Bank of Cyprus: Preliminary Group Financial Results for the year ended 31 December 2020

Successful navigation through the pandemic with clear priorities

• Protection of staff and customer health, while ensuring operational resilience of the Bank

• c.€1.4 bn new lending to support the recovery of the Cypriot economy

• Payment holidays until end of 2020 to >25,000 customers (€5.9 bn)

Significant progress on balance sheet de-risking despite challenging environment

• €2.1 bn NPE reduction, pro forma for NPE sales; €1.5 bn NPE sales and €0.6 bn organic

• Gross NPE ratio reduced to 16% (7% net) and NPE coverage increased to 59%, both pro forma for NPE sales

• RWA intensity reduced to 53%, pro forma for NPE sales

Asset quality management throughout the pandemic

• Provision of support to impacted customers to alleviate short term cash flow burden

• Close monitoring of loans in moratoria

• Encouraging performance since the end of moratorium (31 December 2020); €3.6 bn had an instalment due by 15 February 2021, and 95% of those resumed payments

Careful cost management

• Total operating expenses (excl. special levy and contributions to SRF and DGF) in FY2020 down 12% yoy

• Cost to income ratio (excl. special levy and contributions to SRF and DGF) at 60% for FY2020, broadly flat yoy

• Digitally engaged customers increased to 75%, up 6 p.p. yoy

Launch of New Strategic Plan and Medium Term Targets

• Single digit NPE ratio by the end of 2022

• Return on Tangible Equity (ROTE) of c.7%

Positive Organic Performance in 4Q2020

• New lending of €374 mn in 4Q2020, up 30% qoq, reflecting early recovery post 1H2020 lockdown

• Total income of €142 mn up 3% qoq; Operating profit of €45 mn

• Cost of risk of 99 bps

• Organic profit after tax of €2 mn

• Exceptional items of €51 mn, including provisions / net loss relating to NPE sales (incl. restructuring expenses) of €42 mn

• Loss after tax of €49 mn for 4Q2020 and €171 mn for FY2020, post exceptional items

Operating Efficiency

• Total operating expenses (excluding special levy and contributions to SRF and DGF) of €91 mn for 4Q2020, up 7% qoq

• Cost to income ratio (excluding special levy and contributions to SRF and DGF) at 64% for 4Q2020

Good Capital, Strong Liquidity

• CET1 ratio of 15.2% and Total Capital ratio of 18.7%, on a transitional basis and pro forma for NPE sales

• Deposits at €16.5 bn, broadly flat yoy and qoq

• Significant surplus liquidity of €4.2 bn (LCR at 254%)

Significant Progress in Balance Sheet Repair

• €0.5 bn NPE sale (Helix 2 Portfolio B) signed in January 2021; €1.5 bn NPE sales since December 2019

• NPEs reduced by €2.1 bn to €1.8 bn (€0.7 bn net) in FY2020, pro forma for NPE sales

• Gross NPE ratio reduced to 16% (7% net) and coverage maintained at 59%, pro forma for NPE sales

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