Bank of Cyprus Group...1 Audited Financial Results for the year ended 31 December 2013 27 March 2014...
Transcript of Bank of Cyprus Group...1 Audited Financial Results for the year ended 31 December 2013 27 March 2014...
1
Audited Financial Results for the year ended 31 December 2013
27 March 2014
Bank of Cyprus Group
Financial Results FY2013 – Highlights
Income Statement Review
Restructuring
Balance Sheet Review
Appendices
2
Certain statements, beliefs and opinions in this presentation are forward-looking. Such statements can be generally identified by the use of terms such as “believes”, “expects”, “may”, “will”, “should”, “would”, “could”, “plans”, “anticipates” and comparable terms and the negatives of such terms. By their nature, forward-looking statements involve risks and uncertainties and assumptions about the Group that could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements. These risks, uncertainties and assumptions could adversely affect the outcome and financial effects of the plans and events described herein. We have based these forward-looking statements on our current expectations and projections about future events. Any statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Readers are cautioned not to place undue reliance on forward-looking statements, which are based on facts known to and/ or assumptions made by the Group only as of the date of this presentation. We assume no obligation to update such forward -looking statements or to update the reasons that actual results could differ materially from those anticipated in such forward-looking statements. This presentation does not constitute an offer to sell, or a solicitation of an offer to buy, any security in any jurisdiction in the United States, to United States Domiciles or otherwise. The delivery of this presentation shall under no circumstances imply that there has been no change in the affairs of the Group or that the information set forth herein is complete or correct as of any date. This presentation shall not be used in connection with any investment decision regarding any of our securities, which should only be made based on expressly authorised materials from us identified as such, nor in connection with any decision whether or how to vote on any matter submitted to our stockholders. The securities issued by Bank of Cyprus Public Company Ltd have not been, and will not be, registered under the US Securities Act of 1933 (“the Securities Act”), or under the applicable securities laws of Canada, Australia or Japan.
Following the Eurogroup decisions to recapitalise Bank of Cyprus (Bank) via a bail-in of depositors, the Bank was placed under resolution from 25 March 2013 until 30 July 2013, a period during which it was recapitalised and restructured in accordance with the decrees issued by the Central Bank of Cyprus in its capacity as Resolution Authority. In this context, the banking and leasing operations of the Bank in Greece were sold to Piraeus Bank S.A. as per the Sale of Greek Operations of Bank of Cyprus Public Company Ltd Decree of 2013. Hence, the financial results of the Greek operations are presented as discontinued operations. The Bank acquired the operations of Cyprus Popular Bank Public Co Ltd (Laiki Bank) in Cyprus as per the Sale of certain operations of Cyprus Popular Bank Public Co Ltd Decree of 2013. Hence the financial results of Laiki Bank are fully consolidated as from the date of the transfer, 29 March 2013. It is noted that the fair value of the transferred assets and liabilities for the purposes of accounting for the business combination of the Group is provisional in accordance with IFRSs.
Disclaimer
3
Financial Results FY2013 Highlights
Financial Results FY2013 – Highlights
Income Statement Review
Appendices
Balance Sheet Review
Restructuring
Following the Eurogroup decisions to recapitalise Bank of Cyprus via a bail-in of depositors, the Bank was placed under resolution from 25 March 2013 until 30 July 2013, a period during which it was recapitalised and restructured in accordance with the decrees issued by the Central Bank of Cyprus in its capacity as Resolution Authority. Due to the corporate actions that took place during this period, it is not possible to compare figures and results of the Group with past financial periods.
4
• Loss from continuing operations €77 mn for 4Q2013; including restructuring costs of €26 mn, loss attributable to shareholders €103 mn
• Loss from continuing operations €426 mn for FY2013; including restructuring costs of €168 mn and €1.456 mn losses from discontinued operations and from disposal of Greek operations, loss attributable to shareholders €2.050 mn
• Profit before impairments, restructuring costs and discontinued operations €184 mn for 4Q2013 (€622 mn for FY2013)
• Net interest income €274 mn for 4Q2013 (€999 mn for FY2013) and Net Interest Margin 3,87% for 4Q2013 (3,62% for FY2013)
• Cost to income ratio at 47% for FY2013
• Deposit base showing signs of stabilisation during 4Q2013, with deposits in Cyprus reduced by 2% (compared to a 10% reduction during 3Q2013)
• ELA funding reduced to €9,56 bn; ECB funding at €1,40 bn
• 90+ DPD* showing signs of stabilisation, with growth rate contained to 0,2% for 4Q2013 (compared to growth rate of 18% during 3Q2013)
• Core tier 1 capital ratio sustained at 10,2%; Ratio affected negatively by a 2% reduction in core tier 1 capital (a negative impact of 0,2 percentage points) and benefited by a 2% reduction in RWA (a positive impact of 0,2 percentage points)
* 90+ DPD are loans with a specific provision (i.e. impaired loans) and loans past-due for more than 90 days as per IFRS.
Financial Results FY2013 Highlights
5
• Integration of ex-Laiki business on track
• Branches in Cyprus reduced to 130 from 203 in May 2013; another 3 branches to be closed during 2014
• Next milestone for integration process is the IT banking system unification scheduled to be completed by end of 1H2014
• Implementation of new organisational structure for simplification and for organising along functional, domestic, international and restructuring lines
• Establishment of Restructuring and Recoveries Division to focus management on collections and recovery efforts in line with the recent Directive on Arrears Management
• Improving liquidity position and stabilizing signs of deposit base allowed the release of the 6-month blocked deposits maturing end-January 2014
• Deleveraging progressing well with the sale of the Ukrainian business; though a negative impact of 0,2%* on Core tier 1 capital ratio, the transaction facilitates the de-risking of balance sheet and eliminates future potential risks relating to the Group’s investment in Ukraine given political and economic conditions in the country
Recent Developments
* Based on the December 2013 balance sheet position
6
Income Statement Review
Financial Results FY2013 – Highlights
Income Statement Review
Restructuring
Balance Sheet Review
Appendices
7
Income Statement Review Selected lines from Income Statement (€ mn ) FY2013 FY2012 Change 4Q2013 3Q2013 Change
Net Interest income 999 702 +42% 274 296 -8%
Net fee & commission income 169 173 -2% 43 41 +6%
Other income 6 45 -87% (3) 24 -113%
Total income 1.174 920 +28% 314 361 -13%
Total expenses (552) (545) +2% (130) (137) -5%
Profit before impairments, restructuring costs and discontinued operations 622 375 +66% 184 224 -18%
Provisions for impairment of loans and advances (1.067) (1.339) -20% (268) (261) +3%
Share of profit/(loss) from associates 2 - - - (1) -
Tax 5 43 - 2 1 -
Loss attributable to non-controlling interests 12 9 - 5 2 -
Loss after tax and before restructuring costs and discontinued operations (426) (912) -53% (77) (35) +118%
Restructuring costs (168) (10) - (26) (107) -
Loss from discontinued operations, on disposal of Greek operations, impairment on GGBs and impairment of goodwill (1.456) (1.292) - - - -
Loss after tax (2.050) (2.214) -7% (103) (142) -28%
Net interest margin 3,62% 2,94% +68 b.p. 3,87% 4,02% -15 b.p.
Cost-to-Income (%)* 47% 59% -12 p.p. 41% 38% +3 p.p.
*Excluding the restructuring costs, the losses from discontinued operations and from the disposal of the Greek operations.
b.p. = basis points, p.p. = percentage points ; 100 b.p. = 1 p.p.
8
Net Interest Income (NII) and Net Interest Margin (NIM)
317
402 387
1H2013* 3Q2013 4Q2013
FY2013: 362
296 274
1H2013* 3Q2013 4Q2013
Net Interest Income (€ mn)
Net Interest Margin (bp)
429
* Information for 1Q2013 and 2Q2013 is not available as it has not been possible to publish the financial results for the three months ended 31 March 2013.
• 4Q2013 NII at €274 mn (compared to €296 mn for 3Q2013), mainly due to lower customer spread (i.e. lower yield on loans); FY2013 NII at €999 mn
• 4Q2013 Group NIM at 3,87% (compared to 4,02% for 3Q2013) due to lower net interest income; FY2013 NIM at 3,62%
• NII and NIM continue to be affected by conditions in Cyprus and by the fact that 36% of assets is funded by ELA and ECB funding
9
Analysis of Non Interest Income
173 169
-3
5 63 65
-15 -64
218 175
FY2012 FY2013
Other income/(expense)Insurance incomeFX income & Net income from financial instrumentsFee and commission Income
Non Interest Income (€ mn) • FY2013 Non interest income of €175 mn
• 4Q2013 Non interest income of €40 mn
compared to €65 mn for 3Q2013
• 6% increase in fee and commission income during 4Q2013 relating to higher commissions in Cyprus due to seasonality
• Recurring income from insurance business reflecting the Group’s leading position in the insurance business in Cyprus
• FY2013 other income negatively affected by losses of €78 mn on the revaluation of investment properties (primarily repossessed assets)
Quarterly Non Interest Income (€ mn)
41 43 9 23 12
14 3
-40
65 40
3Q2013 4Q2013
Other income/(expense)Insurance incomeFX income & Net income from financial instrumentsFee and commission Income
10
Total expenses
294 322
251 230
545 552
FY2012 FY2013
Other operating expenses Staff costs
Total expenses (€ mn )
Group Cost to income ratio
Quarterly Total expenses (€ mn )
* Information for 1Q2013 and 2Q2013 is not available as it has not been possible to publish the financial results for the three months ended 31 March 2013.
57%
49% 47%
1H2013* 9M2013 FY2013
83 66
54 64
137 130
3Q2013 4Q2013
Other operating expenses Staff costs
-21%
-5%
• 4Q2013 Total expenses of €130 mn compared to €137 mn for 3Q2013; 5% reduction reflecting primarily the impact of the VRS, with staff costs reduced by 21% during 4Q2013 to €66 mn
• Taking into account the impact of the VRS and salary cuts, the cost-to-income ratio has been reduced to 47% for FY2013 (about 40% for the 2H2013 compared to 57% for 1H2013)
11
Income Statement Highlights Income Statement Highlights (€ mn )
429
70
499
-285
214
-538
-314
296
65
361
-137
224
-261
-35
274
40
314
-130
184
-268
-77
Net interestincome
Non interestincome
Total income Total expenses Profit beforeimpairments
Provisions forimpairments
Loss fromcontinuingoperations
1H2013* 3Q2013 4Q2013
* Information for 1Q2013 and 2Q2013 is not available as it has not been possible to publish the financial results for the three months ended 31 March 2013.
• 4Q2013 Total income of €314 mn, compared to €361 mn for 3Q2013; negatively affected by reduced net interest income and by the losses related to the revaluation of investment properties
• 4Q2013 Profit before impairments of €184 mn, compared to €224 mn for 3Q2013
• 4Q2013 Loss from continuing operations of €77 mn, compared to a loss of €35 mn for 3Q2013
12
Balance Sheet Review
Financial Results FY2013 – Highlights
Income Statement Review
Restructuring
Balance Sheet Review
Appendices
13
• Funding structure dented by the bail-in and the acquisition of Laiki
• Deposits accounted for 49% of total assets at 31 December 2013, compared to 92% a year earlier
• At 31 December 2013 Eurosystem funding at €10,96 bn, comprising ELA of €9,56 bn and ECB funding of €1,4 bn; Between April 2013 and 31 December 2013, the Bank reduced the Eurosystem funding by €450 mn from €11,4 bn (comprising solely ELA) to €10,96 bn and at the same time managed to absorb a significant reduction in its deposit base
11,11 9,86 9,56
1,30 1,40 11,11 11,16 10,96
34% 36% 36%
30.06.13 30.09.13 31.12.13
ECB funding (€ bn) ELA funding (€ bn) ECB + ELA funding % Total assets
Funding from Central Banks
Funding Structure
0,34 2,92 2,79 2,73 2,25
1,96 1,98 1,68
11,11 9,86 9,56
1,30 1,40 28,44
16,97 15,47 14,97
31,03 32,96
31,40 30,34
31.12.12 30.06.13 30.09.13 31.12.13
Total equity Other liabilities ELA
ECB funding Customer deposits
Analysis of Liabilities and Equity (€ bn)
-11%
-9%
-5%
-3%
-3%
-3%
14
Loans to deposits ratio
23,8 22,6 21,8 17,0 15,5 15,0
140% 146% 145%
30.06.13 30.09.13 31.12.13
Net loans (€ bn) Customer deposits (€ bn)
Loans to deposits ratio
• During 4Q2013, the Cypriot operations experienced customer inflows and the deposit base showed signs of stabilisation, with the deposit reduction contained to 2% during the quarter, compared to a 10% reduction in 3Q2013
• Overall, Group deposits declined by 3% during 4Q2013, compared to a reduction of 9% during 3Q2013
• Loans to deposits ratio at 145% at 31 December 2013
Customer Deposits
Deposits by Geography (€ mn )
14.417 13.002 12.706
1.153
1.078 918
1.295
1.285 1.244
105
103 103
16.970
15.468 14.971
30.06.13 30.09.13 31.12.13
Cyprus Russia UK Other
-10% -2%
-9% -3%
15
Loan Quality Problem Loans (€ bn)
2,95 3,43 4,05 4,82 6,66
8,25
10,21
13,13 14,04
4,97 5,07 5,13 6,45
7,69
11,01 12,98 13,00
31.12.11 31.03.12 30.06.12 30.09.12 31.12.12 30.06.13 30.09.13 31.12.13
NPLs (Old definition)NPLs (New definition)90+ DPD
Quarterly change in problem loans (€ bn)
1,97
0,02
2,92
0,91
3Q2013 4Q2013
90+ DPDNPLs (New definition)
• Loan quality challenges continued in 4Q2013. 90+ DPD* show signs of stabilisation, but new-definition NPLs continue to rise as restructured loans remain classified as NPLs for longer
• 90+ DPD totalled €13.003 mn at 31 December 2013 (vs. €12.983 mn at 30 September 2013), with 4Q2013 growth rate contained to a mere 0,2% (vs. 3Q2013 growth rate of 18%)
• NPLs growth rate decelerated to 7% for 4Q2013 (vs. 3Q2013 growth rate of 29%)
qoq:+0,2% qoq:+18%
qoq:+29% qoq:+7%
* 90+ DPD are loans with a specific provision (i.e. impaired loans) and loans past-due for more than 90 days as per IFRS.
16
Group loan quality indicators
30% 31% 40% 35% 48% 42% 37% 38%
17% 18% 18% 23%
27%
39% 47% 49%
31.12.11 31.03.12 30.06.12 30.09.12 31.12.12 30.06.13 30.09.13 31.12.13
90+ DPD provision coverage**
90+ DPD ratio*
Accumulated provisions
1,5 1,6 2,0 2,2 3,7
4,6 4,8 5,0 5,2% 5,5% 7,1% 8,0%
13,1%
16,2% 17,6% 18,6%
0%2%4%6%8%10%12%14%16%18%20%
0
1
2
3
4
5
6
31.12.11 31.03.12 30.06.12 30.09.12 31.12.12 30.06.13 30.09.13 31.12.13
Accumulated provisions (€ bn) Provisions % Gross loans
• 90+ DPD ratio at 49%
• 90+ DPD provision coverage improved to 38%; Taking into account tangible collateral the 90+ DPD are fully covered
• Accumulated provisions at €4,98 bn or 18,6% of gross loans
• Conservative provisioning assessment took into consideration the further expected decline in collateral values following March 2013 events
• Assumptions have been made about the future changes in property values in Cyprus, as well as the timing for the realisation of the collateral and for taxes and expenses on the repossession and subsequent sale of the collateral
Loan Quality
* 90+ DPD ratio is the ratio of 90+ DPD over gross loans. ** 90+ DPD provision coverage is defined as accumulated provisions as a percentage of 90+ DPD.
17
29% 36%
30.06.13
Loans more than 90 days past due or Loans restructured and more than 90 days past due
48%
44%
4%
New definition of NPLs
• New definition of NPLs as from 1 July 2013; new definition NPLs ratio at 53% at 31 December 2013 • With restructured loans remaining classified as NPLs for a longer period, there will be a growing difference
between 90+ DPD and NPLs in the future • NPLs provisioning coverage ratio at 35% at 31 December 2013; taking into account tangible collateral, NPLs
are fully covered • At 31 December 2013, the NPLs ratio comprises Loans restructured and less than 90 days past due (6%
of gross loans) and Loans more than 90 days past due or Loans restructured and more than 90 days past due (47% of gross loans)
30.09.13 30.09.13
48% Old definition New definition
Loans restructured and less than 90 days past due
31.12.13 31.12.13
53%
Loan Quality
53%
47%
6%
18
Capital adequacy ratios
10,5% 10,5% 10,7% 10,2% 10,2% 10,4% 10,2% 10,2% 10,5%
Core tier 1 capitalratio
Tier 1 capital ratio Total capital ratio
30.06.13 30.09.13 31.12.13
• Core tier 1 capital ratio sustained at 10,2%, at the same level as at 30 September 2013. Although negatively affected by a 2% reduction in the core tier 1 capital during the fourth quarter of 2013, the core tier 1 capital ratio was sustained at 10,2% due to a 2% decrease in RWA.
• Aiming to preserve and enhance capital adequacy by retaining internally generated capital, while the activity for restructuring and disposal of non-core assets will be driven by risk mitigation and capital considerations
(€ mn) 30.06.13 30.09.13 31.12.13
Shareholders’ equity 2.838 2.690 2.656
Core tier I capital* 2.478 2.334 2.282
Hybrid capital (Tier I) 0 0 0
Tier I capital 2.478 2.334 2.282
Tier II capital 42 59 76
Total regulatory Capital 2.520 2.392 2.357
Capital position
*Including €60 mn of shares subject to interim orders
Analysis of Risk weighted assets (RWA) (€ bn)
21,12 21,05 20,38
0,55 0,08 0,00 1,84 1,84 2,06
23,51 22,97 22,44
30.06.13 30.09.13 31.12.13
Credit risk Market risk Operational risk
-2% -2%
19
2.334 2.282
+184 -268 -26 +58
Evolution of Core tier 1 capital ratio in 4Q2013
4Q2013 Loss from continuing
operations before tax and non-
controlling interest €84 mn
Core tier 1 capital € mn
30.09.13
Profit before impairments
€ mn
Impairments € mn
Restructuring costs € mn
Core tier 1 capital € mn
31.12.13
10,2% -0,4% -0,1% +0,3% +0,2% 10,2% Core tier 1 capital ratio
22.970 22.441 Risk weighted Assets € mn
-2%
-2%
RWA reduction*
* Reduction in Risk weighted assets due to deleveraging and optimisation of risk weighted assets
Other items** € mn
** Mainly due to other equity movements.
20
Financial Results FY2013 – Highlights
Income Statement Review
Restructuring
Balance Sheet Review
Appendices
Restructuring
21
Rebuilding trust and confidence of both depositors and investors
Preserving the Bank’s status as the cornerstone of the domestic economy, continuing to support both businesses and households
Building a resilient institution, able to effectively manage its portfolio of assets and withstand further external shocks and economic turbulence
Smoothly integrating Laiki’s operations, maximising impact on profitability for the combined entity through the realisation of synergies
Enhance the capital adequacy of the Group by internally generating capital through profitability, deleveraging and disposal of non-core assets
Restructuring Plan defines actions to create a safer, smaller, more focused institution capable of supporting the recovery of the Cypriot economy
Restructuring Plan charts the future strategic direction
22
Cost to income ratio of Cyprus operations
Branch rationalisation – (branch numbers)
203 190 158 142 133 130 127
May
-13
Jun-
13
Sep-
13
Nov
-13
Dec
-13
Feb-
14
Dur
ing
2014
-36%
• Integration of ex-Laiki business on track
• Branch network in Cyprus reduced to 130 branches from 203 branches in May 2013; 3 branches expected to close during 2014.
• Next milestone for the integration process is the unification of the IT banking system (by end of the first half of 2014). This will facilitate the further utilisation of synergies and cost minimisation
• Staff costs reduced through salary cuts and a
Voluntary Retirement Scheme (VRS). FT Employee reduction by 24% and staff costs by 35% on an annual basis
• Cost to income ratio of the Cyprus operations at 38% for FY2013
• Changes in organisational structure for simplification and for organising along functional, domestic, international and restructuring lines
• Establishment of Restructuring and Recovery Division to focus management on collections and recovery efforts
Restructuring of Cypriot operations
50%
43% 38%
1H2013* 9M2013 FY2013
* Information for 1Q2013 and 2Q2013 is not available as it has not been possible to publish the financial results for the three months ended 31 March 2013.
23
New organisational structure
INTERNATIONALDOMESTIC CORERESTRUCTURINGFUNCTIONS
REMUNERATION & HUMAN RESOURCES
COMMITTEEBOARD OF DIRECTORS
NOMINATIONS & CORPORATE GOVERNANCE
COMMITTEE
RISK COMMITTEE
AUDIT COMMITTEE
STRATEGY & RESTRUCTURING
COMMITTEE
DIRECTORINTERNAL
AUDIT
DIRECTOR OF COMPLIANCE GROUP CHIEF EXECUTIVE ASSET & LIABILITY
COMMITTEE
EXECUTIVECOMMITTEE
Director InternationalOperations
Head ofRestructuring& Recoveries
Director Consumer
& SMEBanking
DirectorCorporateBanking
Insurance
DirectorInternational
Banking Services
Director Wealth,
Asset Mgt & Brokerage
Chief Operating
Officer
Chief Risk
OfficerHR DirectorFinance
Director
STRUCTURE CHART – BANK OF CYPRUS GROUP
24
• Most significant change is the establishment of a strong restructuring and recovery area. The Bank had a fragmented approach to the management of stressed, distressed and delinquent clients
• A structure that houses these clients under one umbrella unit, creating a centralized arrears management area that allows the Bank to manage clients in a much more robust, focused and logical manner
• The creation of the Restructuring and Recoveries Division (RRD) is a major step in the Bank’s recovery path, as swiftly and professionally addressing problem lending positions is absolutely critical
• The Special Project Division (as per the Restructuring Plan) has evolved into the Major Corporate Management Department and is now part of the RRD. Hence, the RRD handles all activity relating to (a) Exposures greater than €100 mn, (b) debt restructuring and (c) debt collection.
• This Division will become very much the high powered engine room of the recovery, driving down NPL levels within the Bank and removing provisions from its balance sheet.
• The RRD has developed end to end strategies and responsibility for managing delinquent customers in each business line. Delinquent portfolio segments based on risk profile and exposure and tailored strategies for collections and restructurings have been defined accordingly.
The establishment of a centralised arrears management unit is in line with the recently issued Directive on Arrears Management of 2013 issued by the Central Bank of Cyprus. The Directive includes inter alia a Code of Conduct on the handling of borrowers in financial difficulties, the development of a robust arrears management strategy, the utilisation of relevant, effective and sustainable debt restructuring techniques and options.
Division handles delinquent customers in all sectors
Effective NPL recovery and management is vital for the Bank’s future
Creation of Restructuring and Recoveries Division (RRD)
25
Managing loan quality deterioration – Recovery of NPLs
Integrating Laiki Bank – Achieving operational efficiencies
Enhance capital position while making progress on non-core disposals
Managing liquidity – Defending deposit franchise – Regaining trust
Exogenous factors such as the failure to implement the policy reforms requested by Troika that could affect and/or delay the disbursement of the financial assistance to Cyprus, a deeper and prolonged economic recession, further significant increase in unemployment, a sharper reduction in real estate prices, as well as factors that could dent the fragile confidence of customers and delay the return of confidence to the Cyprus banking system could derail and affect the execution of the Restructuring Plan
Main Challenges
26
Key information and contact details Credit Ratings:
Fitch Ratings: Long-term Issuer Default Rating: affirmed at “Restricted Default” on 5 March 2014 Short-term Issuer Default Rating: affirmed at “Restricted Default” on 5 March 2014 Viability Rating: upgraded to “cc” from “f” on 5 March 2014
Moody’s Investors Service: Long-term deposit ratings: Affirmed at Ca, outlook changed to positive from negative on 26 March 2014 Senior unsecured debt ratings: Upgraded to (P)Ca, no outlook, from (P)C on 26 March 2014 Short-term deposit and commercial paper ratings: Affirmed at Not Prime, no outlook Standalone BFSR: Affirmed at E, no outlook, equivalent to a BCA of ca Listing: ATHEX – BOC, CSE – BOCY, ISIN CY0000100111 Since 19 March 2013, the shares of the Bank have been suspended from trading on ATHEX and CSE
Constantinos Pittalis, Investor Relations Manager, Tel: +35722122466, Email: [email protected] Irene Constantinou, Investor Relations, Tel: +35722122121, Email: [email protected] Elena Hadjikyriacou, Investor Relations, Tel: +35722122239, Email: [email protected]
Investor Relations Contacts
Group Finance Director Dr. Chris Patsalides, Tel: +35722122456, Email: [email protected]
www.bankofcyprus.com
Chief Financial Officer Eliza Livadiotou, Tel: +35722122344, Email: [email protected]
27
Appendices
Financial Results FY2013 – Highlights
Income Statement Review
Restructuring
Balance Sheet Review
Appendices
28
Group Income Statement (€ mn) FY2013 FY2012 yoy % 4Q2013 3Q2013 qoq%
Net interest income 999 702 +42% 274 296 -8%
Net fee & commission income 169 173 -2% 43 41 +6%
Net foreign exchange income and gains/(losses) from financial instruments 5 (3) - 23 9 +169%
Insurance income net of insurance claims 65 63 +3% 14 12 +19%
Other (expenses)/income (64) (15) +326% (40) 3 -
Total income 1.174 920 +28% 314 361 -13%
Staff costs (322) (294) +10% (66) (83) -21%
Other operating expenses (230) (251) -8% (64) (54) +18%
Total expenses (552) (545) +2% (130) (137) -5%
Profit before impairments, restructuring costs and discontinued operations 622 375 +66% 184 224 -18%
Provisions for impairment of loans and advances (1.067) (1.339) -20% (268) (261) +3%
Share of profit/(loss) from associates 2 - - - (1) -
Loss before tax, restructuring costs and discontinued operations (443) (964) -54% (84) (38) +122%
Tax 5 43 - 2 1 -
Loss attributable to non-controlling interests 12 9 - 5 2 -
Loss after tax and before restructuring costs and discontinued operations (426) (912) -53% (77) (35) +118%
Restructuring costs (168) (10) - (26) (107) -
Loss from discontinued operations (90) (789) - - - -
Loss on disposal of the Greek operations (1.366) - - - - -
Impairment of GGBs and impairment of goodwill - (503) - - - -
Loss after tax (2.050) (2.214) -7% (103) (142) -28%
29
€ mn % yoy 31.12.13 31.12.12
Cash and balances with Central Banks -3% 1.240 1.272
Placements with banks -27% 1.290 1.769
Debt securities, Treasury bills and equity investments
+89% 3.532 1.870
Net loans and advances to customers -11% 21.764 24.375
Other assets +44% 2.516 1.746
Total assets -2% 30.342 31.032
€ mn % yoy 31.12.13 31.12.12
Amounts due to banks -42% 196 341
Funding from Central Banks - 10.956 -
Repurchase agreements -2% 594 608
Customer deposits -47% 14.971 28.442
Debt securities in issue -98% 1 45
Other liabilities -21% 889 1.128
Subordinated loan stock -96% 5 133
Total liabilities -10% 27.612 30.697
Share capital +161% 4.684 1.795
Shares subject to interim orders - 59 -
Share premium - - 428
CECS* - - 429
Revaluation and other reserves - 65 106
Accumulated losses - (2.152) (2.500)
Shareholders’ equity +929% 2.656 258
Non controlling interests -4% 74 77
Total equity +714% 2.730 335
Total liabilities and equity -2% 30.342 31.032 *Convertible Enhanced Capital Securities
Consolidated Balance Sheet
30
Loans and Deposits by Geography Gross Loans by Geography
€ mn 30.06.13 30.09.13 31.12.13
Cyprus 23.992 23.312 22.964
UK 1.459 1.383 1.284
Russia 1.794 1.620 1.429
Other countries* 1.104 1.087 1.066
Group 28.349 27.402 26.743
As % of Group
Cyprus 84,6% 85,1% 85,9%
UK 5,1% 5,0% 4,8%
Russia 6,3% 5,9% 5,3%
Other countries* 4,0% 4,0% 4,0%
Deposits by Geography
€ mn
30.06.13 30.09.13 31.12.13
Cyprus non-IBU 9.665 8.948 8.658
Cyprus IBU 4.752 4.054 4.047
Cyprus – Total 14.417 13.002 12.706
UK 1.295 1.285 1.244
Russia 1.153 1.078 918
Other countries* 105 103 103
Group 16.970 15.468 14.971
As % of Group
Cyprus non-IBU 57,0% 57,8% 57,8%
Cyprus IBU 28,0% 26,3% 27,1%
Cyprus – Total 85,0% 84,1% 84,9%
UK 7,6% 8,2% 8,3%
Russia 6,8% 7,0% 6,1%
Other countries** 0,6% 0,7% 0,7%
* Other countries: Greece, Romania and Ukraine
31
23,99 23,31 22,96
1,46 1,38 1,28 1,79 1,62 1,43
1,11 1,09 1,07
28,35 27,40 26,74
30.06.13 30.09.13 31.12.13
Other countries*RussiaUKCyprus
Total (€ bn)
*Other countries: Greece, Romania and Ukraine
Total (€ bn)
Gross loans by geography
Gross loans by customer type
Analysis of Gross Loans by Geography and Customer Type
13,10 12,51 12,24
6,37 6,24 6,12
5,44 5,30 5,37 3,44 3,35 3,01
28,35 27,40 26,74
30.06.13 30.09.13 31.12.13
Consumer CreditHousingSMEsCorporate
32
Total (€ bn)
* Other countries: Romania and Ukraine
Total (€ bn)
Deposits by geography
Deposits by type of deposit
12,72 11,27 10,55
0,83 0,88 0,93
3,42 3,32 3,49
16,97 15,47 14,97
30.06.13 30.09.13 31.12.13
Current & demand accountsSavings accountsTime deposits
Analysis of Deposits by Geography and by Type
9,67 8,95 8,66
4,75 4,05 4,05
1,30 1,29 1,24
1,15 1,08 0,92 0,1
0,1 0,1
16,97 15,47 14,97
30.06.13 30.09.13 31.12.13
Other countries*RussiaUKCyprus IBUCyprus non-IBU
33
Cyprus: Summary income statement and key indicators
b.p. = basis points, p.p. = percentage points ; 100 b.p. = 1 p.p.
(€ mn) FY2013 FY2012 yoy (%) 4Q2013 3Q2013 qoq (%)
Net interest income 834 514 +62% 240 254 -6%
Net fee & commission income 132 133 -1% 35 31 +12%
Net foreign exchange income and gains/(losses) from financial instruments 21 (13) -264% 36 11 +249%
Insurance income net of insurance claims 57 53 +7% 12 11 +22%
Other (expenses)/income (19) - - (17) 3 -
Total income 1.025 687 +49% 306 310 -1%
Staff costs (247) (205) +21% (48) (66) -27%
Other operating expenses (147) (172) -15% (38) (38) +2%
Total expenses (394) (377) +5% (86) (104) -16%
Profit before provisions 631 310 +104% 220 206 +7%
Provisions for impairment of loans and advances (856) (1.186) -28% (159) (240) -34%
Share of profit/(loss) from associates 2 - - (1) (0) -
(Loss)/profit before tax (223) (876) -75% 60 (34) +278%
Tax 3 43 - - (1) -
Loss/(profit) attributable to non-controlling interests 1 2 - (1) 0 -
(Loss)/profit after tax and before restructuring costs and discontinued operations (219) (831) -74% 59 (35) +270%
Cost to income ratio 38% 55% -17 p.p. 28% 33% -5 p.p.
34
10,32 9,92 9,88
5,35 5,28 5,20
5,33 5,20 5,28 2,99 2,91 2,60
23,99 23,31 22,96
30.06.13 30.09.13 31.12.13
Consumer CreditHousingSMEsCorporate
Cyprus Loans by customer type (€ bn)
Loans and Deposits in Cyprus
9,67 8,95 8,66
4,75 4,05 4,05
14,42 13,00 12,71
30.06.13 30.09.13 31.12.13
IBUs
Non-IBUs
Cyprus Deposits (€ bn)
35
(€ mn) FY2013 FY2012 yoy (%) 4Q2013 3Q2013 qoq (%)
Net interest income 97 120 -19% 22 23 -6%
Net fee & commission income 28 33 -16% 7 7 -3%
Net foreign exchange income and gains/(losses) from financial instruments 4 6 -33% 0 1 -
Other income/(expenses) - 1 - (1) 0 -
Total income 129 160 -20% 28 31 -13%
Staff costs (51) (62) -17% (12) (11) -1%
Other operating expenses (50) (52) -5% (14) (11) +30%
Total expenses (101) (114) -11% (26) (22) +14%
Profit before provisions 28 46 -41% 2 9 -83%
Provisions for impairment of loans and advances (79) (89) -11% (27) (17) +62%
Loss before tax (51) (43) +21% (25) (8) +216%
Tax 7 1 - 2 1 -
Loss attributable to non-controlling interest 11 7 - 6 1 -
Loss after tax and before restructuring costs and discontinued operations (33) (35) -4% (17) (6) +234%
Cost to income ratio 79% 71% +8 p.p. 95% 73% +22 p.p.
b.p. = basis points, p.p. = percentage points ; 100 b.p. = 1 p.p.
Russia: Summary income statement and key indicators
36
1,89 2,00
2,02 1,79 1,62
1,43
31.12.10 31.12.11 31.12.12 30.06.13 30.09.13 31.12.13
Loans by sector
Corporate 54%
SMEs 18%
Mortgages 3%
Consumer Credit 25%
Russian Loans (€ bn)
Russian Deposits (€ bn)
1,12 1,29 1,25 1,15 1,08 0,92
31.12.10 31.12.11 31.12.12 30.06.13 30.09.13 31.12.13
Russian operations
37
(€ mn) FY2013 FY2012 yoy (%) 4Q2013 3Q2013 qoq (%)
Net interest income 29 22 +30% 5 10 -54%
Net fee & commission income 5 4 +8% 1 1 -27%
Net foreign exchange income and gains/(losses) from financial instruments 1 2 -68% (2) 2 -
Other income 0 0 - (0) 0 -
Total income 35 28 +20% 4 13 -74%
Staff costs (10) (10) - (3) (3) -11%
Other operating expenses (14) (9) +47% (2) (3) -34%
Total expenses (24) (19) +22% (5) (6) -23%
Profit before provisions 11 9 +16% (1) 7 -112%
Provisions for impairment of loans and advances (21) (12) +70% (5) 1 -698%
(Loss)/profit before tax (10) (3) +213% (6) 8 -167%
Tax (1) 1 - (0) 0 -
Loss after tax and before restructuring costs and discontinued operations (11) (2) +442% (6) 8 -174%
Cost to income ratio 69% 68% +1 p.p. 127% 43% +84 p.p.
b.p. = basis points, p.p. = percentage points ; 100 b.p. = 1 p.p.
UK: Summary income statement and key indicators
38
1,08 1,04 0,83 0,74 0,73 0,72
0,72 0,65 0,56 1,08 1,04
0,83
1,46 1,38 1,28
31.12.10 31.12.11 31.12.12 30.06.13 30.09.13 31.12.13
Loans by sector
Corporate 52%
SMEs 44%
Mortgages 2%
Consumer Credit
2%
UK Loans (€ bn)
UK Deposits (€ bn)
1,26
1,21 1,21
1,30 1,29
1,24
31.12.10 31.12.11 31.12.12 30.06.13 30.09.13 31.12.13
UK operations
ex-Laiki UK loans
39
(€ mn) FY2013 FY2012 yoy (%) 4Q2013 3Q2013 qoq (%)
Net interest income 39 46 -12% 7 8 -9%
Net fee & commission income 4 3 +54% 1 2 -53%
Net foreign exchange income and gains/(losses) from financial instruments (21) 2 - (11) (5) -
Insurance income net of insurance claims 8 10 -20% 1 1 -
Other expenses (45) (16) +197% (23) 0 -
Total income (15) 45 -134% (25) 6 -517%
Staff costs (14) (17) -28% (3) (3) 1%
Other operating expenses (19) (18) +16% (9) (2) +233%
Total expenses (33) (35) -7% (12) (5) +119%
Profit before provisions (48) 10 -608% (37) 1 -
Provisions for impairment of loans and advances (111) (52) +114% (77) (5) -
Share of profit from associates - - - 1 (0) -
Loss before tax (159) (42) +275% (113) (4) -
Tax (4) (1) - 0 1 -
Loss after tax and before restructuring costs and discontinued operations (163) (43) - (113) (3) -
Other countries*: Summary income statement
* Other countries: Romania, Ukraine, Greece
40
90+ DPD by Geography
90+ DPD by Geography (€ bn)
40,3
%
49,3
%
49,9
%
25,6
%
28,9
%
31,7
%
12,6
%
20,2
%
24,8
%
62,5
%
68,9
%
71,4
%
30.06.13 30.09.13 31.12.13
Cyprus Russia UK Other countries*
90+ DPD ratios by Geography
* Other countries: Greece, Romania and Ukraine.
9,68 11,49 11,47
0,46
0,47 0,45 0,18
0,28 0,32 0,69
0,74 0,76 11,01
12,98 13,00
30.06.13 30.09.13 31.12.13
Cyprus Russia UK Other countries*
41
90+ DPD ratios by customer type
Gross loans by customer type (€ bn)
47,6% 40,9%
20,8%
30,1%
57,9% 52,2%
24,3%
35,7%
58,6% 54,5%
24,0%
39,9%
Corporate SMEs Housing Consumer Credit
30.06.13 30.09.13 31.12.13
13,10
6,37 5,44 3,44
12,51
6,24 5,30 3,35
12,24
6,12 5,37 3,01
Corporate SMEs Housing Consumer Credit
30.06.13 30.09.13 31.12.13
Analysis of loans and 90+ DPD ratios by customer type
42
90+ DPD ratios by economic activity
40,7
%
37,6
%
40,1
% 54
,8%
46,0
%
25,6
% 40
,8%
41,1
%
47,0
%
46,4
%
53,6
% 67
,8%
52,7
%
30,3
%
52,3
%
56,1
%
44,1
%
49,7
%
51,1
% 69
,6%
51,7
%
32,1
%
56,8
%
64,7
% 30.06.13 30.09.13 31.12.13
3,12
1,11
1,93
4,15
4,61
8,73
2,78
1,92
2,99
1,06
1,92
4,06
4,54
8,49
2,44
1,90
2,83
1,00
1,89
4,25
4,20
8,54
2,31
1,73
30.06.13 30.09.13 31.12.13
Trade Manufacturing Hotels & Restaurants
Construction Real estate Private Individuals
Professional & other services
Other sectors
Gross loans by economic activity (€ bn)
Trade Manufacturing Hotels & Restaurants
Construction Real estate Private Individuals
Professional & other services
Other sectors
Analysis of Loans and 90+ DPD ratios by economic activity