Bank continues to operate smoothly
• Digital channels, provide alternative solutions to customers for carrying
• ut daily banking transactions online
• Branch network operates on a rotational basis, as a precautionary

measure

• Digitally engaged1 customers increased by 2 p.p. to 70%, since

Dec 2019

• Ratio
• f
• nline

banking transactions to total transactions increased by 15 p.p. since 15 March 2020

• Following outbreak of COVID-19, initiatives launched aimed to provide

alternative solutions to customers for carrying

• ut

daily banking transactions online

• Issuance of debit cards free of charge until 31 May 2020
• Digipass devices provided free of charge
• Customers can open account via the Bank’s website & receive debit

card free of charge

• Customers can receive free subscription to internet banking

40% 35% 26% 28% 25% 30% 28% 25% 27% 30% 30% 37% 49% 45% 45%

16 Mar 2020

Branch

7 Apr 2020 23 Mar 2020

Online Banking

15 Apr 2020 30 Mar 2020

ATM 100% 100% 100% 100% 100%

Channel Usage (% of volume of transactions) since COVID-19 outbreak

(1) This is the ratio of digitally engaged individual customers to the total number of individual customers as per the engagement scorecard. Digital channels include mobile, browser and ATMs. It also captures access to a card as well as online card purchases

Group Financial Results for the year ended 31 December 2019

FY2019 - Highlights

15

Performance in 4Q2019 Active Liquidity Management Good Capital Position Balance Sheet Repair Continues

• Total Capital ratio of 18.0%1 and CET1 ratio of 14.8%1
• New lending of €443 mn for 4Q2019, totalling €2 bn for FY2019, up 9% yoy and highest since 2015
• Total Income of €156 mn, Operating profit of €53 mn in 4Q2019
• Cost of risk at 0.9% for 4Q2019
• Underlying result of a loss after tax from organic operations of €6 mn for 4Q2019 and a profit of €36 mn for FY2019
• Provisions/net loss relating to NPE sales of €86 mn, including, as previously announced, loan credit losses within

the context of IFRS 9 of €75 mn, as a result of the anticipated balance sheet de-risking through further NPE sales in the future

• Loss after tax of €186 mn in 4Q2019 and €70 mn in FY2019
• Deposits at €16.7 bn
• Loan to deposit ratio at 64%
• Introduction of liquidity fees for specific customer groups in March 2020
• Organic NPE reduction of €889 mn for FY2019, ahead of guidance
• NPEs reduced to €3.9 bn (€1.8 bn net)
• Gross NPE ratio reduced to 30%, coverage increased to 54%
• NPE portfolio sale currently delayed due to prevailing market and operational conditions resulting from COVID-19
• utbreak

(1) Allowing for IFRS 9 transitional arrangements (2) The gross annual saving does not include any impact from the renewal of the collective agreement for 2019 (3) Excludes special levy on banks and SRF contribution (4) This is the ratio of digitally engaged individual customers to the total number of individual customers as per the engagement scorecard. Digital channels include mobile, browser and ATMs. It also captures access to a card as well as online card purchases

Group Financial Results for the year ended 31 December 2019

Active Cost Management

• Successful completion of Voluntary Staff Exit Plan, resulting in gross annual savings2 of 13% (€28 mn); one-off cost
• f €81 mn in 4Q2019
• Full time employees reduced by 11%
• Cost to income ratio3 at 59% in FY2019
• 18% reduction in number of branches in 2019 supported by digital transformation
• 70% of customers currently digitally engaged4

Group Financial Results for the year ended 31 December 2019

16

Comfortable liquidity position with €3.2 bn liquidity surplus

€ bn 31 Dec 2018 31 Dec 2019 Customer deposits 16.8 16.7 Cash & Balances with Central Banks 4.6 5.1 LCR (%) 231% 208% Liquidity surplus 3.1 3.2 L/D ratio 72% 64% ECB liquidity relaxations for COVID-19 announced in March 2020:

• Flexibility to operate below 100% LCR limit in the short term
• Updated TLTRO III terms significantly more generous
• Introduction of LTROs, providing liquidity until next TLTRO in

June 2020

• Launch
• f

Pandemic Emergency Purchase Programme (PEPP) for an amount of €750 bn

• Relaxation of collateral rules for ECB funding enhances

borrowing capacity of banks

16.3 Dec 18 Mar 19 16.4 Sep 19 16.7 Jun 19 Dec 19 16.8 16.5

Stable deposit base of €16.7 bn at 31 December 2019

€ bn

• Stable deposit base of c.€16.7 bn, as at 31 December 2019
• Significant surplus liquidity of €3.2 bn, as at 31 December

2019

• Liquidity surplus remains broadly unchanged to date

Group Financial Results for the year ended 31 December 2019

Good capital position to withstand the COVID-19 impact

17

SREP requirement for 2020

Pillar 2 Requirement (P2R) of which: 3.0% 3.0% CET1 3.0% 1.69% Pillar 1 AT1 0.56% Pillar 1 T2 0.75% CET1 ratio CET1 ratio post ECB announcement 14.8% 14.8% 11.0% 9.7%

• SREP CET1 requirement1 for 2020 at 11.0%; buffer of 380 bps
• SREP Total Capital requirement1 for 2020 at 14.5%; buffer of 350 bps
• ECB capital relaxations for COVID-19 announced in March 2020:
• Ability to use AT1 and T2 to meet P2R requirement increases CET1 buffer

by 131 bps

• Flexibility to operate temporarily below CCB, increases CET1 and Total

capital buffer by 250 bps

• In April 2020, the CBC decided to delay the phasing-in of the 1 Jan 2021

O-SII buffer4 (0.5%) by 12 months

131 bps

Capital position as at 31 December 2019

Total capital ratio Total capital ratio post ECB announcement 18.0% 18.0% 14.5% 14.5%

min OCR (SREP)1 requirement for 2020

(1) OCR(SREP)- Overall Capital Requirement comprises the Total SREP Capital Requirement (Pillar 1 and Pillar 2 Requirement) plus combined buffer requirements (capital conservation buffer, countercyclical buffer and systemic buffers). As from 31 March 2020, following ECB measures CET1 ratio is 9.7% (2) Allowing for IFRS 9 transitional arrangements (3) On 12 March 2020 the ECB announced the implementation of a package of monetary policy measures in order to secure favourable conditions

• f financing for the economy with the aim to mitigate the effects of the crisis. Specifically the ECB announced the following relaxation measures

for the minimum capital requirements for Banks in the Eurozone: Banks are temporarily allowed to operate below the level of capital defined by the Pillar 2 Guidance, the Capital Conservation Buffer and the Countercyclical Buffer. Furthermore, the upcoming change under CRD5 regarding the P2R buffer was brought forward allowing the Pillar 2 Requirement (P2R) to be covered by Additional Tier 1 (AT1) capital and Tier 2 (T2) capital and not only by CET1 (4) The Central Bank of Cyprus (CBC) set the O-SII buffer for the Group at 2%. This buffer will be phased-in gradually, having started from 1 January 2019 at 0.5% and increasing by 0.5% every year thereafter, until being fully implemented (2.0%) on 1 January 2022. In April 2020 the CBC, as part of the COVID measures, decided to delay the phasing-in by 12 months (1 January 2023). As a result, the phasing-in of 0.5% on 1 January 2021 has been delayed for 12 months. 3 3 2 2 2 2

2019 2020 2020

post ECB’s amendment

• f P2R

composition3

Pillar 1 CET1 4.50% 4.50% 4.50% Pillar 2 Requirement (P2R) CET1 3.00% 3.00% 1.69% Capital Conservation Buffer (CCB) 2.50% 2.50% 2.50% Other Systemically Important Institutions (O-SII)4 0.50% 1.00% 1.00% CET1 Requirement 10.50% 11.00% 9.69% Pillar 1 AT1 1.50% 1.50% 1.50% Pillar 1 T2 2.00% 2.00% 2.0% Total Capital Requirement 14.00% 14.50% 14.50%

Group Financial Results for the year ended 31 December 2019

18

• Extent of the spread of COVID-19
• Direct and indirect impact on customers
• Effectiveness of the regulatory and fiscal measures taken to

support the economy and mitigate the impact of the virus

2020 unknowns 2020 knowns

Key Takeaways

• Good capital and strong liquidity position
• Cypriot Government is successfully managing the containment of the

virus

• Government measures provide significant liquidity injection to support

viable customers

• Deterioration of the short term prospects of the Cypriot economy
• Well diversified performing book with most affected sectors entering

the crisis with liquidity buffers

• Update of macroeconomic assumptions underlying the IFRS 9 calculation of loan credit losses for 1Q2020 in line with the relevant regulatory guidance,

may result in increased organic provisions in 1Q2020, although the exact quantum is as yet unknown

• Despite the lower transactional income and lower demand for loans currently seen, the on-going economic uncertainty means that the Group does not

have sufficient visibility about the likely future impact of COVID-19 on its operations or financial results, and therefore is currently not in a position to provide guidance for the current financial year

Key strategic focus remains the improvement of the asset quality and efficiency of the Bank

Group Financial Results for the year ended 31 December 2019

FY2019 Group Financial Results

19

Group Financial Results for the year ended 31 December 2019 2 4 6 8 10 12 14 16 18 20 22 24

0.3%

CET1 31 Dec 2018 IFRS 9 impact for future NPE sales Operating Profits T2 Sale of CNP CET1 30 Sep 2019

14.8% 0.3% (0.3%) 0.4% 1.5%

Loan credit losses and

• ther

impairments RWAs

(0.6%)

Voluntary Staff Exit Plan

(0.5%)

CET1 31 Dec 2019

1.7%

AT1 Total Capital 31 Dec 2019

12.1% 15.2% 18.0%

CET1 ratio at 14.8%1,2 and Total capital ratio at 18.0%1

(1) Allowing for IFRS 9 transitional arrangements (2) The CET1 ratio for 31 Dec 2019, including the full impact of IFRS 9 amounted to 13.1% (3) Loan credit losses and other impairments include the net change of the prudential charges relating to specific credits and other items (4) OCR(SREP)- Overall Capital Requirement comprises the Total SREP Capital Requirement (Pillar 1 and Pillar 2 Requirement) plus combined buffer requirements (capital conservation buffer, countercyclical buffer and systemic buffers). ). As from 31 March 2020, following ECB measures CET1 ratio is 9.7% (5) The Central Bank of Cyprus (CBC) set the O-SII buffer for the Group at 2%. This buffer will be phased-in gradually, having started from 1 January 2019 at 0.5% and increasing by 0.5% every year thereafter, until being fully implemented (2.0%) on 1 January 2022. In April 2020 the CBC, as part of the COVID measures, decided to delay the phasing-in by 12 months (1 January 2023). As a result, the phasing-in of 0.5% on 1 January 2021 has been delayed for 12 months (6) On 24 April 2020, the Group held Cyprus sovereign debt securities of a nominal amount of €772 mn, compared to €477mn on 31/12/19,

• f which €350 mn is held at FVOCI portfolio and €422mn is held at AC portfolio. The increase since year end is mainly due to the Group’s

participation on the issuance of 52-week treasury bills of the Cyprus Government in April 2020

CET1 at 14.8%, well above regulatory requirements

min OCR (SREP) requirement for 2020

11.0% 14.5% 20

1 1 1,2 3 1

• Completion of CNP sale added 30 bps to capital
• Loan credit losses within the context of IFRS 9 as a result of the anticipated balance sheet de-risking through further NPE sales in the future, of €75 mn reduced

capital by 46 bps

• Completion of Voluntary Staff Exit Plan reduced capital by 60 bps
• Unchanged SREP capital requirements for 2020 when ignoring the phasing-in of O-SII5 of 50 bps
• Following the COVID-19 outbreak and the resultant volatile market and economic environment, the Fair Value Reserve of the FVOCI debt security portfolio of the

Group held as at 31 December 2019 has decreased by €39m on 24 April 2020. This change is recognised directly in Equity6

Total Capital ratio CET1 ratio

14.5% 17.7%

Capital position 1 January 2020

1 1

9.7% 14.5%

min OCR (SREP) requirement for 2020 post ECB Announcement 4

Group Financial Results for the year ended 31 December 2019

RWA intensity1 reduced to 61%

RWA intensity1 reduced to 61%

21

• RWA intensity1 reduced to 61%
• Reduction of 4 p.p. qoq, mainly due to

✓ the completion of the disposal of investment in CNP2 ✓ the disposal of a large REMU exposure (Nicosia Mall) ✓ the reduction of the operational risk RWAs

Dec 16 Dec 14 Dec 17 Dec 15 85% Dec 18 Sep 19 Dec 19 85% 85% 73% 70% 65% 61%

• 4 p.p.

RWAs reduced by c. €10 bn since peak

RWAs Dec 14 Dec 15 Dec 16 Dec 17 Dec 18 Sep 19 Dec 19 € bn 22,715 19,666 18,865 17,260 15,373 13,758 12,890

(1) Risk Weighted Assets over Total Assets (2) In Oct 2019 the Bank completed the disposal of its entire shareholding of 49.9% in its associate CNP Insurance Holdings Limited (“CNP”)

Group Financial Results for the year ended 31 December 2019

>€11 bn or 74% NPE reduction since peak

22

20 40 60 80

18% 63% Dec 14 53% 62% 55% 30% 50% Dec 15 42% Dec 16 Dec 19 47% Sep 19 32% Dec 17 31% 47% Dec 18 30% 17%

• 33 p.p.

Gross NPE ratio Net NPE ratio

• > €11 bn or 74% NPE reduction since peak

✓ c. €2.7 bn NPE through trades ✓ c. €8.4 bn organic

• SPA for the sale of c.€140 mn retail unsecured

NPEs signed in Jan 2020 (Velocity 2) ✓ 33 p.p. reduction since peak

(8.4) Organic 5.1 31 Dec 14 2.1 (2.7) NPE trades 31 Dec 2019 Allowance for Expected Loan credit losses Net NPEs 9.9 15.0 3.9 1.8 €11.1 bn NPEs (€ bn)

Gross NPE ratio reduced to 30%; 17% on a net basis

Group Financial Results for the year ended 31 December 2019

(1) In pipeline to exit NPEs subject to meet all exit criteria; the analysis is performed on a customer basis (formerly called Non-core NPEs)

Core NPE risk reduced to €3.45 bn; 58% cash covered

23

Core NPEs reduced by €2.8 bn yoy

Re-performing NPEs Dec 15 Dec 18 0.53 0.43 Core NPEs Sep 19 6.21 Dec 19 3.88 13.97 7.42 4.08 11.36 2.61 1.21 3.55 3.45

• €2.81 bn

5.70 Corporate 3.07 Retail SMEs 2.59

1

€ bn 0.54 2.28 Corporate 0.63 SMEs Retail 11.36 0.56 2.21 Corporate 0.78 SMEs Retail Core NPEs (€ bn) 3.55 3.45 2.51 SMEs Corporate 1.55 Retail 2.15 6.21

Group Financial Results for the year ended 31 December 2019

58% 24% 54% Dec 19 Re-performing NPEs Core NPEs

(1) Restricted to Gross IFRS balance (2) In pipeline to exit NPEs subject to meet all exit criteria; the analysis is performed on a customer basis (formerly called Non-core NPEs) (3) Based on EBA Risk Dashboard as at 31 December 2019

NPE Coverage increased to 54%

24

NPE total coverage at 122% when collateral included

54% CY 54% BOC IT 48% 50% 45% PT 45% GR EU average 43% ES

NPE coverage remains above EU average3

• Cash coverage at 54%, increased by 3 p.p.

qoq

• Cash coverage of Core NPEs at 58%
• Collateral coverage at 68%

1 2

52% 68% 69% Dec 17 Dec 19 Dec 16 41% 67% 70% 48% Dec 18 115% 51% Sep 19 68% 54% 109% 122% 120% 122% Tangible collateral Allowance for expected loan credit losses

Group Financial Results for the year ended 31 December 2019

• 0.02
• 0.10

DFAs & DFEs

• 0.28

Curing of restructuring

• 2.66
• 0.02

Write-offs

• 0.04
• 0.06

Other

• 3.03
• 0.27
• 0.24
• 0.06
• 0.12
• 0.14
• 0.08
• 0.11
• 0.09
• 0.09
• 0.10
• 0.06
• 0.07

Net organic

• utflows

(1) Other includes interest, cash collections and changes in balances

c.€1.2 bn organic NPE outflows in FY2019, leading to €889 mn organic NPE reduction

25 0.03 0.03

1Q2019 2Q2019

0.01 0.02 0.01 0.03 0.01

3Q2019

0.13 0.01 Redefaults

4Q2019

New inflows Unlikely to pay 0.06 0.05 0.04 0.06 0.03 0.02 Sales of NPEs

1

• NPE outflows of €237 mn & inflows of €32 mn in

4Q2019

• NPE inflows for FY2019 limited to 3.1% of

performing book (GBV)

• Moratorium of loan instalments for 9 months

for all customers with less than 30 days past due as at 29 Feb 2020, does not trigger automatic reclassification due to forbearance

€ bn

• 0.15
• 0.31
• 0.22
• 0.21

Group Financial Results for the year ended 31 December 2019

(1) In pipeline to exit NPEs subject to meet all exit criteria; the analysis is performed on a customer basis (formerly called Non-core NPEs) (2) ESTIA-eligible portfolio refers to the initial potentially eligible portfolio based on the Bank’s available data

Clear strategy for further NPE reduction once economic conditions normalise

26

Group NPEs (€ bn)

SME Re-performing loans Retail- Non Estia eligible 31 Dec 2019 Estia eligible Corporate 3.88 0.54 0.63 1.46 0.82 0.43 €2.63 bn

Re-performing NPEs1: €0.43 bn

Close monitoring of redefaults & quality of restructurings Exit date may be extended if customers are eligible and apply for the loan moratorium

ESTIA eligible2: €0.82 bn (see slides 27 & 49)

• Following Covid-19 outbreak, focus on arresting any potential asset quality deterioration.

Once economic conditions normalise, the Group expects to resume its efforts to improve its asset quality position by seeking solutions, both organic and inorganic

• Realising collateral via consensual and non consensual foreclosures for non-Estia

eligible clients

• On board assets in REMU at conservative c.25%-30% discount to open market value

(OMV)

• SPA for the sale of c.€140 mn retail unsecured NPEs signed in Jan 2020 (Velocity 2)
• Management continues to actively explore strategies to further accelerate de-risking

including further portfolio sales ✓ NPE portfolio sale currently delayed due to prevailing market and operational conditions, resulting from COVID-19 outbreak ✓ Smaller tail trades under consideration

Core NPEs excluding ESTIA eligible2: €2.63 bn

1 2

up to 2021 2022+ 0.36 0.07 € bn

Exit dates for re-performing NPEs1:

Group Financial Results for the year ended 31 December 2019

(1) ESTIA-eligible portfolio refers to the potentially eligible portfolio based on the Bank’s available data (2) Please refer to slide 75 for the NPE forborne exit criteria (3) Data available as at 10 April 2020

ESTIA- Government scheme for the resolution of NPEs backed by primary residence

27

• Clear definition of socially protected borrowers
• Resolution part of ESTIA- eligible1 portfolio
• Identification of non-viable (vulnerable) customers
• Facilitates resolution of remaining customers mainly through consensual and

non consensual foreclosures

• Deadline for completion of applications extended to 30 June 2020, due to

COVID-19 outbreak

382 434

Estia eligible

Applicants Non applicants € mn

• Restructured loans will exit NPE definition in accordance with the NPE exit

criteria2

• Government solution under consideration
• Covered by 58% by allowance for expected loan credit losses
• Enforcement measures initiated for non Estia applicants
• Focus
• n

realizing collateral via consensual and non-consensual foreclosures

• On-board assets in REMU at conservative c.25%-30% discount to open

market value

• Smaller tail trades under consideration

Participants: €41 mn3 Non viable: €30 mn3 Other: €745 mn3

Incomplete/Under review 41 Participants 311 30 Non viable €816 mn

1

Coverage: 58%

Group Financial Results for the year ended 31 December 2019

Foreclosures are an important tool in NPEs resolution

28

• Foreclosures commenced2 and auctions held, accelerated in 4Q2019
• Solution rate4 at 68%
• c.1/5 properties auctioned are sold at auction
• >400 properties in the pipeline for repossession3
• 8 months time to auction (refer to slide 48)
• Period for repossession reduced from 12 to 6 months from date of first

unsuccessful auction

• Following COVID-19 outbreak, foreclosure process suspended until

18 June 2020, in line with the decision of the Association of Cyprus Banks

1,245 properties resolved excluding Helix assets since Jan 2016

Sold at auction 353 655 Consensual deals Repossessed 237 Cumulative 2016 - 20181 2019 Foreclosures commenced2 1,437 1,829 Auctions held 470 807 1Q2019 2Q2019 3Q2019 4Q2019 330 527 436 536 82 163 189 373

• No. of properties

(1) Excluding Helix (2) The foreclosure process is considered to have commenced upon serving notice to the mortgagor (3) Properties that have been auctioned unsuccessfully at least once (4) The [number of cases resolved] as a proportion of [the number of cases that reached or would have reached an auction had they not closed prior to the auction set date] (5) Includes DFAs, restructurings and settlements

5 3

1,245

Group Financial Results for the year ended 31 December 2019

REMU: €1.25 bn sales of 1,584 properties across all property classes since set-up in Jan 2016

29

(1) Amounts as per Sales purchase Agreements (SPAs) (2) Number of properties sold include 21 properties from the disposal of Cyreit and 23 properties from NPE sale (Helix) (3) Legacy properties relate to properties that were on-boarded before REMU set-up in January 2016 (4) The BV of the properties disposed at the date of disposal as a proportion of the [BV of the properties disposed at the time of the disposal plus the BV of the residual properties managed by REMU as at 31 Dec 2019]

Sales since Real Estate Management Unit set-up

Sales contract prices1 (€ mn) # 99 # 331 # 575 # 5792 179 330 238 345 160 505 2019 2017 2016 2018 Cyreit Sales # properties

Sales €1.25 bn

Breakdown of cumulative sales1

by on-boarding year (€ mn) 294 546 318 93 2017 1 2018 2019 2016 Legacy €1,252

% Sales

• f vintage stock

(BV)4

54% 45% 48% 26% 37% 23% 11% 9% 13% 7%

Land Cyreit Commercial Hotels Residential Overseas

by property type

✓ Asset disposal strategy tackles both value and volume of assets ✓ Asset disposals across all property classes ✓ 54% of Legacy3 and 45% of 2016 book assets now sold ✓ 37% of sales (by value) relate to land

3

Group Financial Results for the year ended 31 December 2019

REMU sales achieved comfortably above Book Value

30 280 628 273 182 103 Dec 2016 Greece & Romania Dec 2019 Sep 2019 Dec 2017 Dec 2018 24 Residential 1,513 Commercial properties Hotels Land & plots 1,427 Golf 1,490 1,641 1,530 Group BV (€ mn)

Evolution of REMU stock1

345 105 182 46 Total Sales 2019 Land 12 Hotels Commercial Residential 94% 101% 94% 93% 94% 112% 127% 106% 120% 118% Net Proceeds / BV Gross Proceeds / OMV

• Encouraging trends on real estate market

✓ Sale contracts (excluding DFAs) up 12% yoy3 ✓ Residential property price index up 2.8% yoy4

• Visible pipeline of €36 mn (SPAs signed)
• Regulatory approval received for the setup of an Additional

Investment Fund (AIF) with GBV of €45 mn (8 assets with yield c.6.5%) €505 mn sales at a profit of €32 mn in FY2019

Sales contract prices2 – Organic (€ mn)

(1) In addition to assets held by REMU, properties classified as “Investment properties” with carrying value of €24 mn as at 31 December 2019 relate to legacy properties (2) Amounts as per Sales purchase Agreements (SPAs) (3) Based on data from Land of Registry- Sales contracts (4) Based on Residential price index published by Central Bank

Group Financial Results for the year ended 31 December 2019

(1) AIEA: Average Interest earning assets. Please refer to slide 72 for the definition (2) Debt securities, treasury bills and equity investments

Balance sheet composition

31

Total assets

1.91 REMU properties 0.32 31 Dec 2019 Other assets (including HFS) Performing net loans Legacy net loans Due from banks Securities Cash 21.12 5.06 8.94 1.79 1.49 1.61 50% 11% 39% Performing net loans Liquids Legacy net loans Equity 31 Dec 2019 0.27 0.53 Other Wholesale Due to banks Customer deposits 21.12 16.69 2.29 1.34

Total equity & liabilities

AIEA Mix 4Q2019 AIEA: €17.7 bn € bn € bn

1 1 2

Group Financial Results for the year ended 31 December 2019

(1) Servicing exclusively international activity companies registered in Cyprus and abroad and not residents (2) Origin is defined as the country of the passport of the Ultimate Beneficial Owner (3) NSFR has not yet been introduced. NSFR will become a regulatory indicator when CRR2 is enforced, with the limit set at 100%. The NSFR is calculated as the amount of “available stable funding” (“ASF”) relative to the amount of “required stable funding” (“RSF”), on the basis of Basel III standards

Stable deposit base and strong liquidity position

32

Deposits

€ bn Liquidity ratio Minimum required 31 Dec 2019 Surplus LCR (Group) 100% 208% €3,189 mn NSFR3 100% 127% €3,392 mn

1

Sep 19 Jun 19 Dec 18 12.76 Mar 19 Dec 19 16.30 16.47 16.84 16.38 16.69 13.14 3.70 3.54 3.46 12.92 12.98 3.49 13.15 3.54 +1.3% Cyprus non-IBU Cyprus IBU 67% 21% 6% 4% 2% Cyprus Russia Other EU Other European countries, excl. Russia Other countries

Cyprus deposits by passport origin2 ✓ Significant surplus liquidity of €3.2 bn ✓ Deposits at €16.7 bn, up 1% qoq ✓ Strong deposit market share of 35.1% at Dec 2019

• Liquidity fees for specific customer groups introduced in March 2020

Group Financial Results for the year ended 31 December 2019

(1) New disbursements in the reporting period including the average YTD change (if positive) for overdraft facilities (2) Facilities/limits approved in the reporting period

New lending1 at €2.0 bn in FY2019, highest since FY2015

33

98% of new exposures2 in Cyprus since 2016 are performing Performing gross loans by business activity

563 146 486 410 411 321 175 232 996 1,870 2Q2018 FY2018 3Q2018 1Q2018 4Q2018 563 173 548 491 443 366 200 211 1Q2019 3Q2019 2Q2019 4Q2019 FY2019 2,045 1,095 € mn Corporate Syndicated & shipping SME Retail-other Retail-housing 9.9% 14.3% 14.0%

• 9.1%

18.5% % change yoy

3.94 Trade Real Estate Private Individuals Manufacturing Construction Professional & Other services Hotels & Catering Other sectors 4.04 1.02 1.10 0.71 1.01 0.93 1.01 0.77 0.74 0.32 0.60 0.63 0.55 0.54 0.34

2018 2019 € bn

• 2.5%
• 8.1%

8.9% 32.6% 3.4% 4.2%

• 1.9%

7.3% % change yoy 9.4%

Group Financial Results for the year ended 31 December 2019

(1) The interest income, non-interest income, staff costs, other operating expenses and loan credit losses related to Project Helix are disclosed under ‘Provisions/net loss relating to NPE sales’ since they are considered one-off items (2) Including the impact from IFRIC Presentation of unrecognised interest following the curing of a credit-impaired financial asset (IFRS 9). This resulted to a reclassification between net interest income and loan credit losses, with no impact on the overall profitability (3) An amount of c.€12 million relating to one off charge included in ‘Net interest income’ under the statutory basis is presented within ‘Loan credit losses’ under the underlying basis which is related to a change in the method of amortising arrangement fees given that this was a non recurring item (4) Properties held by the Bank prior to REMU set-up in January 2016 (5) NPE sales refer to NPE sale transactions completed in the year as well as sale transactions being contemplated as at year-end irrespective of whether they met the held for sale classification criteria as at 31 December 2019 (6) ‘Provisions/net loss relating to NPE sales’ refer to the net loss on transactions completed during FY2019, net loan credit losses on transactions under consideration at 31 December 2019, as well as the restructuring costs relating to these trades. For further details on ‘Provisions/net loss relating to NPE sales’ please refer to Section B.3.4 of the FY2019 Press Release

Income Statement

34 € mn FY20191 FY20181,2 4Q20191 3Q20191 qoq% yoy% Net Interest Income 344 331 84 90

• 7%

4% Non interest income 307 326 72 72 1%

• 6%

Total income 651 657 156 162

• 4%
• 1%

Total expenses (410) (393) (103) (99) 5% 4% Operating profit 241 264 53 63

• 17%
• 9%

Loan credit losses (146)3 (135) (29)3 (30)

• 3%

8% (Impairments)/ reversal of impairments of other financial and non-financial instruments (22) (20) (13) 1

• 12%

Provisions for litigation, claims, regulatory and other matters (10) (23) (7) (6) 19%

• 54%

Total loan credit losses, impairments and provisions (178) (178) (49) (35) 41% 0% Advisory and other restructuring costs-organic (22) (42) (8) (4) 63%

• 49%

Profit/(loss) after tax-Organic (attributable to the owners) 36 46 (6) 23

• 22%

Restructuring costs- Voluntary Staff Exit Plan (VEP) (81)

• (81)
• Provisions/net loss relating to NPE sales6

(92) (83) (86) (4)

• 12%

Net (loss)/ profit on remeasurement of investment in associate (CNP) (21) 9

• Reversal of impairment of DTA and impairment of other tax

receivables 88 (79) (13)

• (Loss)/profit after tax-attributable to owners

(70) (104) (186) 19

• 32%

Net Interest margin (annualised) 1.90% 1.82% 1.87% 1.99%

• 12 bps

+8 bps Cost to income ratio 63% 60% 67% 61% +6 p.p. +3 p.p. Cost-to-Income ratio adjusted for the special levy and SRF contribution 59% 56% 63% 57% +6 p.p. +3 p.p. Cost of Risk (annualised) 1.12% 0.99% 0.89% 0.90%

• 1 bps

+13 bps EPS – Organic (€ cent) 8.0 10.2

• 1.3

5.2

• 6.5
• 2.2
• NII decreased to €84 mn in 4Q2019, mainly due

to higher interest cash collections not previously recognised, in 3Q2019

• Non-interest income at €72 mn for 4Q2019,

broadly flat qoq

• Loan credit losses at €29 mn for 4Q2019, broadly

flat qoq

• Impairment of other financial and non-financial

instruments of €13 mn for 4Q2019 , mainly due to the further de-risking

• f

the REMU legacy4 properties

• Completion of Voluntary staff exit plan (VEP) in

4Q2019 at an one off cost of €81 mn

• Provisions/net loss relating to NPE sales5 of €86

mn, including additional loan credit losses within the context of IFRS 9 of €75 mn, as a result of the anticipated balance sheet de-risking through further NPE sales in the future

• Reversal of impairment of DTA and impairment of
• ther tax receivables of c. €13 mn in 4Q2019

relates to an additional estimated guarantee fee provision relating to tax credits

• Loss after tax of €186 mn for 4Q2019
• Loss after tax of €70 mn for FY2019

Group Financial Results for the year ended 31 December 2019

(1) Interest income on performing book for 1Q2019 increased from €74 mn to €77 mn since previously disclosed on 13 May 2019, due to reclassification between exposures

Balance sheet de-risking results in a smaller but safer loan book

35

Net Loans: Performing vs Legacy

• Lower but higher quality income resulting from balance sheet de-risking
• Interest Income of performing book reduced by €1 mn qoq, mainly due to higher interest collections not previously recognised, recorded in 3Q2019
• Interest Income of legacy book reduced by €6 mn qoq as balance sheet de-risking continues
• Interest on Net NPEs not received in cash, fully provided
• Lending rates remain under pressure due to the sustained low interest rate environment

Interest Income on Loans: Performing vs Legacy

9.98 Dec 16 Dec 17 Dec 18 8.85 Mar 19 8.97 10.15 Sep 19 4.40 8.87 1.97 8.65 Dec 19 Jun 19 12.04 15.62 14.55 5.64 12.04 10.93 10.94 10.73 3.39 3.19 2.06 8.94 1.79 17% 36% 83% 64% Legacy Performing 77 74 76 75 27 27 29 23 4Q2019 3Q2019 1Q2019 105 2Q2019 98 104 101 € mn € bn Legacy Performing

1

Group Financial Results for the year ended 31 December 2019

Performing Legacy Group

FY2019 FY2019 FY2019 Profitability Interest Income on loans (€ mn) (pre FTP) 3021 106 408 Reversal/(Loan credit losses) (€ mn) 33 (179) (146) Interest Income net of loan credit losses (€ mn) 335 (73) 262 Cost of Risk

• 0.37%

4.58% 1.12% Effective Yield 3.40%1 5.25% 3.75% Risk adjusted Yield2 3.78%1

• 3.59%

2.41% Capital & balance Sheet Average Net Loans (€ mn) 8,854 2,031 10,885 RWA Intensity3 53% 103% 61%

(1) Interest income on performing book for 1Q2019 increased from €74 mn to €77 mn since previously disclosed on 13 May 2019, due to reclassification between exposures (2) Interest Income on loans net of loan credit losses/ Average Net Loans (3) Risk Weighted Assets over Total Assets

Risk adjusted yield will rise as Legacy book reduces

36

• Performing Book is expected to grow and to

increasingly drive Group results

• Legacy book revenues predominantly driven

by loan credit losses unwinding (but offset via loan credit losses)

• Release
• f

€33 mn

• f

provisions in performing book mainly due to loan migration from Stage 2 to Stage 1

• Interest on Net NPEs not received in cash,

fully provided (€18 mn in 4Q2019 and €77 mn in FY2019)

• As Legacy book reduces:
• Group risk adjusted yield expected to

rise

• Group Risk intensity expected to fall

supporting CET1 ratio build

Corporate IB, W&M SME and Retail Banking Insurance and Other incl H/O RRD Overseas non core REMU

Group Financial Results for the year ended 31 December 2019

(1) Cash, placements with banks, balances with central banks and bonds (2) Other includes funding from central banks and deposits by banks and repurchase agreements. For further details, please see slide 64 (3) Effective yield of liquid assets: Interest income on liquids after hedging, over average liquids (Cash and balances with central banks, placements with banks and bonds) (4) Effective yield of cost of funding: Interest expense of all interest bearing liabilities after hedging, over average interest bearing liabilities (customer deposits, funding from the central bank, interbank funding, subordinated liabilities) (5) Interest income on performing book for 1Q2019 increased from €74 mn to €77 mn since previously disclosed on 13 May 2019, due to reclassification between exposures

Drivers of NIM

37

Composition of NII Liquidity build up:

• Challenging interest rate outlook continues

to put pressure on the effective yield of liquids

• Balance sheet de-risking–smaller but safer

loan book

• Higher-yielding, higher-risk legacy loans

are reducing as we successfully exit NPEs Loan yields:

• Performing

book yields remain under pressure mainly due to the continued lower interest rate environment

• Legacy book yields remain volatile
• Interest on Net NPEs not received in

cash, fully provided Cost of funding:

• Improved to 38 bps, positively affected by

the 3 bps reduction in cost of deposits in 4Q2019

• Overall cost of deposits reduced by 60 bps

since year end 2017 Effective yield on assets & cost of funding

77 74 76 75 27 27 29 23 6 6 5 1Q2019 Legacy 2Q2019 4 3Q2019 4Q2019 Liquids Performing 110 107 110 102

• 3
• 3
• 3
• 3
• 3
• 3
• 6
• 6
• 6
• 6
• 13
• 10
• 8
• 8
• 2

Net derivative

• 2
• 18

Other Subordinated loan stock Customer deposits

• 25
• 22
• 20

355 335 338 330 506 530 576 485 19 17 7 6

• 50
• 43
• 39
• 38

1Q2019 2Q2019 3Q2019 4Q2019

Performing Legacy Liquids Cost of funding

5 5 2

4 3

188 189 199 187 NIM (bps) 85 85 90 84 NII (€ mn)

1

Group Financial Results for the year ended 31 December 2019

162 53 18 93 326 FY2018 150 58 32 67 FY2019 307 37 38 36 39 12 18 12 16 12 10 18 24 14 11 1Q2019 4 2Q2019 6 72 3Q2019 92 4Q2019 71 72

(1) Net FX gains/(losses & Net gains/(losses) on financial instruments, and other income (2) Gains/(losses) from revaluation and disposal of investment properties and on disposal of stock of properties (3) The interest income, non-interest income, staff costs, other operating expenses and loan credit losses related to Project Helix are disclosed under ‘Provisions/net loss relating to NPE sales’ since they are considered one-off items

Non interest income of €72 mn in 4Q2019 broadly flat qoq

38

Analysis of Non Interest Income (€ mn) – Quarterly

• Net

fee and commission income accounts for 25% of Total Income, compared to 23% the previous quarter

• Recurring

income

• f

€55 mn for 4Q2019, up 13% qoq mainly due to higher insurance income

• Net insurance income of €16 mn for

4Q2019, compared to €12 mn for 3Q2019, primarily due to the change in the valuation rate and the positive effect from lower insurance claims (c.€5 mn)

• Net REMU gains2 of €6 mn in 4Q2019

compared to net gains of €10 mn in 3Q2019; REMU remains volatile

• Net gains on financial instruments1 and
• ther income of €11 mn for 4Q2019

compared to €14 mn in 3Q2019, driven by lower net foreign exchange gains and lower revaluation gains of financial instruments

56 48 49

Net FX and other income REMU Insurance income net of insurance claims Net fee & commission Recurring income

1 2

Net fee & commission %

• f total income

25% 23% 22% 23% 25% 23% 55 215 208

3

73% 9%

• 27%
• 8%

% change yoy

Group Financial Results for the year ended 31 December 2019

Stable recurring fees from insurance business

39

• Leading life insurer in Cyprus
• 24% market share (Life & Health regular)
• Gross Written Premiums (GWP) up 6% yoy

Product Mix by premium

• Non-Life leading insurer
• 17.7% market share2 (excl. motor)
• GWP up 2% yoy

Product Mix by premium GWP evolution (€ mn) GWP evolution (€ mn) Group Insurace income net of claims (€ mn) 106 115 122 FY2017 FY2018 FY2019

+8% +6%

47 49 50 FY2019 FY2017 FY2018

+4% +2%

50 53 58 FY2017 FY2018 FY2019

✓ Comprehensive insurance business package providing coverage for all financial needs ✓ Stable contributor to the Bank’s profitability ✓ Well positioned for growth over medium term

Eurolife key metrics FY2019 GWP (€ mn) 122 PAT (€ mn) 17 Dividend paid to the Bank in 2019 (€ mn) 12 AUM1 (€ mn) 456 60% 22% 18%

Unit-linked Traditional Life Accidents &Health

50% 26% 5%19%

Other Accidents & Health Property Motor

GIC key metrics FY2019 GWP (€ mn) 50 PAT (€ mn) 8 Dividend paid to the Bank in 2019 (€ mn) 8 Contribution to BOCH % of total FY2019 Non interest income 19%

(1) Assets under management (2) Data based on statistics published on IAC website

Group Financial Results for the year ended 31 December 2019

(1) Loan credit losses on customer loans including off-balance sheet exposures, net of gains/(losses) on derecognition of loans and advances to customers and change in expected cash flows over average gross loans

Cost of risk

40

Quarterly CoR1 at 0.89%

• Cost of risk for FY2019 at 1.1% of gross loans,

compared to 1.0% for FY2018 on the same basis, reflecting further de-risking and IFRS 9 model volatility

• Cost of risk for 4Q2019 at 0.89% of gross loans,

compared to 0.90% for 3Q2019, on the same basis

• Interest on Net NPEs not received in cash, fully

provided (€18 mn in 4Q2019 and €77 mn in FY2019)

• Reversal in 4Q2019 relates mainly to the migration of

loans from Stage 2 to Stage 1 due to the reduction in credit risk and the improvement in probabilities of default

bps FY2018 FY2014 FY2015 FY2017 2.8% FY2016 FY2019 4.3% 1.7% 4.0% 1.0% 1.1%

COR1 at 1.1% for FY2019

75 29 48 116 29 65 56 55 58 1Q2019 7 7 2Q2019 7 3Q2019 111 2 4Q2019 147 123 173

Interest on net NPEs not received in cash New lending Stage 1 & 2 Stage 3

• 3
• 21
• 84

144 123 90

89

Group Financial Results for the year ended 31 December 2019

(1) Excludes special levy on banks and SRF contribution (2) Representation for deconsolidation of UK subsidiary in 3Q2018 (3) The interest income, non-interest income, staff costs, other operating expenses and loan credit losses related to Project Helix are disclosed under ‘Provisions/net loss relating to NPE sales’ since they are considered one-off items (4) The contributions are calculated based on the Risk Based Methodology (RBM) as approved by the management committee of the Deposit Guarantee and Resolution of Credit and Other Institutions Schemes (DGS) and is publicly available on the CBC’s website. In line with the RBM the contributions are broadly calculated on the covered deposits of all authorised institutions and the target level is to reach at 0.8% of these deposits by 3 July 2024

Total Expenses

41

Cost to Income Ratio (C/I ratio)1,3

• Staff costs for 4Q2019 at €53 mn broadly flat qoq
• Operating expenses for 4Q2019 increased to €43 mn,

mainly due to seasonality and lower marketing expenses in 3Q2019 and at similar levels to the previous quarters

• As from 1 January 2020 and by 3 July 2024 the Group is

subject, on a semi-annual basis, on the Contribution to the Deposit Guarantee Fund (DGF). The said contribution of the Group has been set at €2.9 mn for the 1H2020 and it will be charged in 1Q2020 financial results of the Group4 Total operating expenses 3 (€ mn)

59% 1Q2019 59% FY2018 1H2019 9M2019 FY2019 56% 62% 58% 50 52 52 54 56 56 55 53 37 43 34 41 43 38 43 42 100 4Q2018 4 86 1Q2018 96 1Q2019 99 2Q2018 3Q2019 3Q2018 2Q2019 4Q2019 87 95 97 93 Other operating expenses Staff costs unrelated to 4Q2018 Staff costs 7 5 6 7 6 6 6 7 4Q2019 3Q2019 4Q2018 1Q2018 2Q2018 3Q2018 1Q2019 2Q2019

Special Levy and SRF contribution (€ mn)

• C/I ratio1 increased to 59% in FY2019, compared to 58% for

9M2019, principally reflecting the reduction in interest income and increase in operating expenses in 4Q2019

• C/I ratio1 increased by 3 p.p. yoy, mainly due to the increase

in total operating expenses

2 2

Group Financial Results for the year ended 31 December 2019

121 121 108 99 99 60% 64% 67% 68% 70% Dec-17 Dec-18 Sep-19 Dec-19 Mar-20 Branches Digitally engaged

(1) This is the ratio of digitally engaged individual customers to the total number of individual customers as per the engagement scorecard. Digital channels include mobile, browser and ATMs. It also captures access to a card as well as online card purchases

Cost Management Actions Supported by Digital Transformation

42

11% reduction in FTEs following VEP completion Branch footprint rationalisation continues facilitated by digital transformation

Dec-19 Dec-17 Dec-18 Sep-19 4,355 4,146 4,134 3,672

• 11%

1

Management remains focused on further improvement in efficiency

• Successful completion of Voluntary Staff Exit Plan (VEP) in 4Q2019 at
• ne-off cost of €81 mn
• Gross annual savings in staff costs of 13% (€28 mn)
• Annual savings in staff costs net of the impact of the renewal of the

collective agreement for 2019 and 2020 of 11% (€23 mn)

• Staff reduced by 11%
• Additionally, c.100 FTEs relating to Helix were transferred to the buyer

upon full migration in January 2020 Digital Transformation Programme

• Digital Transformation Programme that started in 2017 beginning to

clearly deliver an improved customer experience

• Awarded as Best Consumer Digital Bank in Cyprus for 2019 by Global

Finance

• 70% of customers are digitally engaged1, up 6 p.p. since Dec-18
• Considerable work is going on to further rationalise, modernise and reduce

costs

• 22 branches closed (-18%) in 2019
• Overall 57% reduction in number of branches since 2013

Group Financial Results for the year ended 31 December 2019

Key Information and Contact Details

43

Contacts Investor Relations

Tel: +35722122239, Email: investors@bankofcyprus.com Annita Pavlou Investor Relations Manager Tel: +357 22 122740, Email: annita.pavlou@bankofcyprus.com Elena Hadjikyriacou (elena.hadjikyriacou@bankofcyprus.com), Marina Ioannou (marina.ioannou@bankofcyprus.com) Andri Rousou (andri.rousou@bankofcyprus.com), Stephanie Koumera (stephanie.koumera@bankofcyprus.com)

Executive Director Finance

Eliza Livadiotou, Tel: +35722 122128, Email: eliza.livadiotou@bankofcyprus.com

Visit our website at: www.bankofcyprus.com

Credit Ratings

Standard & Poor’s Global Ratings: Long-term issuer credit rating: Affirmed at “B+” on 30 July 2019 (stable outlook) Short-term issuer credit rating: Affirmed at “B” 30 July 2019 Fitch Ratings: Long-term Issuer Default Rating: Affirmed at “B-" on 29 November 2019 (outlook revised to negative on 7 April 2020) Short-term Issuer Default Rating: Affirmed at “B" on 29 November 2019 Viability Rating: Affirmed at “b-” on 29 November 2019 Moody’s Investors Service: Baseline Credit Assessment: Affirmed at “caa1” on 24 January 2019 Short-term deposit rating: Affirmed at "Not Prime" on 14 June 2019 Long-term deposit rating: Affirmed to “B3” on 14 June 2019 (positive outlook) Counterparty Risk Assessment: Affirmed at B1(cr) / Not-Prime (cr) on 14 June 2019 Listing: LSE – BOCH, CSE – BOCH/ΤΡΚΗ, ISIN IE00BD5B1Y92

Group Financial Results for the year ended 31 December 2019

APPENDIX

Macroeconomic overview

44

Group Financial Results for the year ended 31 December 2019

SOURCE: Statistical Service of Republic of Cyprus; Bloomberg; (1) Normalised against Germany Government bond with maturity 15/8/2025 except Greece (2) Due to the Debt swap of the Hellenic Republic, from November 2017 onwards data for the new Hellenic Republic Bond with maturity 30/01/2028 was used and normalised against the closest maturity of German Government bond (DBR) 15/08/2027 (3) Official estimate from Eurostat’s monthly data (4) SA: Seasonally Adjusted

Cypriot economy grew by 3.2% in 2019; Deterioration of the short term prospects, following the outbreak of COVID-19

45

GDP increased by 3.2% in 2019 COVID-19 pandemic poses serious challenges to sovereign ratings

Dec 12 Mar 13 May 13 Aug 13 Oct 13 Jan 14 Mar 14 Jun 14 Aug 14 Nov 14 Jan 15 Apr 15 Jun 15 Sep 15 Nov 15 Jan 16 Apr 16 Jun 16 Sep 16 Nov 16 Feb 17 Apr 17 Jul 17 Sep 17 Dec 17 Feb 18 May 18 Jul 18 Oct 18 Dec 18 Feb 19 May 19 Jul 19 Oct 19 Dec 19 Mar 20 Cyprus Portugal Italy Spain Greece Ireland

0.1 0.2 0.3 0.4 0.5 0.6

Jan 2018 Mar 2018 May 2018 Jul 2018 Oct 2018 Dec 2018 Feb 2019 Apr 2019 Jun 2019 Sep 2019 Nov 2019 Jan 2020 Mar 2020

Cyprus - maturity 4/11/2025 Portugal - maturity 15/10/2025 Spain - maturity 31/10/2025 Italy - maturity 01/12/2025 Greece - maturity 30/01/2028

Unemployment rate dropped to 7.3% in 2Q2019 SA4 Widening of spreads reflecting uncertainty due to COVID-19 spread

BBB- AA- BB- A BBB

3.3 3.1 3.3 3.2

• 6.5
• 1.9

3.4 6.7 4.4 3.2

• 10.0
• 8.0
• 6.0
• 4.0
• 2.0

0.0 2.0 4.0 6.0 8.0 2011Q4 2012Q4 2013Q4 2014Q4 2015Q4 2016Q4 2017Q4 2018Q4 2019Q4 Real GDP Quarterly SA % change y-o-y Real GDP SA annualised % change y-o-y

4 4

400 358 413 7.5 7.4 7.2 300 320 340 360 380 400 420 440 460 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0

2010Q1 2010Q4 2011Q3 2012Q2 2013Q1 2013Q4 2014Q3 2015Q2 2016Q1 2016Q4 2017Q3 2018Q2 2019Q1

Employment in 000s (4Q average NSA (RHS) Unemployment rate SA (%) 4

2019Q3

S&P credit ratings Spreads (%)

3

Group Financial Results for the year ended 31 December 2019

SOURCES; Statistical Service of Republic of Cyprus, Eurostat; Calculations by BOC Economic Research

Sectors most adversely affected initially by COVID-19 are expected to be Tourism, Trade and Construction accounting for 32% of GDP

46

Economic activity has been broadly based with main drivers tourism and construction Construction activity – strong recovery in FY2019 Support from key business enablers

Corporate tax rates - 2019

40.2% 38.5% 21.3% Upper and post- secondary, non- tertiary Less than Upper secondary Tertiary

Level of education 2019, age 15-64

Cyprus has the highest number of university graduates in the population in the EU after Ireland, at par with UK 31.0% 30.0% 28.0% 25.0% 24.0% 21.0% 19.0% 12.5% 12.5%

Tourism arrivals (mn) Tourism: % changes yoy

2019 2017 0.2 2011 2012 2016 2013 2015 2014 2018 1Q 2019 3.7 1Q 2020 2.4 2.5 2.4 2.4 3.9 2.7 3.2 4.0 0.4

• 31%

11.9 14.6 2020 Mar YTD (Jan for receipts) 2017 2016 2.0 19.8 2018 11.7 7.8 2.7

• 31.0

Total arrivals (% change) Total receipts (% change) 1.2 0.0 0.3 0.2 1.0 1.0 1.5 1.0 1.6 1.6 1.0 0.6 1.5 1.0 0.1 0.6

• 0.8
• 0.5
• 1.0
• 0.4

0.6 0.4 0.6 0.5 0.4 0.6 0.4 0.5 6.7 4.4 4.1 3.2 2016 2017 2018 2019

Arts & Oher Public, Edu. & Health

• Prof. & Admin

Real Est. Financial Information Trade, Tran. & Tour. Construction

18.4 17.3 16.8 17.3 13.8 42.9 41.6 9.3 24.7 0.0 10.0 20.0 30.0 40.0 50.0

% changes year-on-year

Production index in construction Building permits volume

Group Financial Results for the year ended 31 December 2019

APPENDIX

Additional asset quality slides

47

Group Financial Results for the year ended 31 December 2019

The legislative framework1 positively supports organic delivery and the sale of NPEs

48

Other changes Securitisation Law Foreclosure Law Sale of Loans Law

• The July 2018 foreclosure law amendments1 have expedited the process and limited options to frustrate execution
• In July 2019 the Parliament has voted through certain changes to that law which, in the most part, seek to:

–

Provide additional checks and balances where banks are seeking to foreclose small loans (<€350k) secured by a PPR, and

–

Extend the foreclosure timetable by extending various notice periods

• These amendments have not yet passed into law, as the President of the Republic has referred these to the Supreme Court,

based on legal advice from the Attorney General that elements thereof are unconstitutional

• Discussions are on-going, including, inter alia the MoF, the CBC and the Financial Ombudsman, aiming to introduce

amendments to the foreclosure and loan restructuring framework that are acceptable to all stakeholders Tax legislation

• Incentives to customers agreeing consensual solutions continue including exception of capital gains tax and transfer fees in sale
• f property to banks
• Additional exemption for sale of property directly to third party introduced

Insolvency framework

• Changes aim to close gaps and enhance the participation and applicability of personal repayment schemes for physical persons
• Easier for banks to securitise NPΕs
• Regulated by CBC

Amendments1 approved in July 2018 aim to improve the law and close current gaps that hindered the use of the law via: ✓ Improving the framework around transfer of rights and obligations to the buyer

• Regulating the transfer of rights, obligations, benefits, continuity of lawsuits etc between parties
• Splitting of collateral to cover disposed part of loan in case of cross-collateralisation of loans
• Transfer of collaterals to the name of the buyer without further costs

Group Financial Results for the year ended 31 December 2019 TIMEFRAME Foreclosure Decision Service time of Notices Servicing Time +40 days Valuation 30-115 days Service Announcement 3-5 days + Servicing Time+ 30 days Auction Property transfer & Distribution of proceeds 1-50 days immediately after auction

(1) Amendments to the Foreclosure Legislation, the Sale of Loans Law, the Insolvency framework and the introduction of the Securitisation Law came into effect on 13/7/2018 (2) The timeframe up to the first auction of 8 months relates to the period from the commencement of the foreclosure (the foreclosure process is considered to have commenced upon serving notice to the mortgagor) up to the first auction

TIME UP TO AUCTION: ~ 8 MONTHS2

1

Group Financial Results for the year ended 31 December 2019

ESTIA- Government scheme for the resolution of NPEs backed by Primary Residence

49

• Eligible loans to be restructured to lower of contractual and Open Market Value (OMV) (on balance sheet solution)
• Government to subsidise 1/3 of instalment, provided certain eligibility criteria1 are met:

➢ Borrowers with loans linked to a Primary Residence (PR) with OMV ≤ €350k ➢ At least 20% of the total borrower’s credit exposures > 90 days past due as at 30 Sept 2017 ➢ Annual gross income < €20k to €60k, ranging from €20k for single persons to €60k for couples with 4 or more dependents

• Other household’s net assets, excluding the PR <80% of the OMV of the PR. Cap on value of asset of €250k
• European citizen with legal and continuous residency in EU since 2013

Group Financial Results for the year ended 31 December 2019

✓ Restructured loans will exit NPE definition in accordance to the NPE exit criteria1

Clear definition of socially protected borrowers, acting as enabler against non-Estia eligible borrowers Expected to resolve part of ESTIA-eligible portfolio, identify non-viable (vulnerable) customers and facilitate resolution of remaining customers through alternative solutions

Scheme summary

(1) Please refer to slide 75 for the NPE forborne exit criteria

Group Financial Results for the year ended 31 December 2019

47% 56% 69% 63% 100% 79% 73% 84% 100% 78% 70% 85% 59% 80% 74% 74% 72% 73% 69% 58% 89% 88% 81% 85% 97% 96% 79% 88% 100% 75% 79% 80% 100% 94% 88% 94%

Corporate SMEs Retail Total Bank - Cyprus

3Q2017 4Q2017 1Q2018 2Q2018 3Q2018 4Q2018 1Q2019 2Q2019 3Q2019 74% 80%

Weighted Avg since Sep-17 (1) Write offs in 1Q2018 include a net impact of (c.€11 mn) of IFRS 9 grossing up and set offs (2) Excluding write offs & non contractual write offs and DFAs and terminated accounts (3) The performance of loans restructured during 4Q2019 is not presented in this graph as it is too early to assess

Restructuring efforts continue; re-default levels stable

50

Quarterly evolution of restructuring activity (Cy operations) Cohort analysis of restructured 2,3 loans; 80% of restructured loans present no arrears

Corporate SMEs Retail Total Bank – Cyprus

1

NO ARREARS

78% 92%

3Q2018 0.28 0.52 0.10 0.06 0.02 1Q2018 1Q2019 0.09 0.10 2Q2018 4Q2018 0.05 2Q2019 0.06 0.02 4Q2019 3Q2019 0.12 0.79 0.31 0.37 0.13 0.07 0.34 0.15 0.18 0.40 0.27 0.29 0.16 0.14 0.13 0.16 0.11 0.07 0.12 0.08 0.12 0.07 Restructured loans Write-offs & non-contractual write-offs DFAs € bn

Group Financial Results for the year ended 31 December 2019

Fair value of collateral and adequacy of loan credit losses

51

NPE Coverage at 54%

• Resolution of cases within loan credit losses

continued in 4Q2019

• Back-testing of c.17k fully settled customers over

last 20 quarters on average within c.10% surplus

• ver net book value

Back-testing of loan credit losses supports past loan credit losses adequacy

Quarter Gross Contractual Balance € mn Surplus/(Gap) in loan credit losses€ mn

• No. of Customers

1Q2015 6.0 1.4 148 2Q2015 79.2 16.0 242 3Q2015 20.2 0.0 441 4Q2015 65.7

• 2.1

551 1Q2016 158.3 0.5 1,276 2Q2016 266.9 12.1 2,298 3Q2016 124.5 13.9 115 4Q2016 71.9

• 1.1

2,343 1Q2017 119.2 1.2 2,194 2Q2017 200.9 7.5 2,369 3Q2017 75.7 7.8 1,081 4Q2017 137.6 1.8 498 1Q2018 71.7

• 3.9

427 2Q2018 44.1 2.6 390 3Q2018 37.4

• 0.2

343 4Q2018 47.9 1.6 322 1Q2019 excl. Helix 31.9 1.3 319 2Q2019 39.6 1.6 878 3Q2019 44.1 2.1 336 4Q2019 36.1 2.2 305 1,678.9 66.3 16.876

Loans and advances to customers 31 Dec 2019 (€ mn)

Cash 435 Securities 638 Letters of credit / guarantee 171 Property 15,537 Other 1,404 Surplus collateral (8,557) Net collateral 9,628

Fair value of collateral and credit enhancements

40 47 47 40 30 29 10 20 30 40 50 60 10 20 30 40 50 52% 2Q2019 4Q2018 53% 1Q2019 pro forma for Helix 1Q2019 48% 50% 51% 3Q2019 54% 4Q2019 Cash coverage Loan credit losses € mn

Group Financial Results for the year ended 31 December 2019

Continuous progress across all segments (Cy operations)

52

Focus shifts to Retail and SME after intense Corporate attention

Corporate Dec 2019 Terminated Retail Terminated Corporate SME Terminated SMEs 1.64 Retail 0.79

NPEs (Cy) €3.79 bn

0.47 0.25 0.11 0.53 €2.43 bn €0.64 bn €0.72 bn Retail SME Corporate Dec 18 Sep 19 (0.41) Inflows Helix Exits 0.08 (1.99) (0.05) 3.01 Exits Dec 19 0.69 0.64 Sep 19 0.03 Exits (0.36) Inflows Dec 18 (0.56) Helix 0.01 Inflows (0.15) Exits Dec 19 0.86 1.75 0.72 (0.11) Inflows 0.13 Dec 18 Exits Inflows (0.05) Sep 19 Helix 0.02 (0.03) Exits Dec 19 2.47 2.44 2.43 Dec 2019

NPE ratio 13% NPE coverage 49% NPE total coverage 103% Dec 2019 NPE ratio 38% NPE coverage 52% NPE total coverage 124% Dec 2019 NPE ratio 41% NPE coverage ➢ Retail Housing 48% ➢ Retail Other 64% NPE total coverage 125%

1

€ bn

Group Financial Results for the year ended 31 December 2019

(1) Reporting as at 31 December 2017 includes transfers within RRD business lines following an internal reorganisation of RRD in 4Q2017

Gross loans and NPEs by Customer Type

53

Gross loans by customer type (€ bn)

Sep 19 1.87 4.35 Dec 17 Dec 16 9.01 Dec 18 Dec 19 20.13 18.75 15.90 2.74 4.22 13.04 12.82 4.07 9.47 4.08 1.79 2.09 3.51 4.17 5.03 2.06 7.06 2.98 4.07 2.06 1.88 2.21 1.92

Global Corporate Retail other Corporate Retail Housing SMEs

1.77 Dec 16 Dec 19 Dec 17 Dec 18 Sep 19 0.16 0.87 0.56 11.03 4.08 7.42 8.80 3.88 5.00 2.99 1.27 3.99 2.02 1.57 0.77 1.22 3.19 1.76 1.49 0.98 1.41 1.03 0.73 1.39 1.04

NPEs by customer type (€ bn)

1 1

Group Financial Results for the year ended 31 December 2019

(1) Restricted to Gross IFRS balance

NPE Coverage and Total coverage by segment (Cy)

54

Coverage and collateral maintained post NPE sale (Helix)

1

Total Cyprus €3.79 bn Corporate €0.53 bn SME €0.72 bn Retail-Housing €1.39 bn Retail-Other €1.04 bn Global Corporate: €0.11 72% 51% 54% 51%

Dec 18

50% 126%

Dec 19

54% 57% 118%

Sep 19 Dec 19 Sep 19

57% 43%

Dec 19

70% 57%

Dec 18

67% 58%

Dec 18

56% 58% 72% 52% 100% 84% 131% 123% 39% 51%

Dec 18 Sep 19

85% 121% 41% 118% 83% 127% 48%

Dec 19

60% 64% 54%

Dec 19 Sep 19

72%

Dec 18

104% 53% 69% 50% 119% 123% 123%

Sep 19 Dec 19

124% 105% 123% 115% 68% Tangible Collateral Allowance for expected loan credit losses

Group Financial Results for the year ended 31 December 2019

Asset quality- NPE analysis

55 (€ mn)

Dec-19 Sep-19 Jun-19 Mar-19 Dec-18

• A. Gross Loans after Residual Fair value adjustment on initial

recognition 12,551 12,757 12,782 15,437 15,438 Residual Fair value adjustment on initial recognition 271 278 290 445 462

• B. Gross Loans

12,822 13,035 13,072 15,882 15,900

• B1. Loans with no arrears

8,820 8,794 8,565 8,402 8,260

• B2. Loans with arrears but not NPEs

122 156 195 207 221 1-30 DPD 88 119 150 138 166 31-90 DPD 34 37 45 69 55

• B3. NPEs

3,880 4,085 4,312 7,273 7,419 With no arrears 722 802 949 1,356 1,482 Up to 30 DPD 54 69 89 108 136 31-90 DPD 76 86 125 183 231 91-180 DPD 121 159 149 240 178 181-365 DPD 263 251 225 316 393 Over 1 year DPD 2,644 2,718 2,775 5,070 4,999 NPE ratio (NPEs / Gross Loans) 30% 31% 33% 46% 47% Allowance for expected loan credit losses (including residual fair value adjustment on initial recognition1) 2,096 2,086 2,145 3,846 3,852 Gross loans coverage 16% 16% 16% 24% 24% NPEs coverage 54% 51% 50% 53% 52%

(1) Comprise (i) loan credit losses for impairment of customer loans and advances, (ii) the residual fair value adjustment on initial recognition of loans acquired from Laiki Bank and on loans classified at FVPL, and (iii) loan credit losses on off-balance sheet exposures disclosed on the balance sheet within other liabilities

Group Financial Results for the year ended 31 December 2019

Analysis of gross loans and NPE ratio by Economic activity

56

Gross loans by economic activity (€ bn)

2.04 0.66 1.39 2.34 3.20 6.77 1.31 1.04 1.85 0.64 1.27 1.95 1.61 6.47 1.20 0.91 1.41 0.47 1.08 0.89 1.29 6.10 1.04 0.76 1.36 0.47 1.08 0.85 1.29 6.02 1.00 0.75 Trade Manufacturing Hotels & Restaurant Construction Real Estate Private Individuals Professional and

• ther services

Other sectors 31.12.17 31.12.18 30.09.19 31.12.19 10% 11% 47% 8% 6% 7% 8% 3%

NPE ratio by economic activity

45% 53% 32% 76% 33% 45% 52% 51% 49% 52% 28% 68% 53% 43% 46% 34% 32% 29% 8% 36% 24% 38% 32% 17% 31% 27% 7% 34% 23% 37% 31% 17% Trade Manufacturing Hotels and Catering Construction Real estate Private individuals Professional and

• ther services

Other sectors 31.12.17 31.12.18 30.09.19 31.12.19

% of total

Group Financial Results for the year ended 31 December 2019

(1) Reporting as from 31 December 2017 includes transfers within RRD business lines following an internal reorganisation of RRD in 4Q2017

Rescheduled Loans for the Cyprus Operations

57

Rescheduled loans by customer type (€ bn)

1.7 0.4 0.5

Dec 16

0.4 6.3

Dec 17

1.3 0.5 0.5

Sep 19 Dec 18

0.5 4.8 0.4

Dec 19

7.4 2.9 2.7 3.4 0.6 1.7 3.0 0.6 1.4 2.2 1.0 1.0 1.1 0.9 1.0 Corporate Retail housing Global Corporate Retail other SMEs

Rescheduled loans1 % gross loans by customer type

32% SMEs Retail Consumer 40% Corporate Global Corporate 44% Retail Housing 18% 16% 15% 41% 40% 34% 40% 24% 28% 35% 29% 26% 24% 27% 27% 25% 28% 23%

Dec 19 Dec 16 Sep19 Dec 17 Dec 18

Rescheduled loans-Asset Quality

31 December 2019 € ‘000 Stage 1 357,772 Stage 2 299,471 Stage 3 1,605,588 POCI 206,734 FVPL 228,804 Total 2,698,369

Group Financial Results for the year ended 31 December 2019

(1) Includes purchased or originated credit-impaired

Gross loans and allowance for expected loan credit losses by IFRS 9 Stage

58

Gross Loans (€ bn) 31 Dec 2019 30 Sep 2019 qoq %

Stage 1 7.21 6.26 15% Stage 21 1.73 2.70

• 35%

Stage 31 3.88 4.08

• 5%

Total 12.82 13.04

• 2%

Allowance for expected loan credit losses (€ bn) 31 Dec 2019 30 Sep 2019 qoq %

Stage 1 0.09 0.08 10% Stage 21 0.05 0.07

• 37%

Stage 31 1.96 1.94 1% Total 2.10 2.09 0%

• Increase in Stage 1 gross loans by c. €950 mn in

4Q2019, mainly due to loan migration from Stage 2 to Stage 1 mainly due to the reduction in credit risk and the improvement in probabilities of default

• Net organic reduction of Stage 3 loans by €205 mn

in 4Q2019

Group Financial Results for the year ended 31 December 2019

REMU – the engine for dealing with foreclosed assets

59

Total Book Value Sales of €455 mn for the FY2019 Encouraging trends in Real Estate Market; property prices up 2.8% in 2Q20192

42 30 62 67 48 160 88 4Q2018 1Q2019 Nicosia Mall 3Q2019 2Q2019 4Q2019 Cyreit 103 196 112 (5)

Impairment loss

1,427

Additions Properties managed by REMU as at 01 Jan 2019

(24) (207)

Sales Transfer to non- current assets and disposal groups held for sale

1,378

Properties managed by REMU as at 31 Dec 2019

1,530 1,490

Investment Properties

REMU focuses now on sales

77.6 2.7 2.8

• 3.0
• 2.0
• 1.0

0.0 1.0 2.0 3.0 4.0

30.0 50.0 70.0 90.0 110.0

Q42015 Q22016 Q42016 Q22017 Q42017 Q22018 Q42018 Q22019

Central Bank Residential Property Price index

Residential Propert Price index (2010Q1=100) % change y-o-y (RHS)

Sales contracts (excl. DFAs) in 2019 up 12% yoy3

2012 2010 2008 10.366 2013 2019 2009 2011 1Q2020 2018 2014 2015 2016 2017 5.885 4.481 1Q2019 2.366 8.734 9.242 1.991

• 16%

Sales to Cypriots Sales to non-Cypriots BV € mn

(1) In addition to assets held by REMU, properties classified as “Investment properties” with carrying value of €24 mn as at 31 December 2019 relate to legacy properties (2) Based on Residential price index published by Central Bank, dated 8 January 2020 (3) Based on data from Land of Registry- Sales contracts 1

Sales: €207 mn

€ mn

Group Financial Results for the year ended 31 December 2019

APPENDIX

Additional financial information

60

Group Financial Results for the year ended 31 December 2019

Liability and Equity (€ mn) 31.12.2019 31.12.18 (restated) % change Deposits by banks 533 432 23% Funding from central banks

• 830
• 100%

Repurchase agreements 168 249

• 32%

Customer deposits 16,692 16,844

• 1%

Subordinated loan stock 272 271 0% Other liabilities 1,169 1,082 8% Total liabilities 18,834 19,708

• 4%

Shareholders’ equity 2,040 2,121

• 4%

Other equity instruments 220 220

• Total equity excluding non-

controlling interests 2,260 2,341

• 3%

Non controlling interests 29 26 10% Total equity 2,289 2,367

• 3%

Total liabilities and equity 21,123 22,075

• 4%

Consolidated Balance Sheet

61 Assets (€ mn) 31.12.2019 31.12.2018 (restated) % change Cash and balances with Central Banks 5,060 4,610 10% Loans and advances to banks 321 473

• 32%

Debt securities, treasury bills and equity investments 1,906 1,515 26% Net loans and advances to customers 10,722 10,922

• 2%

Stock of property 1,378 1,427

• 3%

Investment properties 136 127 6% Other assets 1,574 1,531 3% Non current assets and disposal groups classified as held for sale 26 1,470

• 98%

Total assets 21,123 22,075

• 4%

Comparative information was restated following the change in the classification of stock of properties which are leased out under operating leases as ‘investment properties’. For further information on restatements

• n comparative information, please refer to Note 2.38 of the Consolidated

Financial Statements for the year ended 31 December 2019. The changes did not have an impact on the results for the year or the equity of the Group.

Group Financial Results for the year ended 31 December 2019

Core Cypriot business

62

Average contractual interest rates (bps) (Cy)

37.5% 37.1% 45.4% 47.1% 41.3% 40.8% 41.1% 31.1% 32.8% 36.0% 34.7% 34.7% 34.6% 35.1% Dec 16 Dec 17 Dec 18 May 19 before Helix Jun 19 after Helix Sep 19 Dec 19 Loans Deposits

Strong market shares in resident and non-resident deposits

29.5% 31.5% 34.1% 35.3% 34.6% 34.9% 35.8% 37.3% 38.8% 38.3% 34.7% 35.8%

Dec 16 Dec 17 Jun 18 Dec 18 Sep 19 Dec 19 Residents Non-residents

77 58 47 39 33 1 1 1 1 1

• 50
• 30
• 10

4Q2018 1Q2019 2Q2019 3Q2019 4Q2019

Time & Notice accounts Savings and Current accounts 475 468 460 413 402 396 41 32 24 24 19 16 434 436 436 389 383 380

4Q2018 1Q2019 2Q2019 2Q2019 (excluding Helix) 3Q2019 4Q2019 Yield on Loans Cost of Deposits Customer spread

Market shares1 Customer deposit rates decline further (bps) (Cy)

(1) The market share on loans was affected as from 30 September 2018 following a decrease in total loans in the banking sector, mainly attributed to €6 bn non-performing loans of Cyprus Cooperative Bank (CyCB) which remained to SEDIPES (a legal entity without license to operate as a credit institution) as a result of the agreement between CyCB and Hellenic Bank

32 41 24 19

Cost of deposits

16

Group Financial Results for the year ended 31 December 2019

Income Statement bridge1 for FY2019

63

€ mn Underlying basis Helix Portfolio NPE sales Investment in associate Tax related items Other Statutory Basis Net interest income 344 34

• (12)

366 Net fee and commission income 150 12

• 162

Net foreign exchange gains and net gains on financial instrument transactions and disposal/dissolution of subsidiaries and associates 38

• 7

45 Insurance income net of claims and commissions 58

• 58

Net gains from revaluation and disposal of investment properties and on disposal of stock of properties 32

• (4)

28 Other income 29

• 29

Total income 651 46

• (9)

688 Total expenses (410) (36) (15)

• (19)

(113) (593) Operating profit 241 10 (15)

• (19)

(122) 95 Loan credit losses (146) (16) (71)

• 9

(224) Impairments of other financial and non-financial instruments (22)

• (8)
• (30)

Provisions for litigation, claims, regulatory and other matters (10)

• 10
• Remeasurement of investment in associate upon classification as held for sale
• (26)
• (26)

Share of profit from associate

• 5
• 5

Profit/loss) before tax and non-recurring items 63 (6) (86) (21) (27) (103) (180) Tax (3)

• 115
• 112

Profit attributable to non-controlling interests (2)

• (2)

Profit/ (loss) after tax and before non-recurring items (attributable to the owners of the Company) 58 (6) (86) (21) 88 (103) (70) Advisory and other restructuring costs - organic (22)

• 22
• Profit/ (loss) after tax – Organic (attributable to the owners of the Company)

36 (6) (86) (21) 88 (81) (70) Restructuring costs – Voluntary Staff Exit Plan (VEP) (81)

• 81
• Provisions/net loss relating to NPE sales

(92) 6 86

• Loss on remeasurement of investment in associate upon classification as held for sale (CNP) net of share of profit from

associates (21)

• 21
• Reversal of impairment of DTA and impairment of other tax receivables

88

• (88)
• Loss after tax - attributable to the owners of the Company

(70)

• (70)

(1) Please refer to section B1 “Unaudited reconciliation of Income Statement for the year ended 31 December 2019 between statutory and underlying basis” of the Group Financial Results

Group Financial Results for the year ended 31 December 2019

Analysis of Interest Income and Interest Expense

64

(1) Interest income on loans and advances to customers for 1Q2019 increased from €101 mn to €104 mn and Interest income on loans and advances to banks and central banks decreased to €2 mn from €5 mn since previously disclosed on 13 May 2019, due to reclassification of between exposures (2) The interest income, non-interest income, staff costs, other operating expenses and loan credit losses related to Project Helix are disclosed under ‘Provisions/net loss relating to NPE sales’ since they are considered one-off items

Analysis of Interest Income (€ mn) 1Q20191,2 2Q20192 3Q2019 4Q2019 Loans and advances to customers 104 101 105 98 Loans and advances to banks and central banks 2 2 1 1 Investment at amortised costs 3 3 3 3 Investments FVOCI 5 5 6 5 Investments classified as loans and receivables

• 114

111 115 107 Trading Investment

• Derivative financial instruments

9 9 9 10 Other investments at fair value through profit or loss

• Total Interest Income

123 120 124 117 Analysis of Interest Expense (€ mn) Customer deposits (13) (10) (8) (8) Funding from central banks and deposits by banks (1) (1) (1) (0) Subordinated loan stock (6) (6) (6) (6) Repurchase agreements (2) (2) (2) (2) Negative interest on loans and advances to banks and central banks (4) (4) (5) (5) (26) (23) (22) (21) Derivative financial instruments (12) (12) (12) (12) Total Interest Expense (38) (35) (34) (33)

Group Financial Results for the year ended 31 December 2019

Cyprus: Income Statement by business line1 for FY2019

65

(1) The interest income, non-interest income, staff costs, other operating expenses and loan credit losses related to Project Helix are disclosed under ‘Provisions/net loss relating to NPE sales’ since they are considered one-off items

€ mn Consumer Banking SME Banking Corporate Banking Global corporate International Banking Wealth & Markets RRD REMU Insurance Treasury Other Total Cyprus Net interest income/(expense) 145 37 64 54 34 7 19 (13) 1 4 352 Net fee & commission income (expense) 45 9 11 6 50 2 21

• (6)

2 10 150 Other income 3 1 1 1 7 3

• 34

58 21 26 155 Total income 193 47 76 61 91 12 40 21 52 24 40 657 Total expenses (171) (23) (22) (11) (37) (8) (61) (9) (21) (10) (27) (400) Operating profit/(loss) 22 24 54 50 54 4 (21) 12 31 14 13 257 Loan credit losses of customer loans net of gains/(losses) on derecognition of loans and changes in expected cash flows (5) 9 15 22 1

• (181)

(4)

• (4)

(147) Impairment of other financial and non financial instruments

• (11)
• (4)

(15) Provision for litigation, claims, regulatory and other matters

• (11)

(11) Profit/(loss) before tax 17 33 69 72 55 4 (202) (3) 31 14 (6) 84 Tax (2) (4) (9) (9) (7)

• 25

(3) (1) 8 (2) Profit attributable to non controlling interest

• (3)

(3) Profit/(loss) after tax and before restructuring costs, Helix, and reversal of DTA impairment and impairment of tax receivables (attributable to

• wners of the Company)

15 29 60 63 48 4 (177) (3) 28 13 (1) 79

Excluding Helix

Group Financial Results for the year ended 31 December 2019

Risk Weighted Assets – Regulatory Capital

66

Risk weighted assets by type of risk (€ mn) Reconciliation of Group Equity to CET1 Risk weighted assets by Geography (€ mn) Equity and Regulatory Capital (€ mn)

(1) Allowing for IFRS 9 transitional arrangements (2) Capital ratios include unaudited/un-reviewed profits for 9M2019

€ mn 31.12.19 Group Equity per financial statements 2,289 Less: Intangibles (51) Less: Deconsolidation of insurance and other entities (187) Add: Regulatory adjustments (IFRS 9 and other items) 111 Less: Revaluation reserves and other unrealised items transferred to Tier II (253) CET11 1,909 Risk Weighted Assets 12,890 CET1 ratio 1 14,8% 31.12.18 30.09.192 31.12.19 Total equity excl. non-controlling interests 2,341 2,454 2.260 CET1 capital 1,864 2,098 1,909 Tier I capital 2,084 2,318 2,129 Tier II capital 212 188 190 Total regulatory capital (Tier I + Tier II) 2,296 2,506 2,319 31.12.17 31.12.18 30.09.19 31.12.19 Cyprus 16,011 15,070 13,550 12,678 Russia 27 24 15 8 United Kingdom 922 84 69 48 Romania 118 38 16 29 Greece 168 144 102 121 Other 14 13 6 6 Total RWA 17,260 15,373 13,758 12,890 RWA intensity 73% 70% 65% 61% 31.12.17 31.12.18 30.09.19 31.12.19 Credit risk 15,538 13,833 12,219 11,547 Market risk 5 2

• Operational risk

1,717 1,538 1,539 1,343 Total 17,260 15,373 13,758 12,890

Group Financial Results for the year ended 31 December 2019

Unchanged SREP capital requirements for 2020 when ignoring the phasing-in of O-SII1

67

SREP requirements for 2020 : Total Capital ratio at 14.5% SREP requirements for 2020: CET1 ratio at 9.7% post ECB announcement

• Per EBA final guidelines on SREP and supervisory stress testing and the Single Supervisory Mechanism’s (SSM) 2018 SREP methodology own funds held for the

purposes of Pillar II Guidance cannot be used to meet any other capital requirements (Pillar 1, Pillar II requirement or the combined buffer requirements), and therefore cannot be used twice5

• The Bank has received formal notification from the Single Resolution Board (SRB), of its draft decision for the binding minimum requirement for own funds and

eligible liabilities (MREL) for the Bank, determined as the preferred resolution point of entry. The MREL requirement has been set at 28.36% of risk weighted assets as of 30 June 2019 and must be met by 31 December 2025. This MREL requirement would be equivalent to 18.54% of total liabilities and own funds (TLOF) as at 30 June 2019. The MREL requirement is in line with the Bank’s expectations, and largely in line with its funding plans6

• The MREL ratio of the Bank as at 31 December 2019, calculated according to SRB’s eligibility criteria currently in effect, and based on our internal estimate stood at

18.54% of RWAs

1.7% 4.5% 3.0% 4.5% 2.5% 3.0%

O-SII

0.5%

2.5%

1.0%

2019

4.5%

2020

1.0% 2.5%

2020 post ECB announcement CCB Pillar 2R Pillar 1 10.5% 11.0% 9.7%

4.5% 0.5% 2.5%

Tier 2

3.0% 4.5%

2019

2.0% 1.5% 1.0%

14.0%

2.5%

3.0%

2.0% 1.5%

2020 O-SII CCB 14.5% Pillar 2R AT1 Pillar 1

Total Pillar 1

• f 8%

1 4 2 3 1 2 3 (1) The Central Bank of Cyprus (CBC) set the O-SII buffer for the Group at 2%. This buffer will be phased-in gradually, having started from 1 January 2019 at 0.5% and increasing by 0.5% every year thereafter, until being fully implemented (2.0%) on 1 January 2022. In April 2020 the CBC, as part of the COVID measures, decided to delay the phasing-in by 12 months (1 January 2023). As a result, the phasing-in of 0.5% on 1 January 2021 has been delayed for 12 months (2) In accordance with the legislation in Cyprus which has been set for all credit institutions the applicable rate of the CCB was fully phased in at 2.5% in 2019 (3) Pillar 2 requirement in the form of CET1 (4) Additional Tier 1 Capital (5) The new provisions are expected to be effective from January 2020 and remain subject to ECB final confirmation (6) The MREL requirements remain subject to final confirmation by the SRB. This decision is based on the current legislation, it is expected to be updated annually and could be subject to subsequent changes by the resolution authorities, especially considering the developments of the Bank Recovery and Resolution Directive (BRRD) and its transposition into the local legislation

Group Financial Results for the year ended 31 December 2019

Buffer to MDA Restrictions Level & Distributable Items1

68

Distributable Items at Bank and BOCH level Maximum Distributable Amount for BOCH

• Distributable Items amount to:
• Bank: c.€0.1 bn and
• BOCH: c.€0.3 bn
• Reduction in distributable items during 4Q2019 is attributable mainly to

the Voluntary Staff Exit Cost (VEP) of c. €81 mn and increased loan credit losses of €75 mn for the anticipated balance sheet de-risking through further NPEs in the future

• The Bank and BOCH will proceed with a capital reduction process

which will result in the reclassification of €619 mn and €700 mn of share premium to distributable reserves respectively

• Distributable reserves of Bank and BOCH will increase to c. €0.8 bn and c. €1 bn

respectively, on a pro forma basis as at 31 Dec 2019

• Subject to approvals by ECB, Cyprus and Irish High Court and shareholders
• No prohibition applies to the payment of coupons on any AT1 capital

instruments issued by the Company and the Bank2

• Significant CET1 MDA buffer3 (1 Jan 2020) : ~320 bps (~€410 mn)
• ECB frontloaded the ability to use AT1 and T2 to meet P2R

requirement; this increases CET1 and MDA buffer by c.131 bps

11.0% 0.3% 14.5% CET11 Jan 2020 1 Jan 20203 MDA Threshold

CET1 Ratios

Unfilled AT1 + T2 capacity

320 bps

[ ] bps Distance to MDA

CET1

Ratio (%)

CET1

Req Unfilled AT1 & T2 Bucket

• c. 11.3%

11.0%

(1) Distributable Items definition per CRR (2) Based on the SREP decisions of prior years, the Company and the Bank were under a regulatory prohibition for equity dividend distribution and therefore no dividends were declared or paid during years 2019 and 2018. Following the 2018 SREP decision, the Company and the Bank are still under equity dividend distribution prohibition. This prohibition does not apply if the distributions are made via the issuance of new ordinary shares to the shareholders which are eligible as CET1 capital (3) Including phasing in of O-SII buffer (+50 bps). The Central Bank of Cyprus (CBC) set the O-SII buffer for the Group at 2%. This buffer will be phased-in gradually, having started from 1 January 2019 at 0.5% and increasing by 0.5% every year thereafter, until being fully implemented (2.0%) on 1 January 2022. In April 2020 the CBC, as part of the COVID measures, decided to delay the phasing-in by 12 months (1 January 2023). As a result, the phasing-in of 0.5% on 1 January 2021 has been delayed for 12 months

Group Financial Results for the year ended 31 December 2019

(1) The reduction relates to the sale of BOC UK in Sep 18

Analysis of Deposits

69

Deposits by Currency (€ bn) Deposits by customer Sector (€ bn) Deposits by Type (€ bn)

12.40 13.83 14.96 14.75 15.01 2.20 1.74 1.48 1.69 2.11 0.11 0.10 0.10

16.47 Dec 17

0.17 0.22 1.34 0.28

Dec 16

0.29

Dec 18 Sep 19

0.29 1.29

Dec 19 16.51 17.85 16.84 16.69 9.27 10.00 8.78 7.94 7.53 6.18 6.31 6.71 7.07 7.59 1.54 Dec 17 1.06 16.84 Dec 16 1.35 Dec 18 1.46 Sep 19 1.57 Dec 19 16.51 17.85 16.47 16.69 6.73 6.63 5.96 5.80 5.05 8.98 10.31 10.05 9.88 10.15 0.80 Dec 17 0.91 Dec 16 0.83 Dec 18 0.79 Sep 19 0.80 0.69 Dec 19 16.51 17.85 16.84 16.47 16.69

1 1 1

Current & demand accounts Savings accounts Time deposits Other Currencies EUR GBP USD Retail SME Corporate Global Corporate 90% 8% 2% 9% 45% 46% 30% 5% 61% 4%

Dec 19

Group Financial Results for the year ended 31 December 2019

Reduction in Overseas Non-Core Exposures

70

Overseas non-core exposures (€ mn)

• The

Group continues its efforts for further deleveraging and disposal of non-essential assets and

• perations in Greece, Romania and Russia
• In accordance with the Group’s strategy to exit from
• verseas non-core operations, the operations of the

branch in Romania were terminated in January 2019, following the completion of deregistration formalities with respective authorities

• In addition as at 31 December 2019, there were €265

mn of overseas exposures in Greece (€279 mn at 30 September 2019) not identified as non-core exposures

• During 3Q2019 the Group completed the sale of the
• verseas exposures in Serbia, with a carrying value of

€8 mn

283 193 164 138 139 42 149 79 35 32 25 44 31 23 19 7 Sep 19 9 518 Dec 16 Dec 17 11 Dec 18 18 Dec 19 312 240 188 183 Greece Serbia Romania Russia UK

Group Financial Results for the year ended 31 December 2019

APPENDIX

Glossary & Definitions

71

Group Financial Results for the year ended 31 December 2019

Glossary & Definitions

72

Allowance for expected loan credit losses (previously ‘Accumulated provisions’) Comprises (i) allowance for expected credit losses (ECL) on loans and advances to customers (including allowance for expected credit losses on loans and advances to customers held for sale), (ii) the residual fair value adjustment on initial recognition of loans and advances to customers, (iii) allowance for expected credit losses for off-balance sheet exposures (financial guarantees and commitments) disclosed on the balance sheet within other liabilities, and (iv) the aggregate fair value adjustment on loans and advances to customers classified and measured at FVPL Advisory and other restructuring costs Comprise mainly: fees of external advisors in relation to: (i) disposal of operations and non-core assets, and (ii) customer loan restructuring activities AIEA Average of interest earning assets as at the beginning and end of the relevant quarter. Interest earning assets include: cash and balances with central banks, plus loans and advances to banks, plus net loans and advances to customers (including loans and advances to customers classified as non-current assets held for sale), plus investments (excluding equities and mutual funds) AT1 AT1 (Additional Tier 1) is defined in accordance with Articles 51 and 52 of the Capital Requirements Regulation (EU) No 575/2013, as amended by CRR II applicable as at the reporting date Average contractual interest rates Interest rates on cost of deposits were previously calculated as the Interest Expense over Average Balance. The current calculation which the Bank considers more appropriate is based on the weighted average of the contractual rate times the balance at the end of the month. The rates are calculated based on the month end contractual interest rates. The quarterly rates are the average

• f the three quarter month end contractual rates

Book Value BV= book value = Carrying value prior to the sale of property CET1 capital ratio (transitional basis) CET1 capital ratio (transitional basis) is defined in accordance with the Capital Requirements Regulation (EU) No 575/2013, as amended by CRR II applicable as at the reporting date CET1 fully loaded (FL) The CET1 fully loaded (FL) ratio is defined in accordance with the Capital Requirements Regulation (EU) No 575/2013, as amended by CRR II applicable as at the reporting date Cost of Funding Effective yield of cost of funding: Interest expense of all interest bearing liabilities after hedging, over average interest bearing liabilities (customer deposits, funding from the central bank, interbank funding, subordinated liabilities). Historical information has been adjusted to take into account hedging Contribution to SRF Relates to the contribution made to the Single Resolution Fund Cost to Income ratio Cost-to-income ratio comprises total expenses (as defined) divided by total income (as defined) Cost of Risk Loan credit losses charge (cost of risk) (year to date) is calculated as the annualised ‘loan credit losses’ (as defined) divided by average gross loans (the average balance is calculated as the average of the opening balance and the closing balance) CRR DD Default Definition DFAs Debt for Asset Swaps DFEs Debt for Equity Swaps Digitally engaged customers ratio This is the ratio of digitally engaged individual customers to the total number of individual customers, as per the engagement scorecard. Digital channels include mobile, browser and ATMs. It also captures access to a card as well as online card purchases DTA Deferred Tax Assets

Group Financial Results for the year ended 31 December 2019

Glossary & Definitions

73

DTC Deferred Tax Credit EBA European Banking Authority ECB European Central Bank Effective yield Interest Income on Loans/Average Net Loans Effective yield of liquid assets Interest Income on liquids after hedging, over average liquids (Cash and balances with central banks, placements with banks and bonds). Historical information has been adjusted to take into account hedging ESMA European Securities and Markets Authority Foreclosures Value of on-boarded assets is set at a conservative 25%-30% discount from open market valuations, by two independent sources; Includes consensual and non consensual DFAs and DFEs FTP Fund transfer pricing methodologies applied between the business lines to present their results on an arm’s length basis GBV Gross Book Value Gross Loans Gross loans are reported before the residual fair value adjustment on initial recognition relating to loans acquired from Laiki Bank (calculated as the difference between the outstanding contractual amount and the fair value of loans acquired) amounting to €271 mn at 31 December 2019 (compared to €278 mn at 30 September 2019 and €462 mn at 31 December 2018). Additionally, gross loans (i) include loans and advances to customers classified and measured at fair value through profit and loss adjusted for the aggregate fair value adjustment of €427 mn at 31 December 2019 (compared to €430 mn at 30 September 2019 and €456 mn as at 31 December 2018), and (ii) are reported after the reclassification between gross loans and allowance for expected credit losses on loans and advances to customers classified as held for sale of Nil as at 31 December 2019 (compared to Nil as at 30 September 2019 and €99 mn at 31 December 2018) Gross Sales Proceeds Proceeds before selling charge and other leakages GVA Gross Value Added Group The Group consists οf Bank of Cyprus Holdings Public Limited Company, “BOC Holdings” or the “Company”, its subsidiary Bank of Cyprus Public Company Limited, the “Bank” and the Bank’s subsidiaries H/O Head Office IB, W&M International Banking, Wealth and Markets IBU Servicing exclusively international activity companies registered in Cyprus and abroad and not residents

Group Financial Results for the year ended 31 December 2019

Glossary & Definitions

74

Legacy Legacy relates to RRD, REMU and non-core overseas exposures Loan credit losses (PL) (previously ‘Provision charge’) Loan credit losses comprise: (i) credit losses to cover credit risk on loans and advances to customers, (ii) net gains on derecognition of financial assets measured at amortised cost and (iii) net gains

• n loans and advances to customers at FVPL

Market shares Both deposit and loan market shares are based on data from the Central Bank of Cyprus. The Bank is the single largest credit provider in Cyprus with a market share of 41.1% at 31 December 2019, compared to 40.8% at 30 September 2019, 41.3% at 30 June 2019, 46.7% at 31 March 2019, 45.4% at 31 December 2018 and as at 30 September 2018, 38.6% at 30 June 2018 and 37.4% at 31 March 2018. The market share on loans was affected as at 30 June 2019 following the derecognition of the Helix portfolio upon the completion of Project Helix announced on 28 June 2019. The market share on loans was affected during the quarter ended 31 March 2019 following a decrease in total loans in the banking sector of €1 bn, mainly attributed to reclassification, revaluation, exchange rate and other adjustments (CBC). The market share on loans was affected as at 30 September 2018 following a decrease in total loans in the banking sector, mainly attributed to €6 bn non-performing loans of Cyprus Cooperative Bank (CyCB) which remained to SEDIPES as a result of the agreement between CyCB and Hellenic Bank. The market share on loans was affected as at 30 June 2018 following a decrease in total loans in the banking sector of €2.1 bn, due to loan reclassifications, revaluations, exchange rate or other adjustments (CBC) Net Proceeds Proceeds after selling charges and other leakages Net fee and commission income over total income Fee and commission income less fee and commission expense divided by total income (as defined) Net interest margin (NIM) Net interest margin is calculated as the net interest income (annualised) divided by the quarterly average interest earning assets. Average interest earning assets exclude interest earning assets of any discontinued operations at each quarter end, if applicable. Interest earning assets include: cash and balances with central banks, plus loans and advances to banks, plus net loans and advances to customers (including loans and advances to customers classified as non-current assets held for sale), plus investments (excluding equities and mutual funds) Net loans and advances to customers Comprise gross loans (as defined) net of allowance for expected loan credit losses (as defined, but excluding credit losses on off-balance sheet exposures) Net loan to deposit ratio Net loan to deposit ratio is calculated as gross loans (as defined) net of allowance for expected loan credit losses (as defined) divided by customer deposits New lending New lending includes the average YTD change (if positive) for overdraft facilities. Non-interest income Non-interest income comprises Net fee and commission income, Net foreign exchange gains and net gains on financial instrument transactions and disposal/dissolution of subsidiaries and associates (excluding net gains on loans and advances to customers at FVPL), Insurance income net of claims and commissions, Net gains/(losses) from revaluation and disposal of investment properties and on disposal of stock of properties, and Other income

Group Financial Results for the year ended 31 December 2019

Glossary & Definitions

75

Non-recurring items Non-recurring items as presented in the ‘Unaudited Consolidated Income Statement – Underlying basis’ relate to: (i) advisory and other restructuring costs - organic, (ii) restructuring costs – Voluntary Staff Exit Plan (VEP), (iii) Provisions/net (loss)/profit relating to NPE sales, (iv) (Loss)/profit on remeasurement of investment in associate upon classification as held for sale (CNP) net of share of profit from associates, (v) Reversal of impairment of DTA and impairment of other tax receivables, and (vi) Profit from discontinued operations (UK) NPEs According to the EBA standards and ECB’s Guidance to Banks on Non-Performing Loans (published in March 2017), NPEs are defined as those exposures that satisfy one of the following conditions: (i) the borrower is assessed as unlikely to pay its credit obligations in full without the realisation of the collateral, regardless of the existence of any past due amount or of the number of days past due, (ii) defaulted or impaired exposures as per the approach provided in the Capital Requirement Regulation (CRR), which would also trigger a default under specific credit adjustment, distress restructuring and obligor bankruptcy, (iii) material exposures as set by the CBC , which are more than 90 days past due, (iv) performing forborne exposures under probation for which additional forbearance measures are extended, and (v) performing forborne exposures under probation that present more than 30 days past due within the probation period. When a specific part of the exposures of a customer that fulfils the NPE criteria set out above is greater than 20% of the gross carrying amount of all on balance sheet exposures of that customer, then the total customer exposure is classified as non-performing; otherwise only the specific part of the exposure is classified as non-performing. The NPEs are reported before the deduction of allowance for expected loan credit losses (as defined) The exit criteria of NPE forborne are the following: 1. The extension of forbearance measures does not lead to the recognition of impairment or default 2. One year has passed since the forbearance measures were extended 3. There is not, following the forbearance measures, any past due amount or concerns regarding the full repayment of the exposure according to the post forbearance conditions NPE coverage ratio (previously ‘NPE Provisioning coverage ratio’) The NPE coverage ratio is calculated as the allowance for expected loan credit losses (as defined) over NPEs (as defined) NPE ratio NPEs ratio is calculated as the NPEs as per EBA (as defined) divided by gross loans (as defined) NPEs sales NPE sales refer to NPE sale transactions completed in the year, as well as sale transactions being contemplated as at year-end, irrespective of whether they met the held for sale classification criteria as at 31 December 2019 NSFR The NSFR is calculated as the amount of “available stable funding” (ASF) relative to the amount of “required stable funding” (RSF), on the basis of Basel III standards. Its calculation is a SREP

• requirement. The EBA is working on finalising the NSFR and enforcing it as a regulatory ratio under CRR II

OMV Open Market Value Operating profit Comprises profit before Total loan credit losses, impairments and provisions (as defined), tax, (profit)/loss attributable to non-controlling interests and non-recurring items (as defined) p.p. percentage points Performing Relates to all business lines excluding Restructuring and Recoveries Division (“RRD”), REMU and non-core overseas exposures Phased-in Capital Conservation Buffer (CCB) In accordance with the legislation in Cyprus which has been set for all credit institutions, the applicable rate of the CCB is 1.25% for 2017, 1.875% for 2018 and 2.5% for 2019 (fully phased-in)

Group Financial Results for the year ended 31 December 2019

Glossary & Definitions

76

Pro forma for Helix Includes the impact from the completion of Project Helix, as well as the impact from the agreement for the sale of a portfolio of retail unsecured NPEs, with gross book value €33 mn as at 31 March 2019, known as Project Velocity Loan credit losses for impairment of customer loans Credit losses for impairment of customer loans and gains/(losses) on derecognition of loans and changes in expected cash flows on acquired loans Profit/(loss) after tax and before non- recurring items (attributable to the

• wners of the Company)

Excludes non-recurring items (as defined) Profit/(loss) after tax – organic (attributable to the owners of the Company) Profit/(loss) after tax and before ‘non-recurring items’ as defined (attributable to the owners of the Company), except for the ‘advisory and other restructuring costs – organic’ 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 allowance for expected loan credit losses/Net Loans RRD Restructuring and Recoveries Division RWA Risk Weighted Assets RWA Intensity Risk Weighted Assets over Total Assets Special levy Relates to the special levy on deposits of credit institutions in Cyprus Stage 2 & Stage 3 Loans Include purchased or originated credit-impaired Tangible Collateral Restricted to Gross IFRS balance Total Capital ratio Total capital ratio is defined in accordance with the Capital Requirements Regulation (EU) No 575/2013, as amended by CRR II applicable as at the reporting date Total expenses Total expenses comprise staff costs, other operating expenses and the special levy and contribution to the Single Resolution Fund. It does not include ‘advisory and other restructuring costs-

• rganic’, or any restructuring costs relating to the Voluntary Staff Exit Plan, or any restructuring costs relating to NPE sales. ‘Advisory and other restructuring costs-organic’ amounted to €22 mn for

FY2019 (compared to €42 mn for FY2018) and to €8 mn for 4Q2019 (compared to €4 mn for 3Q2019). Restructuring costs relating to the Voluntary Staff Exit Plan amount to €81 mn for both 4Q2019 and FY2019. Restructuring costs relating to NPE sales amounted to €25 mn for FY2019 (compared to €18 mn for FY2018) and to €10 mn for 4Q2019 (compared to €6 mn for 3Q2019).

Group Financial Results for the year ended 31 December 2019

Glossary & Definitions

77

Total income Total income comprises net interest income and non-interest income (as defined) Total loan credit losses, impairments and provisions Total loan credit losses, impairments and provisions comprises loan credit losses (as defined), plus (provisions)/reversal of provisions for litigation, claims, regulatory and other matters plus (impairments)/reversal of impairments of other financial and non-financial assets T2 Tier 2 Capital Underlying basis This refers to the statutory basis after being adjusted for certain items as explained in the Basis of Presentation Write offs Loans together with the associated loan credit losses are written off when there is no realistic prospect of future recovery. Partial write-offs, including non-contractual write-offs, may occur when it is considered that there is no realistic prospect for the recovery of the contractual cash flows. In addition, write-offs may reflect restructuring activity with customers and are part of the terms of the agreement and subject to satisfactory performance yoy Year on year change

Group Financial Results for the year ended 31 December 2019

Disclaimer

78

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 or their negative variations, but their absence does not mean that a statement is not forward-looking. Examples of forward-looking statements include, but are not limited to, statements relating to the Group’s near term and longer term future capital requirements and ratios, intentions, beliefs or current expectations and projections about the Group’s future results of operations, financial condition, expected impairment charges, the level of the Group’s assets, liquidity, performance, prospects, anticipated growth, provisions, impairments, business strategies and opportunities. By their nature, forward-looking statements involve risk and uncertainty because they relate to events, and depend upon circumstances, that will or may occur in the future. Factors that could cause actual business, strategy and/or results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements made by the Group include, but are not limited to: general economic and political conditions in Cyprus and other European Union (EU) Member States, interest rate and foreign exchange fluctuations, legislative, fiscal and regulatory developments and information technology, litigation and other operational risks. Should any one or more of these or other factors materialise, or should any underlying assumptions prove to be incorrect, the actual results or events could differ materially from those currently being anticipated as reflected in such forward looking statements. The forward-looking statements made in this document are only applicable as from the date of publication of this document. Except as required by any applicable law or regulation, the Group expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward looking statement contained in this document to reflect any change in the Group’s expectations or any change in events, conditions or circumstances on which any statement is based.