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

Bank of Cyprus Group

Group Financial Results

For the six months ended 30 June 2021

Group Financial Results for the six months ended 30 June 2021

DISCLAIMER

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 2021 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 2021 (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. 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-IFRSmeasure, 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. 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.

2

Group Financial Results for the six months ended 30 June 2021

Highlights

3

Group Financial Results for the six months ended 30 June 2021

1H2021 - Highlights

Strong Recovery

Underway

Positive Operating

Performance

Operating Efficiency

Good Capital

Strong Liquidity

Balance Sheet Repair

Continuing

€894 mn

New lending

€57 mn

Operating Profit

58%

Cost/Income2

14.2%

CET1 ratio3

6.4%

Net NPE ratio

• 12.9% GDP growth in 2Q2021
• Continuing to support this recovery; new lending of €894 mn in 1H2021, up 30% yoy
• Tourism demonstrating signs of recovery; July 2021 arrivals +358% yoy or 54% of July 2019 levels
•	78% of adult population in Cyprus vaccinated with first dose1 and 74% have completed their
	vaccination regime
• Total income of €152 mn for 2Q2021, up 11% qoq
• Cost of risk of 52 bps for 2Q2021, improved by 14 bps qoq
• Profit after tax and before non-recurring items of €34 mn for 2Q2021 and €51 mn for 1H2021
•	After recognising exceptional costs, loss after tax of €7 mn for 2Q2021 and profit after tax of
	€1 mn for 1H2021
• Total operating expenses2 of €89 mn for 2Q2021, up 7% qoq reflecting seasonality in prior quarter
• Cost to income ratio2 at 58% for 2Q2021, down 2 p.p. qoq
•	CET1 ratio of 14.2%3 and Total Capital ratio of 19.2%3
• MREL interim requirement as of 1 Jan 2022 already achieved through the successful refinancing
	of Tier 2 and the inaugural issuance of Senior Preferred notes in 2Q2021
• Deposits at €16.8 bn, up 3% qoq; Significant surplus liquidity of €5.7 bn (LCR at 303%)
• €1.3 bn NPE sale (Helix 2 Portfolios A and B) completed in 2Q2021
•	NPEs at €1.6 bn (€0.6 bn net)
• Gross NPE ratio reduced to 14.6% (6.4% net); organic NPE reduction of €171 mn in 1H2021
• Coverage improved to 60% over the quarter
•	96% of performing loans4 under expired payment deferrals with an instalment due by 12 Aug
	2021, presented no arrears

1. Data as at 28 August 2021 (Source: Ministry of Health)
2. Excluding special levy on deposits and other levies/contributions.

3)	Allowing for IFRS 9 and temporary treatment for certain FVOCI instruments transitional arrangements
4)	As at 30 June 2021

4

Group Financial Results for the six months ended 30 June 2021

Strong recovery of Cypriot economy with GDP growing 12.9% in 2Q2021, on the back of improved business activity

• Open, small and flexible economy which has demonstrated historically that it can quickly recover from economic crises
• Strong rebound in consumption and business activity in the first 5 months of the year, pointing to a strong recovery in 2021:
• • Building permits up 35% yoy and above the same period in 2019
  • Industrial production up 10% yoy; down 4% over the same period in 2019
  • Retail sales excluding vehicles up 8% yoy and up 4% over the same period in 2019
• Outlook for Cypriot economy continues to improve; the Ministry of Finance currently expects growth of c.5.5% in 2021, significantly higher than initially anticipated (c.3.6% in April 2021)
• The implementation of Cyprus' Recovery and Resilience Plan (€1.2 bn) is expected to support domestic activity and employment through higher investment and to enhance growth potential via reforms (see slides 40-41)

Strong economic rebound in 2Q2021

GDP yoy change

13.6%

15.00%

12.00%

9.00%	-4.6%	-4.4%	12.9%
3.00%
6.00%

0.00%				-2.1%
-3.00%	-12.5%
-6.00%		-4.2%	-4.9%	-1.8%
-12.00%
-9.00%
-18.00%	-14.6%
-15.00%
	2Q2020	3Q2020	4Q2020	1Q2021	2Q2021
		Cyprus 1	Euro Area 1

Gradual recovery of tourist arrivals

(in '000)

• Cyprus vaccination rollout amongst the most successful in EU; 78% of adult

population in Cyprus vaccinated with first dose2 and 74% have completed their

vaccination regime

510

551

297

•	Jul 2021 54% of Jul
	2019 levels
•	Aug and Sept 2021
	expected to show

•	Tourism is showing signs of recovery; July 2021 tourist arrivals +358% yoy or
	54% of July 2019 levels; Tourism season anticipated to be extended to later in
	the year
•	Loan government guarantee scheme of c.€1.0 bn (guarantee of 70%) to
	support short-term cash flow approved by the European Commission in Aug
	2021; pending approval of the amended legislation by the Parliament

184

65

9

JunJul

2019 2020 2021

1. Source: Cyprus Statistical Service, Eurostat
2. Data as at 28 August 2021 (Source: Ministry of Health)

similar trends

5