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Group Financial Results

for the six months ended 30 June 2019

Bank of Cyprus Group

27 August 2019

The financial information included in this presentation is neither reviewed nor audited by the Group’s external auditors.

The Interim Condensed Consolidated Financial Statements for the six months ended 30 June 2019 have not been audited by the Group’s external auditors.

The Group’s external auditors have conducted a review of the Interim Condensed Consolidated Financial Statements in accordance with the International Standard on Review Engagements 2410

‘Review of Interim Financial Information performed by the Independent Auditor of the Entity’ (UK & Ireland).

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 six months ended 30 June 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 of 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 2018, and updated in the Interim 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.

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1H2019 - Highlights

2

• Total Income of €177 mn, Operating profit of €72 mn, Underlying profit after tax excluding Helix & CNP, of €21 mn

• Cost of risk at 1.23% reflecting continued de-risking and IFRS9 model volatility

• Agreement for the sale of investment in CNP2; net loss of €23 mn (+30 bps of capital on completion)

• Profit after tax of €2 mn for 2Q2019 and €97 mn for 1H2019

• Deposits at €16.4 bn at quarter end, broadly flat qoq

• Significant liquidity surplus of €3.8 bn, reflecting €1.2 bn increase on Project Helix completion

• Loan to deposit ratio of 67%

• Total Capital ratio of 18.1%1,2 pro forma for the disposal of investment in CNP (17.8%1 as reported)

• CET1 ratio of 15.2%1,2 pro forma for the disposal of investment in CNP (14.9%1 as reported)

• Project Helix completed, adding 140 bps to capital in 2Q2019

2Q2019

Performance

Reflects Continued

De-risking

Strong Liquidity

Position

Good Capital

Position

• Completion of sale of €2.7 bn NPEs (Project Helix)

• NPEs of €4.3 bn (€2.2 bn net); 71% reduction since 2014; NPE ratio reduced to 33%, coverage increased to 50%

• Seventeen consecutive quarters of organic NPE reduction; €300 mn NPE reduction in 2Q2019; €457 mn in 1H2019

• REMU sales (organic) of €110 mn in 1H2019; Completion of sale of Cyreit in 2Q2019

• Management continues to actively explore strategies to further accelerate de-risking including further portfolio sales

Continuing

Progress on

Balance Sheet

Repair

(1) Allowing for IFRS 9 transitional arrangements

(2) In June 2019 the Bank signed a binding agreement to sell its entire shareholding of 49.9% in its associate CNP Insurance Holdings Limited (“CNP”). Calculations on a pro forma basis assume

completion of the sale that is expected to occur in the second half of 2019. https://www.bankofcyprus.com/globalassets/investor-relations/press-releases/eng/20190604-

announcement_projectzenon_spaexecution_eng_final.pdf

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13.4%

14.9% 15.2%

18.1%

0.5% (0.3%) 1.4%

(0.1%) 0.3%

1.6%

1.3%

CET131 Mar 2019

Operatingprofitability

Loan creditlosses

and otherimpairments

Helix RWAs(organic)

CET 130 Jun 2019

Disposal of CNP(RWA impact)

CET 130 Jun 2019

pro forma forCNP

AT1 T2 Total Capitalratio

30 Jun 2019pro forma for

CNP

4

4

1

12

.2%

14

.2%

11

.9%

14

.9%

13

.4%

16

.2%

14

.9%

17

.8%

15

.2%

18

.1%

CET 1 ratio Total capital ratio

Dec 2017 Dec 2018 Mar 2019 Jun 2019 Jun 2019pro forma for CNP

4

Continued reduction in RWA intensity

85% 85% 85%

73% 70% 71%

64% 64% 63%

Dec 14 Dec 15 Dec 16 Dec 17 Dec 18 Mar 19 Mar 19pro

forma forHelix

Jun 19 Jun 19pro

forma forCNP

Capital strengthened with Helix completion

3

(1) Allowing for IFRS 9 transitional arrangements.

(2) The CET1 ratio for 30 June 2019, including the full impact of IFRS 9 amounts to 13.3% and 13.5% pro forma for the disposal of the investment in CNP

(3) Loan credit losses and other impairments include the net change of the prudential charges relating to specific credits and other items

(4) In June 2019 the Bank signed a binding agreement to sell its entire shareholding of 49.9% in its associate CNP Insurance Holdings Limited (“CNP”). Calculations on a pro forma basis assume completion

of the sale that is expected to occur in the second half of 2019. The announcement is available on https://www.bankofcyprus.com/globalassets/investor-relations/press-releases/eng/20190604-

nnouncement_projectzenon_spaexecution_eng_final.pdf

(5) 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)

14.0%

Evolution of Capital Ratios

10.5%

CET1 ratio at 15.2%1,4; Total capital ratio at 18.1%1,4

min 2019 OCR(SREP)5 requirement

1,2

3

1,2 1

4

1,2 1,2

4

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9.9 8.5 6.5 4.6 3.6 3.4 2.4 2.2

15.0 14.0

11.0 8.8

7.5 7.3 4.6 4.3

63% 62% 55%

47% 47% 46%

35% 33%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Dec2014

Dec2015

Dec2016

Dec2017

Dec2018

Mar2019

Mar 2019pro forma for

Helix

Jun2019

Net NPEs Gross NPE ratio LLR

€10.7 bn NPE reduction since peak

8.47 8.47 8.51 7.53 7.23 7.23 7.17 6.91 6.77

4.19 4.19

0.77 (0.72) (0.98)

(0.31) 0.19 (0.25) (0.26) (0.14)

(2.58)

Dec2017

Inflows Curing ofrestructured

loans andcollections

Write-offs Foreclosures Dec2018

Inflows Curing ofrestructured

loans andcollections

Write-offs Foreclosures Helix Jun2019

Cyprus operations (€ bn)

• €10.7 bn NPE reduction

since 2014, of which

c.€8.0 bn organic

• Completion of sale of

€2.7 bn NPEs (Helix)

improved NPE ratio by 11

p.p.

• NPE ratio reduced to 33%

from 63% in Dec 2014

78% reduction of Net NPEs since peak (Dec 14)

Helix completed and organic NPE reduction continues in line with guidance of c. €200 mn reduction per quarter

1

-€1.24 bn -€3.04 bn

Group (€ bn)

2,3 2,3

(1) Include a net impact of c.€11 mn of IFRS 9 grossing up and set offs

(2) Includes consensual (debt for asset swaps, DFAs) and non consensual foreclosures and debt for equity swaps

(3) Value of on boarded assets is set at a conservative 25%-30% discount from open market valuations, by two independent sources

4

Sale of BOC UK reduced

performing loans by €1.8 bn;

increased NPE ratio by 5 p.p.

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0.06 0.09

0.04 0.06 0.04 0.01

0.04 0.02

0.05 0.05

0.06

0.03

0.04

0.22

0.02

0.08

0.03

0.02

0.14

0.33

0.11

0.19

0.13

0.06

1Q2018 2Q2018 3Q2018 4Q2018 1Q2019 2Q2019

Redefaults New inflows Unlikely to pay

(0.17) (0.34)

(0.09) (0.05) (0.10) (0.11)

(0.09)

(0.07)

(0.05) (0.10) (0.06) (0.08)

(0.39) (0.29)

(0.13) (0.16) (0.12) (0.14)

0.04

(0.01)

(0.05) (0.06) (0.04)

(0.61) (0.71)

(0.32) (0.37)

(0.28)

(0.37)

1Q2018 2Q2018 3Q2018 4Q2018 1Q2019 2Q2019

Curing of restructured loans DFAs & DFEs Write offs and non contractual write offs Other (Interest / Collections / Change in balances)

5

Good NPE outflows & low inflows in 2Q2019, leading to €300 mn net organic reduction

Cyprus operations (€ bn)

Quarterly NPE outflows of €374 mn

Quarterly NPE inflows of €63 mn

Impacted by a reclassification of

a Corporate Performing customer

Group of €150 mn

Cyprus operations (€ bn)

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11.36

7.18 6.26

3.74 3.65

0.64

0.27

0.34

0.34 0.22

1.97

1.35

0.87

0.53 0.44

13.97

8.80

7.47

4.61 4.31

Dec 15 Dec 17 Dec 18 Mar 19pro forma for Helix

Jun 19

Non Core NPEs

Core NPEs

0.12 0.03 0.07

0.14

0.20 0.10

0.26 0.23

0.17

up to 31 Dec2019

2020 2021+

No impairments no arrears

No arrears but Impaired

Exit dates for non core NPEs

€0.66 bn NPEs with no arrears1

€ bn

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

Core NPE risk at €3.65 bn, 55% covered

Core NPEs

% of Gross Loans

50%

36%

Coverage

38%

54% 5%

28%

Core NPEs

39%

57%

Forborne, NPEs, no arrears but impaired

NPEs no impairment, no arrears1 € bn

6

55%

18%

Core NPEs

Core NPEs

28%

55%

Non Core NPEs (€ bn) Dec 18 Mar 19 Helix Mar 19

Pro forma for Helix Jun 19

Jun 19

Coverage

Corporate 0.68 0.58 (0.16) 0.42 0.28

SMEs 0.21 0.18 (0.05) 0.13 0.11

Retail 0.32 0.32 (0.00) 0.32 0.27

Total Non Core NPEs 1.21 1.08 (0.21) 0.87 0.66 18%

Core NPEs (€ bn)

Corporate 2.50 2.48 (1.88) 0.60 0.60

SMEs 1.60 1.47 (0.52) 0.95 0.84

Retail 2.16 2.24 (0.05) 2.19 2.21

Total Core NPEs 6.26 6.19 (2.45) 3.74 3.65 55%

Contractual balance of Core NPEs 5.48 70%

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Clear strategy for further NPE reduction

7

Estia

0.60

0.66

30-Jun-19

0.65

1.56

0.84

Non Core

Retail-

Non Estia eligible

SME

Corporate

4.31

1

Group NPEs (€ bn)

Net organic reduction of €300 mn on in 2Q2019 in line with target of c.€200 mn reduction per quarter

(1) ESTIA-eligible portfolio refers to the potentially eligible portfolio based on the Bank’s available data. Further, eligibility w ill be assessed on an individual level and borrowers will be eligible if they apply and

meet the specific criteria of the Scheme as announced by the Government. Please refer to slide 27 for a summary of the Scheme.

Non Core NPEs

• Close monitoring of redefaults & quality of restructurings

ESTIA1 (see slides 8 & 27)

• Resolution of portfolio as per the Government-led scheme

• Clear definition of socially protected

Core NPEs-Retail, non-Estia eligible

• Additional focus of management on Retail, non-Estia

eligible, exposures

• Incremental servicing engine powered by external party

(Pepper)

• Focus on realising collateral via consensual and non

consensual foreclosures for non-Estia eligible clients

• Management continues to actively explore strategies to

further accelerate de-risking including further portfolio

sales

Core NPEs - SMEs & Corporate

• Focus on realising collateral via consensual & non

consensual foreclosures

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

discount to open market value (OMV)

• Management continues to actively explore strategies to

further accelerate de-risking including further portfolio

sales

Foreclosures

(see slide 9)

Focus on

strategic

defaulters

Core NPEs

excluding

ESTIA1:

€2.81 bn

49

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ESTIA- Government scheme launching in September 2019

Clear definition of socially protected borrowers, acting as enabler against non- ESTIA eligible borrowers

Expected to facilitate decrease of stickier & socially sensitive component of NPEs (residential collateral)

Timeline Jul

19

Sep

19

Oct

19

Nov

19

Dec

19

Jan

20

Feb

20

Mar

20

Apr

20

Signing of MOU1

Applications

Restructuring solutions

offered to Applicants

Approval of applications by

the Government

Payment of 1st instalment

of the state subsidy

Timeline

Restructured loans

will exit NPE

definition in

accordance with the

NPE exit criteria2

BOC

current

actions

ESTIA perimeter updated3 following ongoing detailed assessment (based on OMV and NPE status)

• c. 4K customers3, c.10K loan facilities3 with Gross Book Value (GBV) c.€0.84 bn

Establishment of a dedicated team and contact strategies developed

• Meetings with interested customers on going, aimed at building applicant pipeline

96% of borrowers contacted and currently assessed as potentially eligible2, have expressed interest to participate

(as at 30 June 2019)

Pipeline as at 31 July 2019: 763 applications (€211 mn) at a well progressed stage for submission in 3Q2019

(1) The Memorandum of Understanding between the Ministry of Finance and the Banks participating in the Scheme was signed on 27 July 2019

(2) Please refer to slide 52 for the NPE forborne exit criteria

(3) ESTIA-eligible portfolio refers to the potentially eligible portfolio based on the Bank’s available data. Further, eligibility w ill be assessed on an individual level and borrowers will be eligible if they apply and

meet the specific criteria of the Scheme as announced by the Government. Please refer to slide 27 for a summary of the Scheme. 8

49

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463 212 129

Foreclosures becoming an important tool in NPEs resolution

9

352

1,265 1,394

330 527

2016 2017 2018 1Q2019 2Q2019

Foreclosure commenced3

75 289

613

82 163

2016 2017 2018 1Q2019 2Q2019

Auctions held

804 properties resolved4 excluding Helix assets

Consensual

foreclosures

Sold at the

auction Repossessed 2

• Auctions held for 245 assets in 1H2019

• c.1/5 properties auctioned are sold at auction

• 8 months time to auction (refer to slide 26)

• Reduce time of re-possession:

• Wait period reduced from 12 to 6 months from date of first

unsuccessful auction

• c.300 properties in the pipeline for repossession2

(1) Principal Private Residence

(2) Properties that have been auctioned unsuccessfully at least once

(3) The foreclosure process is considered to have commenced upon serving notice to the mortgagor

(4) Cummulative up to 30 June 2019

no. of properties

no. of properties

Including Helix assets Excluding Helix assets

Including Helix assets Excluding Helix assets

Auctions set for

c.750 properties

for remainder of

2019

Managed by REMU

804

no. of properties

Foreclosure Law:

• The July 2018 foreclosure law amendments have expedited

the process and limited options to frustrate execution

• Recently, the Parliament voted through certain changes to the

2018 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

PPR1, and

• Extend the foreclosure timetable by extending various

notice periods

• These amendments have not yet passed into law, as they have

been referred to the Supreme Court by the President

• 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

49

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110

160 179

330

238 270

2016 2017 2018 1H2019

Sales Cyreit

REMU: €1.02 bn sales of 1,284 properties since set-up in Jan 2016

10

Sales contract prices4 (€ mn)

99 331 575 2793

# properties

Total Sales of €1.02 bn

• Encouraging trends on real estate market

Residential Property prices up 1.5% yoy2

Sale contracts (excluding DFAs) up 24% yoy1

• Disposal of Cyreit completed in 2Q2019 (21 properties)

• 139 properties sold in 2Q2019 (excl Cyreit)

• SPAs signed for additional 69 properties

• c. 53% of properties sold in 1H2019 (in value) relate to land

(1) Based on data from Land of Registry –Sales contracts

(2) Based on Cyprus Central Bank report- Residential Prices Index, published on 7 Aug 2019 https://www.centralbank.cy/images/media/pdf/RPPI-2018Q4-GR0002.pdf

(3) Number of properties sold include 21 properties from the disposal of Cyreit

(4) Amounts as per Sales Purchase Agreements (SPAs)

(5) Proceeds after selling charges and other leakages

(6) Proceeds before selling charges and other leakages

Sales contract prices4 (€ mn)

393

110

34

89

160

SPA in

preparation

Cyreit Offers accepted

1H2019

SPA signed Sold

Total Sales

of €270 mn

€123 mn Pipeline

Asset disposal strategy tackles both value and volume of assets €270 mn sales at a profit of €16 mn in 1H2019

€123 mn in the pipeline

Organic sales achieved comfortably above Book Value

Sales contract prices4 (€ mn)

110

58

11

20

21

Land Total Sales

1H2019

Hotels Residential Commercial

95% 100% 97% 89% 95%

117% 131% 112% 120% 115%

Net Proceeds / BV Gross Proceeds / OMV 5 6

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66%

66%

64%

61%

60%

58%

58%

54%

53%

53%

51%

50%

50%

48%

46%

43%

42%

41%

36%

35%

34%

33%

33%

30%

30%

29%

27%

27%

26%

26%

26%

HU RO SK PL SI CZ HR BG IT AT PT FR BOC GR CY ES BE DE LV LU SE DK LT GB NO IS FI MT IE NL EE

NPE Coverage at 50%

11

41

%

48

%

52

%

53

%

48

%

50

%

68

%

67

%

70

%

70

%

70

%

69

%

10

9%

11

5%

12

2%

12

3%

11

8%

11

9%

Dec 16 Dec 17 Dec 18 Mar 19 Mar 19pro forma for

Helix

Jun 19

Loan loss reserves Tangible Collateral

(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

(2) Restricted to Gross IFRS balance

(3) Based on EBA Risk Dashboard as at 31 March 2019

Quarterly CoR 1 at 1.23% NPE total coverage at 119% when collateral included

NPE coverage remains above EU average

2

30 Jun 2019

EU average3: 44%

1.08%

0.80%

0.47%

0.77%

1.18% 0.93%

1.44%

1.23%

1Q2018 2Q2018 3Q2018 4Q2018 1Q2019 2Q2019

Quarterly Cost of Risk - Group

Quarterly Cost of Risk - Group (excluding Helix)

49

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104 102 85 85

85 74

71 92

189 176

156

177

4Q2018 1Q2019 1Q2019 2Q2019

Net Interest Income (NII) Non Interest Income

12

Excluding Helix, Total Income of €177 mn for 2Q2019

Including Helix Excluding Helix1

• Total income of €177 mn in 2Q2019 compared to €156 mn for 1Q2019 on the same basis, up by 14% qoq

• Net interest income remained stable qoq, helped by the further decrease of the cost of deposits

• Non interest income increased to €92 mn in 2Q2019 compared to €71 mn for 1Q2019, mainly due to higher insurance income, one-off

revaluation gains on financial instruments and increased gains from the disposal of REMU properties

• Non-interest income of €74 mn for 1Q2019 reduced to €71 mn excluding Helix, with reduction relating to Helix transitional servicing fee until

full system migration

(1) The interest income, non-interest income, staff costs, other operating expenses and loan credit losses related to Project Helix are disclosed under ‘Profit/(loss) relating to NPE

sale (Helix)’ in the underlying basis

€ mn

49

133

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234

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114

37.5% 37.1% 38.6%

45.4% 46.7% 47.1%

41.3%

Dec 16 Dec 17 Jun 18 Dec 18 Mar 19 May 19beforeHelix

Jun 19afterHelix

47

52

83

83

105

192

265

284

Manufacturing

Construction

Hotels and restaurants

Professional and otherservices

Other Sectors

Real estate

Trade

Private individuals

32 37 44 63 35 38 39 66 47 61 71 90 64

81 64 112 81 99

52 38 49 85

48 47

52 79 47 198 310

169 351

322 261

208 337

355

343

456

352

563

486

410 411

563 548

2Q2017 3Q2017 4Q2017 1Q2018 2Q2018 3Q2018 4Q2018 1Q2019 2Q2019

Retail Other Retail Housing SME Corporate

New lending1 of €548 mn in 2Q2019

13

New lending Cyprus (€ mn) – 1H2019

New lending to core sectors driving GDP growth 97% of new exposures2 in Cyprus since 2016 are performing

New Lending (Cyprus) (€ mn)

(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

(3) The Bank’s Base rates are linked to the average interest rate paid on euro-denominated household deposits in the Republic of Cyprus (outstanding amounts) by euro area residents with agreed maturities

of up to 2 years as published on the website of the Central Bank of Cyprus on a monthly basis

Loan Market shares

403 404 399 378 355 335

2Q2018w/o UK

3Q2018 4Q2018 4Q2018 1Q2019 2Q2019

Performing book effective yields

bps

Performing book yields remain

under pressure, as:

• Lending rates negatively affected

by the continued system-wide

reduction of deposit rates3 due to

the low interest rate environment

• Competition pressure continues

due to the significant surplus

liquidity in the market

Including unrecognised

interest on previously credit

impaired loans

Excluding

49

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• Drivers of interest income of Performing book: Competition pressure on lending rates due to sustained low interest rate environment and significant excess

liquidity

• Drivers of interest income of Legacy book: Curing of restructured loans, DFAs, cash collections of interest on delinquent exposures

84 77 74

25 27 27

109 104 101

4Q2018 1Q2019 2Q2019

Performing Legacy

1

9.96 9.98 10.15 8.65 8.84 8.84 8.87

7.19 5.64

4.40

3.39 3.19 2.09 2.06

17.15

15.62

14.55

12.04 12.03

10.93 10.93

Dec-2015 Dec-2016 Dec-2017 Dec-2018 Mar-2019 Mar-2019pro forma for

Helix

Jun-19

Performing Legacy

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

14

€ mn (pre FTP)

Interest Income on Loans (excluding Helix): Performing vs Legacy Net Loans: Performing vs Legacy

€ bn

Sale of BOC UK -

€1.8 bn net loans

58%

81%

42%

19%

(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

49

133

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0

127

127

127

0

153

204

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191

191

203

224

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234

234

234

0

97

114 1H2019 1H2019 1H2019

Pro

fita

bilit

y

Interest Income on loans (€ mn)

(pre FTP) 1511 54 205

Loan credit losses (€ mn) (1) (86) (87)

Interest Income net of loan

credit losses (€ mn) 150 (32) 118

Cost of Risk 0.01% 4.31% 1.34%

Effective Yield 3.45%1 5.15% 3.78%

Risk adjusted Yield 3.44%1 (3.03%) 2.18%

Cap

ital

&

bala

nce

Sh

eet

Average Net Loans

(€ mn) 8,786 2,130 10,916

RWA Intensity2 56% 104% 64%

Performing Legacy Group

Risk adjusted yield will rise as Legacy book reduces

Corporate

IB, W&M

SME and Retail Banking

Insurance and Other incl H/O

RRD

Overseas non core

REMU

15

• 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)

• As Legacy book reduces:

Group risk adjusted yield

expected to rise

Group Risk intensity

expected to fall supporting

CET1 ratio build

(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) Risk Weighted Assets over Total Assets

Excluding Helix

49

133

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0

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114

Deposits at €16.4 bn at quarter end, broadly flat qoq

16

(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, expected to occur in 2Q2021, 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

12.11 12.48 13.04 13.14 12.76 12.92

4.00 4.00 3.81 3.70

3.54 3.46

16.11 16.48 16.85 16.84 16.30 16.38

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

Cyprus non-IBU Cyprus IBU

67%

21%

3%

4% 5%

Cyprus

Other EU

Other European Countriesexcluding RussiaRussia

Other Countries

Cyprus deposits by

passport origin2

Cyprus deposits (€ bn)

Liquidity

ratio

Minimum

required

30 Jun

2019 Surplus

LCR

(Group) 100% 253% €3,844 mn

NSFR3 100% 128% €3,697 mn

1

31.1% 32.8%

34.1% 35.1%

36.3% 36.0% 35.2% 34.7%

Dec 16 Dec 17 Mar 18 Jun 18 Sep 18 Dec 18 Mar 19 June 19

Strong deposit market share of 34.7% Cost of deposits reduced by 52 bps since Jan’18

bps

83 82 80 76 69

59 49

41 32

24

2Q18 2Q17 1Q17 3Q17 1Q18 4Q17 3Q18 4Q18 1Q19 2Q19

-52 bps

378 357 355 335

560 540 506 530

-1 22 19 17

-59 -50 -50 -43

4Q2018 1Q2019 1Q2019 2Q2019

Performing Legacy

Liquids Cost of funding

221

47.7% 47.8% 48.0% 48.9%

22.4% 20.8% 11.9% 11.4%

29.9% 31.4% 40.1% 39.7%

1H2018w/o UK

FY2018w/o UK

1Q2019 2Q2019

Performing Legacy Liquids

€18.2 bn €18.1 bn €18.2 bn

Drivers of NIM

0.17%

5.30%

3.35%

Effective yield

Liquidity build up

• Liquid assets1 increased to c. €7.4 bn (+25% qoq) mainly due to the completion

of Project Helix (cash consideration c.€1.2 bn)

• 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

Cost of funding

• Improved to 43 bps, positively affected by the 8 bps reduction in cost of

deposits in 2Q2019

• Overall cost of deposits reduced by 52 bps since Jan 18

8.53 8.65 8.84 8.84 8.87

4.43 3.39 3.19 2.08 2.06

5.06 6.44 5.91 7.02 7.37

3.49 3.60 3.76 3.76 3.59

21.51 22.08 21.70 21.70 21.89

Dec 17w/o UK

Dec 18 Mar-19 Mar-19 Jun 19

Performing Legacy Liquids Non int-producing NIM

AIEA

(bps)

17

Total Assets (€ bn) AIEA mix (% Total) Effective yield on assets & cost of funding

1 1

2 3

(1) Cash, placements with banks, balances with central banks and bonds

(2) 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)

(3) 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)

(4) 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

189 €18.1bn 188 227

Including Helix Excluding Helix

4

Pro forma for

Helix Excluding Helix

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41 43 43 40 37 38

13 13 15 12 12 18 2

-6

3 4 4

12 18 16 24

18 18

24 74 66

85 74 71

92

2Q2018 3Q2018 4Q2018 1Q2019 1Q2019 2Q2019

Net FX gains/(losses) & Net gains/(losses) on other financial instruments, and other income

Gains/(losses) from revaluation and disposal of investment properties and on disposal of stock of properties

Insurance income net of insurance claims

Net fee and commission income

23%

Recurring income

25% 23% 22% 23%

56

22%

% Net fee and commission

income % Total income

18

Non interest income of €92 mn in 2Q2019

Analysis of Non Interest Income (€ mn) – Quarterly

54 56 58 52

• Recurring income of €56 mn for 2Q2019, compared to €49 mn for 1Q2019, up 14% qoq mainly due to higher insurance income attributable to increased

income, positive investment returns and the reduction of the discount rate (c. €2.5 mn), following an improvement in the yield of assets, other revaluation

gains and lower insurance claims during the quarter

• Net fee and commission income accounts for 22% of Total Income, compared to 23% the previous quarter

• Net gains2 increased to €12 mn for 2Q2019, compared to €4 mn for 1Q2019, mainly due to increased REMU profit from the disposal of high value

properties; REMU profit remains volatile

• Net gains on financial instruments3 of €24 mn for 2Q2019, compared to €18 mn in 1Q2019, positively affected by one-off revaluation gains on financial

instruments

• Net fee and commission income of €40 mn for 1Q2019 reduced to €37 mn, as commission income of €3 mn relating to Helix transitional servicing fee (that

will be in place until full system migration) are included under “ Profit/(loss) relating to NPE sale (Helix)

(1) The interest income, non-interest income, staff costs, other operating expenses and loan credit losses related to Project Helix are disclosed under ‘Profit/(loss) relating to NPE sale (Helix)’ in the

underlying basis

(2) Gains/(losses) from revaluation and disposal of investment properties and on disposal of stock of properties

(3) Net FX gains/(losses) & Net gains/(losses) on other financial instruments, and other income

49

excluding

Helix1

1

49

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0

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234

234

234

0

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114

Total Expenses

19

7 5 6 7 6 6

1Q2018 2Q2018 3Q2018 4Q2018 1Q2019 2Q2019

Special Levy SRF contibution

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

Total operating expenses (€ mn)3

Special Levy and SRF contribution (€ mn)

• C/I ratio1 at 59% for 1H2019 excluding Helix, compared to

62% for 1Q2019 on the same basis, principally reflecting the

increased non-interest income in 2Q2019

• Staff costs for 2Q2019 amounted to €56 mn, flat qoq (both

excluding Helix)

50 52 52 54 56 56

4 37 43 34 42 41 43

87 95 86 100 97 99

1Q2018 2Q2018 3Q2018 4Q2018 1Q2019 2Q2019

Staff costs Staff costs unrelated to 4Q2018 Other operating expenses

2 2 2

(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 ‘Profit/(loss) relating to NPE sale (Helix)’

in the underlying basis

(4) The Group employed 4,155 persons as at 30 June 2019, including 108 persons relating to the Helix transaction, whilst full migration and transfer to the buyer is expected to conclude by

the end of the year. The staff costs related to these persons are included under ‘Profit/(loss) relating to NPE sale (Helix)’ in the underlying basis.

Strategy going forward

• Digital Transformation Programme that started in

2017 beginning to clearly deliver an improved

customer experience; branch network is now half the

size it was in 2013

• Considerable work is going on to further rationalise,

further modernise and reduce costs

• Cost management, including containment of staff

costs, remains a key focus for this year and going

forward

56%

62% 59%

42% 47% 49% 50% 56%

1Q2018 1H2018 9M2018 FY2018 1Q2019 1H2019

C/I ratio excluding Helix C/I ratio (as reported)

Excluding Helix4

€ mn (comparables adjusted for Helix) 1H20191 1H20181,2,3 2Q20191 1Q20191 qoq% yoy%

Net Interest Income 170 166 85 85 1% 3%

Non interest income 163 179 92 71 29% -9%

Total income 333 345 177 156 14% -4%

Total expenses (208) (194) (105) (103) 1% 7%

Operating profit 125 151 72 53 39% -17%

Loan credit losses (87) (85) (40) (47) -14% 3%

Impairments of other financial and non-financial

instruments (10) (13) (9) (1) - -20%

Reversal of provisions for litigation, regulatory and

matters 3 6 3 (0) - -54%

Total loan credit losses, impairments and

provisions (94) (92) (46) (48) 2% 3%

Restructuring costs-Organic (12) (15) (5) (7) -29% -22%

Profit/ (loss) after tax –Organic 17 42 21 (4) - -61%

Profit from discontinued operations (BOC UK) - 4 - - - -

Profit/ (loss) relating to NPE sale (Helix) 0 (105) 4 (4) - -

Loss on remeasurement of investment in associate

classified as held for sale (CNP) net of share of profit

from associates (21) 5 (23) 2 - -

Reversal of impairment of DTA and impairment of

other tax receivables 101 - - 101 - -

Profit/ (loss) after tax-attributable to owners 97 (54) 2 95 -97% -

Net Interest margin (annualised) 1.88% 1.86% 1.89% 1.88% +1 bps +2 bps

Cost to income ratio 63% 56% 59% 66% -7 p.p. +7p.p.

Cost-to-Income ratio adjusted for the

special levy and SRF contribution 59% 53% 56% 62% -6 p.p. +6 p.p.

Cost of Risk (annualised) 1.34% 1.22% 1.23% 1.44% -21 bps +12 bps

EPS – Organic (€ cent) 3.7 9.4 4.8 (1.1) 5.9 -5.7

Income Statement

20

Key Highlights

(1) The interest income, non-interest income, staff costs, other operating expenses and loan credit losses related to Project Helix are disclosed under ‘Profit/(loss) relating to NPE sale (Helix)’ in the

underlying basis

(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) Represented for the disposal of the UK subsidiary

(4) Properties held by the Bank prior to REMU set-up in January 2016

• NII flat qoq at €85 mn qoq

• Non-Interest Income at €92 mn for

2Q2019, compared to €71 mn for

1Q2019 mainly due to higher insurance

income, one-off revaluation gains on

financial instruments and increased

gains from the disposal of REMU

properties (refer to slide 18)

• Total expenses for 2Q2019 at €105 mn

compared to €103 mn for 1Q2019 (refer

to slide 19 )

• Loan credit losses for 2Q2019 of €40

mn, reflecting further de-risking and

IFRS 9 model volatility

• Impairments of other financial and non-

financial instruments for 2Q2019 of €9

mn, mainly due to further de-risking of

the legacy4 REMU properties

• Profit after tax from organic

operations for 2Q2019 of €21 mn

• Net loss of €23 mn for 2Q2019,resulting

from agreement for sale of investment

in CNP

• Profit after tax of €2 mn for 2Q2019

• Profit after tax of €97 mn for 1H2019

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” on 30 July 2019

Fitch Ratings:

Long-term Issuer Default Rating: Affirmed at “B-" on 21 March 2019 (positive outlook)

Short-term Issuer Default Rating: Affirmed at “B" on 21 March 2019

Viability Rating: Affirmed at “b-” on 21 March 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

Visit our website at: www.bankofcyprus.com

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)

Investor Relations

Contacts

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

Key Information and Contact Details

21

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114

Appendix – Macroeconomic overview

22

49

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114

3.4 3.2

3.9 3.7

3.5

-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

11Q2 11Q4 12Q2 12Q4 13Q2 13Q4 14Q2 14Q4 15Q2 15Q4 16Q2 16Q4 17Q2 17Q4 18Q2 18Q4 19Q2

Real GDP Quarterly SA % change y-o-y Real GDP SA annualised % change y-o-y

400

358

407

7.6 7.4

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

20

09

Q3

20

10

Q1

20

10

Q3

20

11

Q1

20

11

Q3

20

12

Q1

20

12

Q3

20

13

Q1

20

13

Q3

20

14

Q1

20

14

Q3

20

15

Q1

20

15

Q3

20

16

Q1

20

16

Q3

20

17

Q1

20

17

Q3

20

18

Q1

20

18

Q3

20

19

Q1

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

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

23

Recovery of the Cypriot economy continues …

S&P credit ratings Spreads (%)

Cyprus upgraded to investment grade by S&P and Fitch Reduction in spreads as a result of reduction

in government bond yields

A+

Dec 1

2

Ap

r 13

Ju

l 1

3

Nov 1

3

Feb

14

Ju

n 1

4

Se

p 1

4

Ja

n 1

5

Ap

r 15

Au

g 1

5

Nov 1

5

Feb

16

Ju

n 1

6

Se

p 1

6

Ja

n 1

7

Ap

r 17

Au

g 1

7

Nov 1

7

Mar

18

Ju

n 1

8

Oct

18

Ja

n 1

9

Ap

r 19

Au

g 1

9

Cyprus Portugal ItalySpain Greece Ireland

A-

BBB

BBB-

B+

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

Apr

20

16

Ju

l 20

16

Sep

2016

De

c 2

016

Feb

20

17

May 2

01

7

Ju

l 20

17

Oct 20

17

De

c 2

017

Mar

20

18

May 2

01

8

Aug

2018

Oct 20

18

De

c 2

018

Mar

20

19

May 2

01

9

Aug

2019

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

1 1

1 1

2

GDP increased by 3.9% in 2018, and by 3.4% and 3.2%

respectively in 1Q2019 and 2Q2019

Unemployment rate dropped to 7.4% in 1Q2019 SA compared

with a yearly average unemployment rate of 8.4% for FY2018

4 4

49

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114

Economic activity has been broadly based with

main drivers tourism and construction

24

… driven by tourism, professional services and construction activity

33.0%

30.0%

29.0%

25.0%

24.0%

21.0%

19.0%

12.5%

12.5%

Corporate tax rate (2018)

Double taxation

avoidance

treaties with more

than 60 countries

38.9%

38.9%

22.2%

Upper secondary

Less than

Upper secondary

Tertiary

Level of education 2018, age 15-64

Cyprus has the highest number of

university graduates in the population

in the EU after the UK and Ireland

Tourism arrivals (mn) Tourism: % changes yoy

Support from key business enablers

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

2.4 2.5 2.4 2.4 2.7

3.2

3.7

3.9

1.6 1.6

Construction activity – strong recovery in 2017-18; building

permits spiked in Apr-May 2019 driven by luxury hotels

19.8

14.6

7.8

-0.9

11.9 11.7

2.7

-3.6 2016 2017 2018 2019 Jun YTD

(May forreceipts)

Total arrivals (% change) Total receipts (% change)

19.3 15.5

13.3 25.8

15.2

67.9

27.1 41.9

-21.9

12.7

117.8

-40.0

-20.0

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

% changes year-on-year

Production index in construction Building permits volume

0.7 1.3 1.4 0.9

1.3 1.4 1.1

0.3

0.5 0.7

0.1

0.7

-0.2 -0.7 -0.5 -0.4

0.7 0.6

0.6

0.6

0.4 0.4

0.5

0.5

4.8 4.5

3.9

3.4

2016 2017 2018 2019-Q1

Arts & Oher

Public, Edu. & Health

Prof. & Admin

Real Est.

Financial

Information

Trade, Tran. & Tour.

Construction

Agric. & Industry

GVA

49

133

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192

0

127

127

127

0

153

204

191

191

191

203

224

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234

234

234

0

97

114

Appendix – Additional asset quality slides

25

As from 1 January 2018 and following IFRS 9 implementation, the Bank’s disclosure in relation to the loan portfolio quality is based on Non Performing

Exposures (NPEs), in line with the EBA standards and ECB NPEs Guidance to the banks. Exposures that meet the NPE definition are considered to be

in default and hence credit-impaired and are classified in Stage 3 under IFRS 9 staging classification. Such loans are also considered to be in default for

credit risk management purposes.

49

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114

Foreclosure

Law

• The July 2018 foreclosure law amendments1 have expedited the process and limited options to frustrate execution

• Recently 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.

Sale of Loans

Law

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

Other

changes

Tax legislation

Incentives to customers agreeing consensual solutions continue including exception of capital gains tax and transfer fees in sale

of 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

Securitisation

Law

Easier for banks to securitise NPLs

Regulated by CBC

Service time of Notices

Servicing Time + 40 days

Auction

Property transfer &

Distribution of proceeds

1-50 days immediately after

auction

TIMEFRAME

Valuations

30-1151 days

TIME UP TO AUCTION: ~ 8 MONTHS2

Foreclosure

Decision

Service

Announcement

3-5 days + Servicing

Time + 30 days

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

(1) Amendments to the Foreclosure Legislation, the Sale of Loans Law, the Insolvency framework and the introduction of the Securi tisation 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. 26

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114

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

• 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

Scheme

summary

(1) Please refer to slide 52 for the NPE forborne exit criteria 27

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

Expected to facilitate decrease of stickier and socially sensitive component of NPEs with residential collateral

Clear definition of socially protected borrowers, acting as enabler against non- Estia eligible borrowers

49

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97

114

91

%

71

%

57

%

67

%

99

%

66

%

61

%

89

%

41

% 6

1%

69

%

65

%

94

%

66

%

67

%

75

% 94

%

71

%

63

%

77

%

67

% 82

%

68

%

71

%

61

%

55

% 7

5%

67

% 8

7%

87

%

81

%

84

%

94

%

82

%

84

%

85

%

0%

20%

40%

60%

80%

100%

1 2 3 4

1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 2Q2018 3Q2018 4Q2018 1Q2019

70% 68% 78%

Weighted Avg since Jan-17

0.27 0.16 0.13 0.11 0.10 0.15

0.40

0.29 0.13 0.16 0.12

0.14

0.12

0.07

0.05 0.10 0.06

0.08

0.79

0.52

0.31 0.37

0.28 0.37

1Q2018 2Q2018 3Q2018 4Q2018 1Q2019 2Q2019

Restructured loans Write offs & non contractual write offs DFAs

(1) Excluding write offs & non contractual write offs and DFAs and terminated accounts

(2) The performance of loans restructured during 2Q2019 is not presented in this graph as it is too early to assess

(3) Write offs in 1Q2018 include a net impact of (c.€11 mn) of IFRS 9 grossing up and set offs

Restructuring efforts continue; re-default levels stable

28

Corporate SMEs Retail Total Bank – Cyprus

Quarterly evolution of restructuring activity (€ bn) (Cy operations)

Cohort analysis of restructured 1,2 loans; 78% of restructured loans present no arrears

3

NO ARREARS

93%

49

133

156

255

192

0

127

127

127

0

153

204

191

191

191

203

224

230

234

234

234

0

97

114

Fair value of collateral and adequacy of loan credit losses

29

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 excluding

Helix 31.9 1.3 319

2Q2019 39.6 1.6 878

1,598.7 62.0 16,235

• Resolution of cases within loan credit losses continued in

2Q2019

• Back-testing of over 16k fully settled customers over last 18

quarters on average within c.10% surplus over net book

value

Back-testing of loan credit losses supports past loan credit

losses adequacy

NPE Coverage at 50%

Loans and advances to customers 30 Jun 2019

(€ mn)

Cash 434

Securities 361

Letters of credit / guarantee 189

Property 15,503

Other 1,645

Surplus collateral (8,482)

Net collateral 9,650

Fair value of collateral and credit enhancements

58 41 29 40 47 47 40

51% 52% 52% 52%

53%

48%

50%

42%

47%

52%

1Q2018 2Q2018 3Q2018 4Q2018 1Q2019 1Q2019pro formafor Helix

2Q2019

Quarterly Credit losses of customer loans (€ mn)

NPEs coverage (excluding Helix)

49

133

156

255

192

0

127

127

127

0

153

204

191

191

191

203

224

230

234

234

234

0

97

114

Terminated Retail 1.46

Retail 1.02

Terminated SMEs 0.57

SME 0.37

Terminated Corporate

0.12

Corporate 0.65

Jun 19

NPEs (Cy) €4.19 bn

2.48

2.50 2.50

2.55 2.55

2.47 2.47

2.79

(0.05)

0.03

(0.05)

0.08

(0.50)

0.23 (0.05)

Jun 19

Exits

Inflows

Mar 19 pro forma

Helix

Mar 19

Exits

Inflows

Dec 18

Exits

Inflows

IFRS 9 adjustments

Dec 17

0.94

0.94

1.08

1.08

1.08

1.64

1.64

1.75

1.75

1.75

2.17

2.00

2.00

(0.15) 0.01

(0.56)

(0.12)

0.01

(0.37) 0.13 0.17

(0.18)

Jun 19

Exits

Inflows

Mar 19 pro forma

Helix

Mar 19

Exits

Inflows

Dec 18

Exits

Inflows

IFRS 9 adjustments

Dec 17

€0.77 bn

€0.94 bn

€2.48 bn

NPE ratio

0.77

0.90 0.90

2.89 2.89

3.01 3.01

3.68

(0.15) 0.02

(1.99 )

(0.16) 0.04

(1.03 ) 0.41

(0.23) 0.18

Jun 19

Exits

Inflows

Mar 19 pro forma

Helix

Mar 2019

Exits

Inflows

Dec 18

Exits

Inflows

IFRS 9 adjustments

Dec 17

16%

NPE ratio 42%

Corporate

SME

Retail

NPE coverage 46%

57%

NPE coverage

Continuous progress across all segments (Cy operations)

NPE total

coverage 105%

NPE total

coverage 122%

Focus shifts to Retail and SME after intense Corporate attention

40%

(1) Represents increase of the gross carrying amount on transition in line with IFRS 9 requirements net of non-contractual write offs executed during 1Q2018.

(2) Represents movement of balances within business lines to accommodate the management of Helix portfolio 30

1

1

1

Jun 2019

NPE ratio 44%

NPE coverage 54%

NPE total

coverage 122%

Jun 2019

June 2019

Transfers within business lines during 4Q2018 2

49

133

156

255

192

0

127

127

127

0

153

204

191

191

191

203

224

230

234

234

234

0

97

114

5.00 3.99 3.19 3.07 1.02 0.88

2.99

2.02 1.77 1.65

1.09 0.95

1.77

1.57 1.49 1.50

1.50 1.45

1.27

1.22 1.00 1.05

1.00 1.03

11.03

8.80 7.45 7.27

4.61 4.31

Dec-16 Dec-17 Dec-18 Mar-19 Mar-19pro forma Helix

Jun-19

Retail Other Retail Housing SMEs Corporate

Gross loans & NPEs by Customer Type

9.47 9.01 7.06 7.07 4.96 5.00

4.35 3.51 2.98 2.88

2.30 2.15

4.22 4.17

4.07 4.07 4.07 4.07

2.09 2.06

1.79 1.86 1.82 1.85

20.13 18.75

15.90 15.88 13.15 13.07

Dec-16 Dec-17 Dec-18 Mar-19 Mar-19pro-forma for Helix

Jun-19

Retail other Retail Housing SMEs Corporate

31

Gross loans by customer type (€ bn)

Total

NPEs by customer type (€ bn)

Total

1

1

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

49

133

156

255

192

0

127

127

127

0

153

204

191

191

191

203

224

230

234

234

234

0

97

114

51

%

43

%

46

%

57

%

53

%

54

%

39

%

39

%

40

%

58

%

56

%

57

%

51

%

47

%

49

%

72

%

62

%

59

%

70

%

69

%

68

%

84

%

84

%

85

%

57

%

60

%

60

%

72

%

71

%

70

%

12

3%

10

5%

10

5%

12

7%

12

2%

12

2%

12

3%

12

3%

12

5%

11

5%

11

6%

11

7%

12

3%

11

8%

11

9%

Dec2018

Mar 2019pro

formafor Helix

Jun2019

Dec2018

Mar 2019pro

formafor Helix

Jun2019

Dec2018

Mar 2019pro

formafor Helix

Jun2019

Dec2018

Mar 2019pro

formafor Helix

Jun2019

Dec2018

Mar 2019pro

formafor Helix

Jun2019

Loan loss reserves Tangible Collateral

NPE coverage and Total coverage by segment (Cy)

32

Coverage and collateral maintained post Helix

1 Cyprus operations

(1) Restricted to Gross IFRS balance

Total Cyprus €4.2 bn Corporate €0.8 bn SME €0.9 bn Retail-Housing €1.5 bn Retail-Other €1.0 bn

49

133

156

255

192

0

127

127

127

0

153

204

191

191

191

203

224

230

234

234

234

0

97

114

Asset Quality- NPEs analysis

(€ mn) Jun-19 Mar-19 Dec-18 Sep-18 Jun-18

A. Gross Loans after Fair value on Initial recognition 12,782 15,437 15,438 15,721 17,798

Fair value on Initial recognition 290 445 462 480 514

B. Gross Loans 13,072 15,882 15,900 16,201 18,312

B1. Loans with no arrears 8,565 8,402 8,260 8,330 10,097

B2. Loans with arrears but not NPEs 195 207 221 249 301

1-30 DPD 150 138 166 184 230

31-90 DPD 45 69 55 65 71

B3. NPEs 4,312 7,273 7,419 7,622 7,914

With no arrears 949 1,356 1,482 1,615 1,785

Up to 30 DPD 89 108 136 117 120

31-90 DPD 125 183 231 179 256

91-180 DPD 149 240 178 236 246

181-365 DPD 225 316 393 347 268

Over 1 year DPD 2,775 5,070 4,999 5,128 5,239

NPE ratio (NPEs / Gross Loans) 33% 46% 47% 47% 43%

Allowance for expected loan credit losses (including fair value

adjustment on initial recognition1) 2,145 3,846 3,852 3,993 4,100

Gross loans coverage 16% 24% 24% 25% 22%

NPEs coverage 50% 53% 52% 52% 52%

33 (1) Comprise (i) loan credit losses for impairment of customer loans and advances, (ii) the 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

49

133

156

255

192

0

127

127

127

0

153

204

191

191

191

203

224

230

234

234

234

0

97

114

45

%

53

%

32

%

76

%

33

% 45

%

52

%

51

%

49

%

52

%

28

%

68

%

53

%

43

%

46

%

34

% 47

%

51

%

26

%

69

%

49

%

43

%

44

%

34

%

34

%

32

%

9%

38

%

27

% 39

%

33

%

17

%

Trade Manufacturing Hotels and Catering Construction Real estate Private individuals Professional andother services

Other sectors

31.12.17 31.12.18 31.03.19 30.06.19

Analysis of gross loans and NPE ratio by Economic Activity

34

2.0

4

0.6

6

1.3

9

2.3

4

3.2

0

6.7

7

1.3

1

1.0

4

1.8

5

0.6

4

1.2

7

1.9

5

1.6

1

6.4

7

1.2

0

0.9

1

1.8

3

0.6

6

1.3

5

1.9

0

1.5

9

6.4

1

1.2

5

0.9

1

1.4

6

0.4

5

1.0

8

0.9

0

1.2

6

6.1

3

1.0

7

0.7

2

Trade Manufacturing Hotels & Restaurant Construction Real Estate Private Individuals Professional andother services

Other sectors

31.12.17 31.12.18 31.03.19 30.06.19

10% 11% 47% 8% 6%

% of total

7% 8% 3%

Gross loans by economic activity (€ bn)

NPE ratio by economic activity

49

133

156

255

192

0

127

127

127

0

153

204

191

191

191

203

224

230

234

234

234

0

97

114

Rescheduled Loans for the Cyprus Operations

3.4 3.0 2.7 2.5 2.4 2.2 2.1 0.9

1.7 1.3 1.3 1.3 1.2 1.0 0.9

0.6

0.6 0.6

0.5 0.5 0.5 0.5 0.5

0.5

1.7

1.4 1.4 1.3 1.3

1.1 1.2

1.1

7.4

6.3 5.9 5.6 5.4

4.8 4.7

3.1

31.12.16 31.12.17 31.03.18 30.06.18 30.09.18 31.12.18 31.03.19 30.06.19

Retail housing Retail consumer SMEs Corporate

44

%

41

%

40

%

27

%

40

%

40

%

35

%

27

%

32

%

34

%

29

%

25

%

31

%

32

%

28

%

27

%

19

% 26

%

27

%

28

%

Corporate SMEs Retail housing Retail Consumer

31.12.16 31.12.17 31.12.18 31.03.19 30.06.19

35

Rescheduled Loans by customer type (€ bn)

Rescheduled loans1 % gross loans by customer type Rescheduled loans – Asset Quality

30 June 2019 € ‘000

Stage 1 285,953

Stage 2 531,221

Stage 3 1,804,397

POCI 218,999

FVPL 250,023

Total 3,090,593

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

49

133

156

255

192

0

127

127

127

0

153

204

191

191

191

203

224

230

234

234

234

0

97

114

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

36 (1) Includes purchased or originated credit-impaired

Gross Loans (€ bn) 30 Jun 2019 31 Mar 2019 Pro forma for

Helix

31 Mar 2019 qoq %

Stage 1 6.02 6.28 6.30 -4%

Stage 2 1 2.74 2.26 2.31 21%

Stage 3 1 4.31 4.61 7.27 -6%

Total 13.07 13.15 15.88 -1%

Allowance for

expected loan credit

losses (€ bn)

30 Jun 2019 31 Mar 2019 Pro forma for

Helix

31 Mar 2019 qoq %

Stage 1 0.08 0.10 0.10 -18%

Stage 2 1 0.08 0.05 0.08 63%

Stage 3 1 1.98 2.08 3.67 -5%

Total 2.14 2.23 3.85 -4%

• Net reclassification of c.€500 mn gross

loans from Stage 1 to Stage 2 in 2Q2019,

due to further calibration of the Bank’s

IFRS 9 models

• Stage 3 gross loans reduced by c.€3.0 bn

in 2Q2019 reflecting Helix completion (€2.7

bn) and €300 mn organic NPE reduction

49

133

156

255

192

0

127

127

127

0

153

204

191

191

191

203

224

230

234

234

234

0

97

114

167 233 79 26 639 280 124

Residential Offices and other commercial properties Manufacturing and industrial Hotels Land and Plots Golf Greece and Romania

€ mn

Properties managed by REMU

37

REMU focus now on sales (Group)

Property stock split as at 30 June 2019 - on boarded at conservative carrying value (Group)

103

126

118

Impairment loss

1,530 (10)

Transfer to non-current

assets and disposal

groups held for sale

Properties managed by

REMU as at 01 Jan 2019

Additions

(6)

1,427

(92)

Sales Properties managed by

REMU as at 30 Jun 2019

1,548

1,430

BV (€ mn)

1,2

(1) In addition to assets held by REMU, properties classified as ‘Investment properties’ with carrying value of €24 mn as at 30 June 2019 (compared to €24 mn as at 31 December 2018) relate to legacy properties

(2) Assets in REMU on boarded at conservative prices c.25%-30% discount to open market value (OMV)

Assets #

Total Cyprus: €1,424 mn

€1,548 mn

3,254 1,778 54 653 233 4 4 554

Investment Properties

1 1

1

49

133

156

255

192

0

127

127

127

0

153

204

191

191

191

203

224

230

234

234

234

0

97

114

SOURCE: Central Bank of Cyprus, Cyprus Land Registry

REMU – the engine for dealing with foreclosed assets

38

110

40

64 60

55

71

28

42

30

62

1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 2Q2018 3Q2018 4Q2018 1Q2019 2Q2019

92

8

17

17

50

Total Sales(1H2019)

Hotels Commercial Residential Land

Hotels Commercial Residential Land

Book Value sales by type (Group) Book Value Sales of €62 mn for the 2Q2019 (Group)

(1) 2Q2017 sales include a disposal of a property (€10 mn) which was classified in investment properties held for disposal

(2) 4Q2017 sales include a disposal of a property (€7.5 mn) which was classified in investment properties held for disposal

1 2

Encouraging trends in Real Estate Market; Property prices up 1.5%

in 2018Q4

3078

2482

4,527 4,952

7,063

8,734 9,242

5,560

02,0004,0006,0008,000

10,00012,00014,00016,00018,00020,00022,00024,000

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

Ja

n-J

un

Sales to Cypriots Sales to Non-Cypriots

Sales contracts – Excluding DFAs

(number of contracts)

75.7

1.4 1.5

1.6

1.5

-12.0

-10.0

-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

110.0

120.0Central Bank Residential Property Price index

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

Sale contracts (excl. DFAs) in 2019 Jan-Jun up 24% yoy

BV (€ mn)

BV (€ mn)

49

133

156

255

192

0

127

127

127

0

153

204

191

191

191

203

224

230

234

234

234

0

97

114

Appendix – Additional financial information

39

49

133

156

255

192

0

127

127

127

0

153

204

191

191

191

203

224

230

234

234

234

0

97

114

Assets (€ mn) 30.06.19

31.12.2018

(restated)

%

change

Cash and balances with

Central Banks 5,262 4,610 14%

Loans and advances to

banks 403 473 -15%

Debt securities, treasury bills

and equity investments 1,881 1,515 24%

Net loans and advances to

customers 10,949 10,922 0%

Stock of property 1,430 1,427 0%

Investment properties 142 127 11%

Other assets 1,622 1,531 6%

Non current assets and

disposal groups classified as

held for sale

198 1,470 -87%

Total assets 21,887 22,075 -1%

Liability and Equity (€ mn) 30.06.19

31.12.18

(restated)

%

change

Deposits by banks 532 432 23%

Funding from central banks 830 830 -

Repurchase agreements 248 249 0%

Customer deposits 16,377 16,844 -3%

Subordinated loan stock 261 271 -4%

Other liabilities 1,169 1,082 8%

Total liabilities 19,417 19,708 -1%

Shareholders’ equity 2,222 2,121 5%

Other equity instruments 220 220 -

Total equity excluding non-

controlling interests 2,442 2,341 4%

Non controlling interests 28 26 8%

Total equity 2,470 2,367 4%

Total liabilities and equity 21,887 22,075 -1%

Consolidated Balance Sheet

40

The Group has decided to classify the leased properties acquired in exchange of debt and

leased out under operating leases upon on-boarding as ‘Investment Properties’ instead of

‘Inventories’. This change has been applied retrospectively, resulting in the restatement of

comparatives .As a result of the above change in classification, properties with carrying value

of €118 mn were reclassified from the stock of properties (measured at the lower of cost and

net realisable value under IAS 2) to investment properties (measured at fair value under IAS

40) as at 30 June 2019 (compared to €103 mn as at 31 December 2018). These properties

continue to be managed by REMU. This change in classification had no material impact on the

Group’s comparative retained earnings and a cumulative impact of €1 mn gain has been

recognised under ‘Net gains from revaluation and disposal of investment properties and on

disposal of stock of properties’ in 2Q2019.

49

133

156

255

192

0

127

127

127

0

153

204

191

191

191

203

224

230

234

234

234

0

97

114

37.5% 37.1% 38.6%

45.4% 47.1%

41.3%

31.1% 32.8%

35.1% 36.0% 34.7% 34.7%

Dec 16 Dec 17 Jun 18 Dec 18 May 19before Helix

Jun 19after Helix

Loans new basis Deposits

Core Cypriot business

41 (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

29.5% 31.5% 34.1% 35.3% 34.4% 34.0%

35.8% 37.3% 38.8% 38.3% 38.2% 37.2%

Dec 16 Dec 17 Jun 18 Dec 18 Mar 19 Jun 19

Residents Non-residents

1

Market shares1 Strong market shares in resident and non-resident deposits

133 121

108 91

77 58 47

3 2 2 1 1 1 1 -50

-30

-10

10

30

50

70

90

110

130

150

170

190

210

230

250

4Q2017 1Q2018 2Q2018 3Q2018 4Q2018 1Q2019 2Q2019

Time & Notice accounts

Savings and Current accountsCost of deposits

Customer deposit rates decline further (bps) (Cy)

495 491 486 483 475 468 460 413

76 69 59 49 41 32 24 24

419 422 427 434 434 436 436 389

4Q2017 1Q2018 2Q2018 3Q2018 4Q2018 1Q2019 2Q2019 2Q2019

Yield on Loans Cost of Deposits Customer spread

Average contractual interest rates (bps) (Cy)

76 69 59 49 32 41 24

Excluding

Helix

49

133

156

255

192

0

127

127

127

0

153

204

191

191

191

203

224

230

234

234

234

0

97

114

€ mn Underlying

basis

Helix

Portfolio

Investment in associate

classified as HFS

Tax related

items Other

Statutory

Basis

Net interest income 170 34 - - - 204

Net fee and commission income 75 6 - (6) - 75

Net foreign exchange gains and net gains on financial instrument transactions and

disposal/dissolution of subsidiaries and associates 26 - - - - 26

Insurance income net of claims and commissions 30 - - - - 30

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

of properties 16 - - - - 16

Other income 16 - - - - 16

Total income 333 40 - (6) - 367

Total expenses (208) (23) - - (9) (240)

Operating profit 125 17 - (6) (9) 127

Loan credit losses (87) (17) - - - (104)

Impairments of other financial and non-financial instruments (10) - - (8) - (18)

Reversal of provisions for litigation, regulatory and other matters 3 - - - (3) -

Remeasurement of investment in associate classified as held for sale - - (26) - - (26)

Share of profit from associate - - 5 - - 5

Profit/ (loss) before tax and non-recurring items 31 - (21) (14) (12) (16)

Tax 0 - - 115 - 115

(Profit) attributable to non-controlling interests (2) - - - - (2)

Profit after tax and before non-recurring items 29 - (21) 101 (12) 97

Advisory and other restructuring costs – excluding discontinued operations and NPE sale

(Helix) (12) - - - 12 -

Profit/(loss) after tax – Organic 17 - (21) 101 - 97

Profit relating to NPE sale (Helix) 0 (0) - - - -

Loss relating on remeasurement of investment in associate classified 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 101 - - (101) - -

Profit after tax (attributable to the owners of the Company) 97 - - - - 97

Income Statement bridge1 for 1H2019

(1) Please refer to section B1 “Reconciliation of income statement between statutory and underlying basis” of the Group Financial Results for the period 30 June 2019

42

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127

127

127

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153

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191

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234

234

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97

114

Analysis of Interest Income and Interest Expense

43

Analysis of Interest Income (€ mn) 1Q20191,2 2Q20192

Loans and advances to customers 104 101

Loans and advances to banks and central banks 2 2

Investments available-for-sale - -

Investment at amortised costs 3 3

Investments FVOCI 5 5

Investments classified as loans and receivables - -

114 111

Trading Investment - -

Derivative financial instruments 9 9

Other investments at fair value through profit or loss - -

Total Interest Income 123 120

Analysis of Interest Expense (€ mn)

Customer deposits (13) (10)

Funding from central banks and deposits by banks (1) (1)

Subordinated loan stock (6) (6)

Repurchase agreements (2) (2)

Negative interest on loans and advances to banks and central banks (4) (4)

(26) (23)

Derivative financial instruments (12) (12)

Total Interest Expense (38) (35)

(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 ‘Profit/(loss) relating to NPE sale (Helix)’ in the underlying

basis

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127

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127

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234

234

0

97

114 € mn

Consumer

Banking

SME

Banking

Corporate

Banking

International

Banking

Wealth &

Markets RRD REMU Insurance Treasury Other

Total

Cyprus

Net interest income/(expense) 80 20 60 18 4 (2) (7) 0 (1) 2 174

Net fee & commission income 22 5 9 26 1 11 - (3) 1 3 75

Other income 1 - - 4 1 - 13 30 15 23 87

Total income 103 25 69 48 6 9 6 27 15 28 336

Total expenses (87) (11) (17) (21) (4) (31) (4) (10) (5) (14) (204)

Operating profit 16 14 52 27 2 (22) 2 17 10 14 132

Loan credit losses of customer loans

net of gains/(losses) on derecognition

of loans and changes in expected cash

flows

(15) 6 7 1 0 (87) - - - 1 (87)

(Impairment)/ reversal of impairment of

other financial and non financial

instruments

- - - - - - (10) - - - (10)

Provision for litigation and regulatory

matters - - - - - - - - - 3 3

Share of profits from associates - - - - - - - - - - -

Profit/(loss) before tax 1 20 59 28 2 (109) (8) 17 10 18 38

Tax - - - - - - - (2) - 2 0

Profit attributable to non controlling

interest - - - - - - - - - (2) (2)

Profit/(loss) after tax and before

restructuring costs, Helix, UK sale

and reversal of DTA impairment and

impairment of tax receivables

1 20 59 28 2 (109) (8) 15 10 18 36

Cyprus: Income Statement by business line1 for 1H2019

44

Excluding Helix

(1) The interest income, non-interest income, staff costs, other operating expenses and loan credit losses related to Project Helix are disclosed under ‘Profit/(loss) relating to NPE sale (Helix)’ in

the underlying basis

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127

127

127

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234

234

234

0

97

114 € mn 30.06.19

Group Equity per financial statements 2,471

Less: Intangibles (43)

Less: Deconsolidation of insurance and other entities (193)

Less: Regulatory adjustments (IFRS 9 and other items) 97

Less: Revaluation reserves and other unrealised items transferred to

Tier II (252)

CET 1 2 2,080

Risk Weighted Assets 13,962

CET 1 ratio 2 14,9%

Risk Weighted Assets – Regulatory Capital

31.12.18 31.03.193 30.06.194

Total equity excl. non-controlling interests 2,341 2,443 2,443

CET1 capital 1,864

2,058 2,080

Tier I capital 2,084 2,278 2,300

Tier II capital 212 213 192

Total regulatory capital (Tier I + Tier II) 2,296 2,491 2,492

45

(1) Other primarily relates to exposures in Serbia

(2) Allowing for IFRS 9 transitional arrangements

(3) Capital ratios include unaudited/un-reviewed profits for 1Q2019

(4) Capital ratios include reviewed profits for 1H2019

31.12.17 31.12.18 31.03.19 Helix 30.06.19

Cyprus 16,011 15,070 15,113 (1,452) 13,680

Russia 27 24 23 21

United Kingdom 922 84 77 69

Romania 118 38 37 40

Greece 168 144 128 136

Other1 14 13 13 16

Total RWA 17,260 15,373 15,391 (1,452) 13,962

RWA intensity 73% 70% 71% 64%

31.12.17 31.12.18 31.03.19 Helix 30.06.19

Credit risk 15,538 13,833 13,852 (1,514) 12,361

Market risk 5 2 - 62 62

Operational risk 1,717 1,538 1,539 - 1,539

Total 17,260 15,373 15,391 (1,452) 13,962

Risk weighted assets by Geography (€ mn) Reconciliation of Group Equity to CET 1

Risk weighted assets by type of risk (€ mn) Equity and Regulatory Capital (€ mn)

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114

10.5%

0.5%

15.2%

c. 11.0%

CET1 30 June 2019

Pro forma for the sale of

CNP 2

Potential 2019 MDA Threshold

Buffer to MDA Restrictions Level & Distributable Items1

Pro Forma2 CET1 Ratios (Pro forma for CNP)

Unfilled

AT1 + T2

capacity

420 bps

[ ] bps Distance

to MDA CET1

Ratio (%)

CET1

Req

Unfilled AT1 &

T2 Bucket

(1) Distributable Items definition per CRR

(2) In June 2019 the Bank signed a binding agreement to sell its entire shareholding of 49.9% in its associate CNP Insurance Holdings Limited (“CNP”). Calculations on a pro

forma basis assume completion of the sale that is expected to occur in the second half of 2019. https://www.bankofcyprus.com/globalassets/investor-relations/press-

releases/eng/20190604-announcement_projectzenon_spaexecution_eng_final.pdf (3) 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 2018 and 2017. 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

Distributable Items at Bank and BOCH level

• Distributable Items amount to:

- Bank: c.€0.4bn and

- BOCH: c.€0.7bn

• No prohibition applies to the payment of coupons on any AT1 capital

instruments issued by the Company and the Bank3

• Significant CET1 MDA buffer: ~420bp (~€570 mn)

Maximum Distributable Amount for BOCH

46

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12.40 13.83 14.96 14.53 14.69

2.20 1.74 1.48 1.38 1.30 1.69 2.11 0.29 0.29

0.28

0.22 0.17

0.11 0.10 0.11

16.51 17.85 16.84 16.30 16.38

Dec-16 Dec-17 Dec-18 Mar-19 Jun-19

EUR USD GBP Other Currencies

Analysis of Deposits

90%

8% 2%

0%

47

Deposits by Currency (€ bn) 30 June 2019 (%)

30 June 2019 (%)

50%

9%

41%

9.27 10.00 8.78 8.44 8.14

1.06 1.54 1.35 1.37 1.42

6.18 6.31

6.71 6.49 6.82

16.51 17.85 16.84 16.30 16.38

Dec-16 Dec-17 Dec-18 Mar-19 Jun-19

Time deposits Savings accounts Current & demand accounts

1

Deposits by Type (€ bn)

6.73 6.63 5.96 5.70 5.79

0.80 0.91 0.83 0.76 0.76

8.98 10.31 10.05

9.84 9.83

16.51 17.85 16.84 16.30 16.38

Dec-16 Dec-17 Dec-18 Mar-19 Jun-19

Corporate SME Retail

1

Deposits by customer Sector (€ bn) 30 June 2019 (%)

35%

5% 60%

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

1

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Reduction in Overseas Non-Core Exposures

44 31 23 21 19

149

79

35 33 34

42

9

7 7 8

11 1 1

283

193

164 152 152

518

312

240

214 214

Dec 2016 Dec 2017 Dec 2018 Mar 2019 Jun 2019

Russia: Net exposure Romania: Net exposure Serbia: Net exposure

UK: Net exposure Greece: Net exposure

48

• The Group continues its efforts for further

deleveraging and disposal of non-essential assets

and operations in Greece, Romania and Russia.

• In accordance with the Group’s strategy to exit from

overseas non-core operations, the operations of the

branch in Romania were terminated in January

2019, following the completion of deregistration

formalities with respective authorities.

• During 2Q2019 the Group signed a binding

agreement for the disposal of the overseas

exposures in Serbia and it was reclassified as held

for sale.

• In addition as at 30 June 2019, there were €311 mn

of overseas exposures in Greece (€157 mn at 31

March 2019) not identified as non-core exposures.

The qoq increase is mainly driven by new lending

provided to Greek entities investing in Cyprus,

granted by the Bank in the normal course of

business.

Overseas non-core exposures (€ mn)

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Appendix – Glossary & Definitions

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Glossary & Definitions

50

Allowance for expected credit

losses on loans and

advances to customers

(previously accumulated

provisions)

Allowance for expected credit losses to cover credit risk on loans and advances to customers comprise: (i) allowance for ECL on loans and advances to

customers, (ii) the fair value adjustment on initial recognition of loans and advances to customers, (iii) allowance for expected credit losses for off-balance sheet

exposures (contingent liabilities and commitments) disclosed on the balance sheet within other liabilities and (iv) accumulated fair value adjustments on loans

and advances to customers classified 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 Interest Earning Assets

AT1 AT1 (Additional Tier 1) is defined in accordance with Articles 51 and 52 of the Capital Requirements Regulation (EU) No 575/2013.

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 of the three quarter month end contractual rates

Book Value BV= book value = Carrying value prior to the sale of property

BOC UK sale Comparatives have been represented for the results of Bank of Cyprus UK Limited (‘BOC UK’) and its subsidiary, Bank of Cyprus Financial Services Limited

(‘BOC FS’, and together the ‘UK Group’), from continuing operations to discontinued operations

CET1 capital ratio

(transitional basis) CET1 capital ratio (transitional basis) is defined in accordance with the Capital Requirements Regulation (EU) No 575/2013

CET1 fully loaded (FL) The CET1 fully loaded (FL) ratio is defined in accordance with the Capital Requirements Regulation (EU) No 575/2013

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 ‘loan credit losses’ (as defined) divided by average gross loans (the average balance

calculated as the average of the opening balance and the closing balance)

Cost to Income ratio Cost-to-income ratio comprises total expenses (as defined) divided by total income (as defined)

CRR DD Default Definition

DFAs Debt for Asset Swaps

DFEs Debt for Equity Swaps

DTA Deferred Tax Assets

EBA European Banking Authority

ECB European Central Bank

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Glossary & Definitions

51

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

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 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 €290 mn at 30 June 2019 (compared to €445 mn at 31 March 2019, €462

mn at 31 December 2018, €480 mn at 30 September 2018, €514 mn at 30 June 2018 and to €566 mn at 31 March 2018).

Additionally, gross loans (i) include loans and advances to customers measured at fair value through profit and loss of €454 mn at 30 June 2019 (compared to

€454 mn as at 31 March 2019 and €456 mn as at 31 December 2018), and (ii) are reported after the reclassification between gross loans and expected credit

losses on loans and advances to customers classified as a disposal group held for sale of Nil as at 30 June 2019 (compared to €104 mn at 31 March 2019 and to

€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

Legacy Legacy relates to RRD, REMU and non-core overseas exposures

Loan credit losses Loan credit losses comprises: (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 on loans and advances to customers at FVPL.

LLR (Loans Loss Reserve) Please refer to allowance for expected loan credit losses as defined above (previously ‘Accumulated provisions’)

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 41.3% at 30 June 2019, compared to 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).

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Glossary & Definitions

52

Net Proceeds Proceeds after selling charges and other leakages

NIM Net interest margin is calculated as the net interest income (annualised) divided by the quarterly average interest earning assets adjusted for the respective

interest earning assets of any discontinued operations at each quarter end.

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

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 customer loans and advances, plus investments (excluding equities and mutual funds)

Net loans and advances Loans and advances 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 deposits ratio is calculated as the net loans and advances to customers divided by customer deposits, including net loans and deposits held for sale,

where applicable

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 other financial instruments and loss on

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

Non-recurring items

Non-recurring items as presented in the ‘Interim Condensed Consolidated Income Statement – Underlying basis’ relate to: (i) advisory and other restructuring

costs, (ii) discontinued operations (UK sale), (iii) profit/(loss) relating to NPE sale (Helix), (iv) loss relating to sale of associate (CNP) including share of profit from

associates, and (v) reversal of impairment of DTA and impairment of other tax receivables.

NPEs

Non-Performing Exposures (NPEs) –as per the EBA definition: According to the EBA reporting standards on forbearance and non-performing exposures (NPEs),

published on 2014 and ECB’s Guidance to Banks on Non-Performing Loans published on March 2017 a loan is considered an NPE if:

1. the debtor 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

2. the exposures are impaired or

3. there are material exposures which are more than 90 days past due, or

4. there are performing forborne exposures under probation for which additional forbearance measures are extended, or

5. there are performing forborne exposures under probation that present more than 30 days past due within the probation period. The NPEs are reported

before the deduction of accumulated 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 Provision

coverage ratio’)

The NPE coverage ratio is calculated as 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 Include Helix and Velocity sales of GBV of €2.7 bn and €33 mn as at 31 March 2019

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Glossary & Definitions

53

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 European Banking Authority (EBA) is working on finalising the NSFR and enforcing it as a regulatory ratio

under CRR2, currently expected in 2021

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).

Pro forma for Helix In addition to the impact from Project Helix, this pro forma also included 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 restructuring costs,

discontinued operations

and NPE sale (Helix)

Excludes advisory and other restructuring costs. It also excludes profit/(loss) from discontinued operations and any restructuring costs or loss relating to the NPE

sale (Helix)

Profit after tax-organic Profit/(loss) after tax and before ‘non-recurring items’ as defined, except for the “Advisory and other restructuring costs – excluding discontinued operations and

NPE sale (Helix)”.

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

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Glossary & Definitions

54

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-excluding discontinued operations and NPE sale (Helix)’ or any restructuring costs.

‘Advisory and other restructuring costs-excluding discontinued operations and NPE sale (Helix)’ amount to €5 mn for 2Q2019, €7 mn for 1Q2019, €42 mn for

FY2018 (€16 mn for 4Q2018, €11 mn for 3Q2018, €7 mn for 2Q2018 and €8 mn for 1Q2018) and €29 mn for the year ended 31 December 2017.

Restructuring costs relating to NPE sale (Helix) amount to €7 mn for 2Q2019, €1 mn for 1Q2019, €18 mn for FY2018 (€1 mn for 4Q2018, €5 mn for 3Q2018, €6

mn for 2Q2018 and €6 mn for 1Q2018) and €Nil for the year ended 31 December 2017.

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 comprise loan credit losses (as defined), plus (provisions)/reversal of provisions for litigation, regulatory and

other matters plus (impairments)/reversal of impairments of other financial and non-financial assets.

T2 Tier 2 Capital

Underlying basis Statutory basis adjusted for certain items as detailed in the Basis of Presentation.

Write offs and non

contractual 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