Bank of Cyprus Public : Investor Presentation of the Group Financial Results for the nine months ended 30 September 2021

Bank of Cyprus Group

Group Financial Results

For the nine months ended 30 September 2021

Group Financial Results for the nine months ended 30 September 2021

DISCLAIMER

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

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 nine months ended 30 September 2021 (the

"Presentation"), available onhttps://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. Moreover, the Investor Presentation includes additional financial information not presented in the Results Announcement of current and expected medium term levels for (i) NPE coverage and (ii) ESG performance metrics. 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 2020 and updated in the Interim Financial Report 2021. 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.

Forward Looking Statements

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, medium 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, information technology, litigation and other operational risks, adverse market conditions, the impact of outbreaks, epidemics or pandemics, such as the COVID-19 pandemic and ongoing challenges and uncertainties posed by the COVID-19 pandemic for businesses and governments around the world. 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 at 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.

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Group Financial Results for the nine months ended 30 September 2021

Highlights

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Group Financial Results for the nine months ended 30 September 2021

3Q2021 - Highlights

Strong recovery

continues

Positive Operating

Performance

Operating Efficiency

Strong Capital and

Liquidity

Single digit NPE ratio4

€1.3 bn

New lending ytd

€41 mn

Operating Profit

64%

Cost/Income2

15.3%

CET1 ratio3,4

3.6%4

Net NPE ratio

• 5.3% GDP growth in 3Q2021, well above the eurozone average of 3.7%
• GDP expected to grow by c.5.5%1 in FY2021 and recover to pre-pandemic levels by year-end
• Continuing to support the recovery; new lending of €1.3 bn in 9M2021, up 35% yoy
• Total income of €139 mn for 3Q2021, down 8% qoq partly impacted by Helix 2 completion
• Strong net fees and commissions at €44 mn for 3Q2021; 32% of total income
• Profit after tax and before non-recurring items of €13 mn for 3Q2021 and €64 mn for 9M2021
• Profit after tax of €19 mn for 3Q2021 and €20 mn for 9M2021
• Total operating expenses2 of €89 mn for 3Q2021, flat qoq
• Cost to income ratio2 at 64% for 3Q2021, up 6 p.p. qoq, mainly impacted by Helix 2 completion
• CET1 ratio of 15.3%3,4 and Total Capital ratio of 20.4%3,4
• Deposits at €17.1 bn up 2% qoq; significant surplus liquidity of €6.0 bn (LCR 294%)
• NPE sale signed in November 2021 (Helix 3), reducing NPE ratio to 8.6%4 (3.6%4 net), already in line with 2022 target
• NPEs reduced to €0.9 bn4 (€0.4 bn4 net)
• Organic NPE reduction of c.€300 mn in 9M2021
• 96% of performing loans5 under expired payment deferrals with an instalment due by 22 November 2021, presented no arrears

		On-track to achieve our Medium Term Targets
1)	Source: Ministry of Finance		4) Pro forma for Helix 3
2)	Excluding special levy on deposits and other levies/contributions
	5) As at 30 September 2021
3)	Allowing for IFRS 9 and temporary treatment for certain FVOCI instruments transitional arrangements

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Group Financial Results for the nine months ended 30 September 2021

Significant progress achieved on strategic priorities

Single digit NPE ratio achieved

31.3%	26.3%	8.6%
		-78%
€ bn	4.1
		3.2
			0.9

Sep 19	Sep 20	Sep 21
		pro forma
NPE ratio	for Helix 3

New lending recovering towards pre-pandemic levels

€ bn		-18%
1.6
		1.3
		1.0
	9M2019	9M2020	9M2021

Preserved strong capital

CET1 ratio 1

15.2%

14.6%

15.3%

Sep 19	Sep 20	Sep 21
		pro forma
		for Helix 3

Cost of Risk normalizing post	NII impacted by de-risking and rates	Net fees above pre-pandemic	Focus on further improving efficiency
NPE sales		levels
			58%	59%	61%

		€ mn		-14%		€ mn	+15%		€ mn	-10%
	1.25%	260				128	289
1.19%		250	223	111	106	249	260
		Legacy	83	59
		43				122	104	108
		0.66%
			177	191	180				167	145	152
9M2019	9M2020	9M2021	9M2019	9M2020	9M2021	9M2019	9M2020	9M2021	9M2019	9M2020	9M2021

			Operating expenses2	C/I ratio2
			Staff costs
1)	Allowing for IFRS 9 and temporary treatment for certain FVOCI instruments transitional arrangements
2)	Excluding special levy on deposits and other levies/contributions

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