#1Bank of Cyprus Group Group Financial Results for the quarter ended 31 March 2015 Two Years After Income Statement Review Balance Sheet Review Key Performance Indicators Key Takeaways Additional Information 29 May 2015 Bank of Cyprus 1 KOINO ΚΥΠΡΙ#21Q2015 Group Financial Results - Key Highlights Customer inflows continued during 2015; Loans to Deposits ratio improved to 138% from 141% at 31 December 2014 Emergency Liquidity Assistance (ELA) reduced to a current level of €6,4 bn from €11,4 bn at 30 April 2013; further reductions once market conditions normalise Appropriately capitalised with Common Equity Tier 1 capital (CET1) ratio at 13,9% Profit after tax from continuing operations €57 mn and Profit after tax €29 mn Further progress on loan quality stabilisation; 90+ DPD stabilised below €13 bn and provision coverage improved to 42%; Adoption of foreclosure/insolvency framework are significant steps in enabling the Bank to tackle its delinquent loans Appropriately capitalised, with stabilising deposit base and asset quality and improving core profitability Bank of Cyprus KOINO ΚΥΠΡΙ 2235 2#3Two Years After Income Statement Review Balance Sheet Review Key Performance Indicators Key Takeaways Additional Information Bank of Cyprus 3 KOINO WKYNРIW 2235#4(1,7) (3,8) (5,3) 12-2012 01-2013 02-2013 Two Years After: Cyprus economy on recovery path... GDP growth expected to be positive from 2015 faster recovery than other peripheral countries - GDP Growth (yoy) 2010 2011 2012 2013 2014 2015f 2016f 2017f I 1,2% 1,4% 0,3% 1,6% 2,0% 0,4% (2,4%) (2,3%) (2,3%) (5,4%) (3,4%) (3,9%) (8,7%) Real GDP growth - Actual Current projections (EC & IMF) Initial Projections (EC) Banking system deposits outflow arrested (€ bn) 0,2 (1,0) (1.4) (1,01,40,8 (0,200,100,200,10,560,2) 0,20,5 0,0 (0.4) (0,200,460,2) 0,0 0,3 0,4 0,3 (0,0) 03-2013 04-2013 05-2013 06-2013 3 07-2013 08-2013 09-2013 10-2013 11-2013 12-2013 01-2014 02-2014 03-2014 04-2014 05-2014 06-2014 07-2014 08-2014 09-2014 10-2014 11-2014 12-2014 01-2015 02-2015 (6,3) (1) Includes impact of bail-in of BoC - 37,5% of uninsured deposits (>100k) converted to equity (2) Includes impact of Laiki resolution - €3,9 bn (3) Includes impact of bail-in of BoC - additional 10% of uninsured deposits converted to equity (4) Seasonally and working day adjusted SOURCE: Statistical Service of Republic of Cyprus, European Commission, IMF and company reports, Bloomberg 03-2015 2Q2011 3Q2011 -0,4% 4Q2011 -0,8% 1Q2012 -1,2% 2Q2012 -2,4% 3Q2012 -2,3% 4Q2012 -3,7% 1Q2013 -5,3% 2Q2013 -6,0% 3Q2013 -5,5% 4Q2013 -4,7% 1Q2014 -3,2% 2Q2014 -1,8% 3Q2014 -2,1% 4Q2014 -1,8% 1Q2015 0,2% ● • According to initial estimates, an increase was recorded in real GDP for 1Q2015 after 14 quarters of consecutive decrease; GDP4 increased by 1,6% qoq and by 0,2% yoy Banking system recorded deposit inflows during 1Q2015; Capital controls fully. abolished in April 2015 Bank of Cyprus KOINO WKYNРIW 2235 4#5Yield 16% 14% 12% 10% 8% 6% 4% 2% 07-10 2020 Cyprus government bond Two Years After: ...supported by the Sovereign return to capital markets Improved rating and credit outlook as demonstrated by benchmark sovereign bond issue 09-10 11-10 01-11 03-11 05-11 07-11 09-11 11-11 01-12 03-12 05-12 07-12 09-12 11-12 01-13 03-13 05-13 07-13 09-13 11-13 01-14 03-14 05-14 07-14 09-14 11-14 01-15 03-15 05-15 Agency Rating Last action Outlook Rating date Previous rating Moody's B3 Upgrade Stable 14-Nov-14 Caa3 S&P B+ Affirmed Positive 27-Mar-15 B Fitch B- Affirmed Positive 24-Apr-15 B- Continued DBRS B (low) Affirmed Stable 5-Dec-14 CCC improvement General government debt / GDP (%) 200 180 160 140 120 100 6842 80 60 40 20 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Cyprus Spain Greece Portugal SOURCE: Bloomberg, BofA Merrill Lynch global research Italy Ireland . • Cyprus tapped international debt markets twice since bail-out by Troika. 1st issue of €750 mn in July 2014 and 2nd issue of €1 bn in May 2015 Both issues were oversubscribed by around two times, indicating significant increase in confidence towards the Cypriot economy; Important milestone for Cyprus' economic recovery Recently adopted Foreclosure and Insolvency framework is a significant step towards the positive conclusion of the 6th review of the country's economic adjustment program by Troika; Cyprus may benefit from QE Program of the ECB Bank of Cyprus 5 KOINO WKYпPIW#6Two Years After: BOC Group Bank appropriately capitalised Significant Balance Sheet deleveraging * ■CET1 ratio (transitional basis) Capital increase of €1 bn Total assets (€ bn) -19% 15,4% 14,0% 13,9% 33,0 10,5% 10,4% 11,3% 30,3 29,4 28,6 27,5 26,8 26,7 --1,9% 31.12.12 30.06.13 31.12.13 30.06.14 30.09.14 31.12.14 31.03.15 30.06.13 31.12.13 31.03.14 30.06.14 30.09.14 31.12.14 31.03.15 ELA funding reduced by €5,0 bn since peak 90+ DPD formation slowed down sharply ELA funding (€ bn) ECB funding (€bn) 11,40 11,11 11,16 10,96 10,91 1,30 1,40 1,40 In constant currencies 5.311 ■Change in 90+ DPD (€ mn) 10,18 1,40 8,60 8,28 2.723 7,70 0,92 7,16 11,40 11,11 0,88 1.329 1.399 0,80 945 9,86 9,56 9,51 0,76 8,78 7,68 7,40 6,90 6,40 136 -46 -350 Apr- Jun- Sep- Dec- Mar- Jun- Sep- 2013 2013 2013 2013 2014 2014 2014 Dec- Mar- 28 May 2014 2015 2015 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 1Q2015 1Q20151 * CET 1 ratio includes unaudited profits amounting to €15 mn for the quarter Bank of Cyprus 6 KOINO WKYпPIW 235#7Two Years After Income Statement Review Balance Sheet Review Key Performance Indicators Key Takeaways Additional Information Bank of Cyprus KOINO WKYNРIW 2235 7#8Income Statement Review 1Q2015 4Q2014 qoq change 1Q2014 % yoy change % Net interest income Other income Total income Total expenses 225 225 0% 248 -9% 47 56 -16% 61 -23% 272 281 -3% 309 -12% (102) (114) -11% (105) -3% Profit before provisions and other items 1 170 167 2% 204 -17% Provisions for impairment of customer loans (148) (248) -40% (130) +15% Gains on derecognition and changes in expected cash flows on acquired loans Impairments of other financial and non financial assets 43 29 +48% 8 (1) (57) -99% (0) Share of profit/(loss) from associates 3 -43% -14% Profit/(loss) before tax, restructuring costs and discontinued operations 66 (106) 84 -29% Tax (9) (1) (2) (Loss)/profit attributable to non-controlling interests (0) 0 Profit/(loss) after tax from continuing operations² 57 (107) 81 82 -37% Restructuring costs (7) (3) 102% (5) 79% Loss from disposal group held for sale/discontinued operations (21) (214) -90% (46) -55% Net loss on disposal of non-core assets (13) ■ Profit/(loss) after tax 29 (337) 31 -28% Net interest margin 3,94% 3,81% +13 bps 3,90% +4 bps Cost-to-Income ratio 38% 41% -3 p.p 34% +4 p.p 1. Profit before provisions and impairments, gains on derecognition and changes on expected cash flows on acquired loans, restructuring costs and discontinued operations. 2. Profit/(loss) after tax and before restructuring costs, discontinued operations and net profit on disposal of non-core assets b.p. basis points, p.p. = percentage points 100 b.p. = 1 p.p. Bank of Cyprus KOINO ΚΥΠΡΙ 8#9Net Interest Income and Net Interest Margin Net Interest Income (€ mn) and Net Interest Margin (bps) 390 Interest income from Laiki Recapitalisation bond Net interest income (other) NIM 423 394 382 381 263 248 231 225 44 43 26 26 225 25 205 219 205 199 200 1Q2014 2Q2014 3Q2014 4Q2014 1Q2015 Evolution of Yield of Loans, Cost of Deposits and Customer Spread in Cyprus operations * Jan-15 Feb-15 Mar-15 % 1Q2015 • 1Q2015 Group Net Interest Income (NII) at €225 mn; Group Net Interest Margin (NIM) at 3,94%, compared to 3,81% for 4Q2014 • • NII and NIM continue to reflect market conditions in Cyprus and the composition of the Group's funding, with Eurosystem funding accounting for 29% of assets as at 31 March 2015. Following CBC's decision to reduce the deposit interest rate cap ceiling from 3% to 2% above market rates, the Bank lowered its base rate lending rates in March 2015 by 1%, with lower lending rates expected to help economic activity Customer spread in Cyprus at 4,34% for 1Q2015 5,73% 5,92% 5,82% 5,45% 1,39% 1,45% 1,41% 1,31% 4,34% 4,47% 4,41% 4,14% III Yield on Loans Cost of Deposits Customer spread Bank of Cyprus KOINO WKYNРIW * It relates to all currencies 9#10Analysis of Non-interest income Analysis of Non Interest Income (€ mn) ■Net fee and commission income ■Insurance income net of insurance claims ■Net FX gains/(losses) & Net profits/(losses) on other financial instruments ■Other income/(expenses) 42 14% 61 12% 55 32 14% 37 37 50 13 13 10 6 6 0 1Q2014 2Q2014 -2 -13 3Q2014 37 13% 16% 56 47 i14 10 4Q2014 -5 43 55 12 1Q2015 % Net fee and commission income % Total income X Non interest income (€ mn) Recurring non- interest income . Non-interest income for 1Q2015 of €47 mn, compared to €56 mn for 4Q2014 • Net fee and commission income of €43 mn for 1Q2015 (about 16% of total income); First quarter fee . and commission income reflecting seasonality relating to annual charges for banking services provided • Recurring income from insurance business (average of about €12 mn for the last five quarters) reflecting the Group's leading position in the insurance business in Cyprus; • Average recurring income from fee and commission income and insurance income of about €51 mn per quarter Bank of Cyprus KOINO ΚΥΠΡΙ 235 10#11Total expenses Total expenses (€ mn) Other operating expenses Staff costs 114 105 104 103 102 56 47 45 44 43 58 59 59 58 59 1Q2014 2Q2014 3Q2014 4Q2014 1Q2015 Group Cost to Income Ratio 41% 39% 38% 34% 33% 1Q2014 2Q2014 3Q2014 4Q2014 1Q2015 • • Total expenses for 1Q2015 decreased to €102 mn from €114 mn for 4Q2014, mainly due to higher operating expenses in Cyprus for 4Q2014, due to advertising, regulatory and ECB Comprehensive Assessment related costs, listing costs, and other advisory fees. Staff costs for 1Q2015 at €59 mn broadly at the same level as for the previous quarters The cost-to-income ratio for 1Q2015 stands at 38% compared to 41% for the 4Q2014, partly due to increased other operating expenses during 4Q2014 Bank of Cyprus KOINO WKYNРIW 2235 11#12Group Income Statement Highlights Group Income Statement Highlights (€ mn) 204 214 160 167 170 -130 -115 -148 -173 -248 ■1Q2014 ■2Q2014 ■3Q2014 ■4Q2014 1Q2015 82 57 44 50 31 12 -107 -5 -337 Profit before provisions and other items * Provisions for impairment of Profit/(loss) after tax from continuing customer loans operations Profit/(loss) after tax 29 • Profit before impairments, restructuring costs and discontinued operations for 1Q2015 of €170 mn, compared to €167 mn for 4Q2014 Provisions for impairment of customer loans for 1Q2015 of €148 mn, compared to an average of €139 mn for the first three quarters of 2014 Profit after tax from continuing operations for 1Q2015 of €57 mn, compared to a loss of €107 mn for 4Q2014 • Profit after tax for 1Q2015 of €29 mn, compared to a loss of €337 mn for 4Q2014 * other items relate to impairments, gains on derecognition and changes in expected cash flows on acquired loans, restructuring costs and discontinued operations Bank of Cyprus KOINO WKYNРIW 2235 12#13Income Statement Highlights - Group vs Cyprus 1Q2015 Cyprus Vs Group performance (€ mn) • • 94% 263 272 211 225 14 97% 90% 101% % 149% % contribution of Cyprus operations 171 170 ■Cyprus operations 92 102 85 57 9 10 ■Rest of operations ■Group -1 -28 Net interest income Total income Total expenses Profit before provisions and other items** Profit/(loss) after tax from continuing operations* Profit before provisions and impairments for the Cyprus operations of €171 mn for 1Q2015, compared to a Group total of €170 mn for the same period Profit after tax from continuing operations* for the Cyprus operations of €85 mn for 1Q2015, compared to a Group profit of €57 mn for the same period Cyprus operations are the main engine for Group profitability *Profit after tax before restructuring costs, discontinued operations and net profit on disposal of non-core assets **other items relate to impairments, gains on derecognition and changes in expected cash flows on acquired loans, restructuring costs and discontinued operations Bank of Cyprus 13 KOINO WKYПPIW#14Cyprus operations: key driver of Group performance High NIM Cyprus operations - supported by high funding reliance on Eurosystem funding Lower Cost to Income ratio for Cyprus operations (bps) 423 377 372 384 379 386 354 314 50% 43% 38% FY2014: 385 FY2013: 353 35% 35% 31% 31% 33% 1H2013 3Q2013 4Q2013 1Q2014 2Q2014 3Q2014 4Q2014 1Q2015 1H2013 9M 2013 FY2013 1Q2014 1H2014 9M 2014 FY2014 1Q2015 Historical fee and commission income / total income for Cyprus operations Evolution of Cost of risk* for Cyprus operations 0,7 1,0 0,29 0,30 0,25 0,27 0,26 19% 13% 14% 12% 15% 12% 3,9% 16% 3,7% 3,7% 81% 87% 86% 88% 85% 88% 84% 2012 2013 Other income 1Q2014 2Q2014 3Q2014 4Q2014 1Q2015 Fee and commission income Total income (€ bn) 2,6% 1,9% 2,4% 2,2% 2,3% 1H2013 9M 2013 FY2013 1Q2014 1H2014 9M2014 FY2014 1Q2015 * Cost of risk for the Cyprus operations has been calculated as provisions for impairment of loans / average gross loans. Gross loans are before the deduction of the fair value adjustment on initial recognition relating to loans acquired from Laiki Bank. Bank of Cyprus 14 KOINO ΚΥΠΡΙ 2235#15Two Years After Income Statement Review Balance Sheet Review Key Performance Indicators Key Takeaways Additional Information Bank of Cyprus 15 KOINO WKYNРIW#16Balance Sheet* Deleverage - Shrinking to Strength Jun Dec Mar € mn 2013 2013 2014 Jun 2014 Sep 2014 Dec 2014 Mar Change Since 2015 Jun 2013 Cash & bank placements Investments Net Loans 3.012 2.530 2.105 1.973 2.417 2.908 2.748 -264 3.413 3.433 3.475 3.538 2.578 2.541 2.401 -1.012 23.769 21.764 21.234 20.063 19.794 18.632 18.731 -5.038 Other assets Total assets Customer deposits ECB funding 2.762 2.622 2.564 2.984 2.694 32.956 30.349 29.378 28.558 27.483 16.970 14.971 14.066 13.803 13.330 1.400 920 ELA 11.107 Interbank funding 983 790 1.400 1.400 9.556 9.506 8.785 802 7.684 753 707 Other liabilities 976 895 894 Total equity 2.920 2.737 2.759 Total liab. & equity 32.956 30.349 29.378 954 1.057 2.814 3.785 28.558 27.483 2.708 2.792 26.789 26.672 -6.284 13.169 13.611 -3.359 880 800 7.404 6.900 772 1.083 1.045 3.481 3.508 30 Net loans reduction driven by disposal of non-core assets and the ongoing deleveraging Deposit reduction less than reduction in net loans Overall €5,0 bn ELA -4.207 reduction as at today from 808 -175 peak 69 588 26.789 26.672 -6.284 -1.048 -971 -820 -1.075 -694 -117 Steady reduction of total assets Balance sheet deleverage qoq CET1 ratio n/a 10,4% 10,6% 11,3% 15,4% 14,0% 13,9% i (transitional basis) Leverage ratio 11,3x 11,1x 10,6x 10,1x 7,3x 7,7x 7,6x ■ (Assets/Equity) Consolidated Balance Sheet - ignoring classification as disposal group held for sale CET1 ratio and Leverage ratio strengthened by Share Capital Increase and deleverage Bank of Cyprus KOINO ΚΥΠΡΙ 16#17Funding Structure Analysis of Liabilities and Equity (€ bn) Loans to Deposits ratio Total equity ECB funding Other liabilities ■Customer deposits ELA Net loans (bn) Customer deposits (€ bn) Loans to deposits ratio (net) 151% 148% 148% 145% 140% 141% 138% 30,35 29,38 23,8 28,56 21,8 21,2 20,4 19,8 18,6 18,7 27,48 17,0 26,79 26,67 15,0 14,1 13,8 13,3 13,2 13,6 14,97 14,07 13,80 13,33 13,17 13,61 1,40 1,40 1,40 0,92 0,88 0,80 9,56 9,51 7,68 8,78 7,40 6,90 30.06.13 31.12.13 31.03.14 30.06.14 30.09.14 31.12.14 31.03.15 • Further progress in normalising the Bank's funding structure. At 31 March 2015, customer deposits and Eurosystem funding accounted for 51% and 29% of assets, respectively. Consistent improvement in the loans to deposits ratio. Loans to deposits ratio improved by 3% in 1Q2015 to 138%, the lowest level post-bail-in 1,76 • 1,86 1,85 1,68 1,64 1,77 3,79 2,74 2,76 2,81 3,48 3,51 31.12.13 31.03.14 30.06.14 30.09.14 31.12.14 31.03.15 Bank of Cyprus 17 KOINO ΚΥΠΡΙ 2235#18Eurosystem Funding Reliance Reducing Fast Continuous reduction of ELA and ECB funding with further potential going forward 11,40 11,16 10,96 10,91 37% 36% 36% 36% 31% -.31% 29% 27% 1,30 10,18 1,40 1,40 1,40 8,60 8,28 0,92 7,70 0,88 7,16 0,80 0,76 11,4 9,86 9,56 9,51 8,78 7,68 7,40 6,90 6,40 €5,0 bn reduction of ELA since peak * In light of challenging market conditions given recent developments in Greece and Russia, the Bank is maintaining an increased liquidity buffer. Once market conditions are normalised, the Bank will proceed with further ELA repayments. Apr-2013 Sep-2013 Dec-2013 Mar-2014 Jun-2014 Sep-2014 Dec-2014 Mar-2015 28-May-2015 ELA (€ bn) ECB funding (€ bn) Eurosystem Funding % Total Assets Bank of Cyprus KOINO WKYNРIW * Ratio of Eurosystem Funding % Total Assets for 28 May 2015 based on balance sheet as at 31 March 2015 18#19Customer Deposits Customer Deposits by Geography (€ mn ) Cyprus ■ UK Russia & Other countries* 14.971 14.066 13.803 1.022 1.244 13.330 13.611 13.169 832 1.249 863 1.252 798 1.289 550 1.305 614 1.357 12.705 11.985 11.688 11.243 11.314 11.640 31.12.13 31.03.14 30.06.14 30.09.14 31.12.14 31.03.15 Evolution of Customer deposits (€ mn) ■Group Cyprus 442 326 72 -297 -497 -720 -905 -1415 -1502 -161 -263297 -473445 3Q2013 4Q2013 1Q2014 2Q2014 3Q2014 4Q2014 1Q2015 Deposit market shares in Cyprus 35,2% 32,2% 30,8% Residents Non-Residents 28,4% 27,5% 27,2% 26,4% 26,7% 26,9% 27,2% 26,9% 25,6% 25,5% 24,6% 24,3% 23,7% 23,7% 23,9% 24,1% 24,2% 24,7% 24,6% Group customer deposits increased by €442 mn in 1Q2015. In constant exchange rates, Group customer deposits slightly decreased by €30 mn during 1Q2015, whereas customer deposits in Cyprus increased further by €32 mn Deposit market shares in Cyprus for Residents and non Residents stand at 24,6% and 26,9% respectively Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Oct-14 Nov-14 Dec-14 * Other countries comprise Ukraine (until March 2014), Romania and Greece. Including deposits of disposal groups held for sale/discontinued operations. Jan-15 Feb-15 Mar-15 Bank of Cyprus KOINO WKYNРIW 19#20Capital Position Evolution for CET1 ratio during 1Q20151 14,0% +0,7% CET1 ratio 31.12.14 (transitional) Profit before provisions -0,6% -0,1% -0,1% 13,9% Provisions Loss from discontinued operations RWA Change Capital Adequacy Ratios 31.03.14 ■30.06.14 ■30.09.14 31.12.14 31.03.15 15,4% 13,4% 14,0% 13,9% 11,3% 11,5% -0,5% 10,6% 10,8% CET1 ratio 31.03.15 (transitional) DTA "Clean" Fully Loaded CET1 ratio² (Dec-14) 25% 20% 15% BOC; 13,4% 10% 5% 0% Comprises 41 EU banks covered by Citigroup Research 1 Includes unaudited profits amounting to €15 mn for the quarter CET1 ratio 31.03.15 (fully loaded) 15,6% 14,2% 14,1% CET 1 ratio (transitional) Total capital ratio (transitional) CET1 ratio (transitional) at 13,9% at 31 March 20151 (compared to 14,0% at 31 December 2014), positively affected by the profit of the period, but negatively affected by the increase in risk weighted assets primarily due to fluctuations in foreign exchange rates. CET1 ratio (fully loaded) at 13,4% at 31 March 2015 The Group's capital position as at 31 March 2015 exceeds its Pillar I and Pillar II add-on capital requirements, providing a loss absorbing buffer to the Group. • 2 As per Citigroup Research, Clean Fully Loaded CET1 ratio excludes Deferred Tax Credits, AFS and Danish Compromise Estimated Impact. Bank of Cyprus 20 KOINO WKYNРIW#21Gross Loans Gross Loans by Geography (€ mn) ■Cyprus ■Russia ■ UK -15% Other countries** -6% 28.349 -2% -4% 26.743 -2% 1.268 26.263 -4% 1% 25.300 1.459 1.230 24.742 1.180 23.772 24.085 1.794 1.284 804 1.194 706 1.172 1.429 1.290 1.112 692 667 1.304 1.208 914 1.026 966 1.072 23.828 22.800 22.599 22.020 21.716 21.200 21.320 • • Gross Loans were increased by €313 mn in 1Q2015 primarily affected by fluctuations in exchange rates. In constant exchange rates gross loans were reduced by €87 mn in 1Q2015 Overall, a 15% reduction in Group gross loans since June 2013 Domestic loan book reduced by 11% since June 2013, reflecting primarily customers' efforts to deleverage by using their deposits to pay down debt 30.06.13 31.12.13 31.03.14 30.06.14 30.09.14 31.12.14 31.03.15 *Gross loans are reported before fair value adjustment on initial recognition relating to loans acquired from Laiki Bank (difference between the outstanding contractual amount and the fair value of loans acquired) amounting to €1.545 mn (compared to €1,566 bn at 31 December 2014), including loans of discontinued operations/disposal group held for sale. ** Other countries: Romania, Ukraine (until March 2014) and Greece. Furthermore, certain loans and advances in Romania are included, that previously were reported under Cyprus. Bank of Cyprus KOINO WKYNРIW 2235 21#22Credit Risk - Quality of Loan portfolio Problem Loans (€ bn) 90+ DPD ■NPLS (CBC definition) ■NPES (EBA definition) 7,69 6,66 15,05 14,44 14,58 14,74 12,9813,13 14,04 13,00 12,76 12,98 12,59 11,01 10,21 31.12.12 30.06.13 30.09.13 31.12.13 31.03.14 30.06.14 Group loan quality indicators 90+ DPD provision coverage 90+ DPD ratio 47,4% 48,6% 48,6% 49,8% 52,5% 53,2% 53,1% 38,8% 42% 37% 38% 39% 39% 38% 41% 42% 30.06.13 30.09.13 31.12.13 31.03.14 30.06.14 30.09.14 31.12.14 31.03.15 30.09.14 14,96 15,17 12,65 12,79 31.12.14 31.03.15 * 90+ DPD increased by €136 mn during 1Q2015 due to fluctuations in exchange rates. In constant currencies 90+ DPD decreased by €46 mn in 1Q2015. Non Performing Exposures (NPEs), as EBA definition, totalled €15,17 bn and accounted for 63% of gross loans 90+ DPD ratio at 53,1%; 90+ DPD provision coverage at 42%, compared to 41% as at 31 December 2014; Taking into account tangible collateral at fair value, 90+ DPD are fully covered * 90+ DPD are loans with a specific provision (i.e. impaired loans) and loans past-due for more than 90 days but not impaired Bank of Cyprus 22 KOINO WKYпPIW#23Credit Risk - Provisions Accumulated provisions Accumulated provisions (€ bn) Provisions % Gross loans 21,6% 22,2% 17,6% 18,6% 19,1% 19,3% 20,0% 16,2% 4,6 4,8 5,0 5,0 4,9 4,9 5,1 5,4 30.06.13 30.09.13 31.12.13 31.03.14 30.06.14 30.09.14 31.12.14 31.03.15 Cost of risk* Cost of Risk Cyprus Cost of Risk - Group 3,6% 2,8% 2,8% 2,7% 2,1% 2,4% 2,6% 2,2% 2,3% 1,9% 1Q2014 1H2014 9M 2014 FY2014 1Q2015 • Accumulated provisions increased to €5,4 bn or 22,2% of gross loans mainly. due to additional provisions for the Cypriot operations. • • Annualised cost of risk for the Group reduced to 2,1% for 1Q2015. compared to 3,6% for FY2014 Annualised cost of risk for Cyprus. significantly lower at 1,9%, compared to 3,6% for FY2014, with the elevated provisioning charge for 4Q2014 relating to the methodological alignments and changes in certain estimates, following the completion of the review of the AQR results * Calculated as the provisions for impairment of customer loans, including provisions of discontinued operations, (in total €171 mn), net of gains on derecognition and changes in expected cash flows on acquired loans (totalling €43 mn) over average gross loans Bank of Cyprus KOINO ΚΥΠΡΙ 23#24Credit Risk - 90+ DPD by Geography and by customer type Group 90+ DPD loans by geography (€ bn) 48,6% 48,6% 49,8% 52,5% 53,2% 90+DPD ratio 53,1% Group 90+ (% of total loans) 13,0 12,8 12,6 13,0 12,7 12,8 0,9 0,9 0,5 0,6 0,6 0,5 0,30,5 0,30,4 0,30,5 0,3 0,1 0,5 0,6 0,1 11,3 11,2 11,3 11,6 11,5 11,5 31.12.13 31.03.14 ■Cyprus 30.06.14 ■ UK 30.09.14 ■Russia 31.12.14 Other countries* 31.03.15 Group 90+ DPD loans by customer type (€ bn) 13,0 12,8 12,6 13,0 12,7 12,8 1,3 1,3 1,2 1,3 1,2 1,2 1,2 1,2 1,1 1,1 3,3 3,4 3,5 3,1 3,3 "。 1,2 1,3 3,1 7,2 6,9 7,0 7,1 7,2 7,2 31.12.13 31.03.14 ■Corporate 30.06.14 ■SMES 30.09.14 ■Retail other 31.12.14 31.03.15 ■Retail housing * Other countries include certain loans and advances in Romania that were previously reported under Cyprus DPD have stabilised below €13 bn 90+ DPD in Cyprus have stabilised at around €11,5 bn Adoption of foreclosure legislation and insolvency framework are significant steps in enabling the Bank to tackle its delinquent loans in Cyprus and to improve asset quality. Bank of Cyprus 24 KOINO WKYNРIW 2235#25Credit Risk by customer type - 90+ DPD fully covered by provisions & tangible collateral 31 March 2015 Corporate SMES Retail Housing Retail Other Cyprus 47% 21% 21% 11% 100% 21,3 Gross loans (€ bn) 10,1 4,5 4,4 2,3 61,2% 66,5% 54,1% 90+ DPD loans 49,5% 27,3% by segment Loan Loss Reserve (LLR) 51,7% 42,0% 31,2% 26,1% 38,5% coverage Tangible 71,2% 75,7% 80,8% 52,5% 71,5% coverage 113,2% 106,9% 106,9% 104,2% 110,0% Total coverage Significant provision and collateral coverage, with additional comfort from personal guarantees XX % of total gross loans (Cyprus only) Bank of Cyprus 25 KOINO WKYПPIW#26Rescheduled Loans Rescheduled Loans by customer type (€ bn) Rescheduled Loans Retail housing ■ Retail consumer ■SMES Corporate (€ mn) Dec-14 Mar-15 8,06 7,66 Loans with no arrears 2.788 2.907 1,49 1,41 0,52 0,50 Loans with arrears but not impaired 1.806 1.887 1,59 1,57 Impaired Loans 3.062 3.268 4,18 31.12.14 4,46 Total 31.03.15 Rescheduled loans % gross loans 1 by customer type . Corporate ■SMES ■Retail housing ■Retail Consumer 39% 34% 33% 22% 31.12.14 41% 35% 35% 22% 31.03.15 7.656 8.062 Group rescheduled loans totalled to €8,06 bn at 31 March 2015 compared with €7,66 bn at 31 December 2014 Around 36% of rescheduled loans have no arrears post rescheduling Higher rescheduling activity observed. in corporate sector (41% as at 31 March 2015) followed by Retail housing and SMEs sectors (35% each as at 31 March 2015) 1 Before fair value adjustment on initial recognition relating to loans acquired from Laiki Bank (difference between the outstanding contractual amount and the fair value of loans acquired) amounting to €1.545 mn for gross loans and to €689 mn for rescheduled loans (compared to €1.566 mn and €658 mn respectively at 31 December 2014), including loans of discontinued operations/disposal group held for sale. Bank of Cyprus KOINO WKYNРIW 2235 26#27Restructuring and Recoveries Division Good progress has been made with Restructuring efforts of top exposures¹ € bn €5,8 bn €5,3 bn €5,0 bn €4,7 bn 1,0 0,9 RRD set up and assumption of exposures 30.11.13 1,2 1,3 0,5 1,7 8:3 30.09.14 2,2 2,1 0 0,8 0,3 000 0,5 8 352 0,2 31.12.14 Restructuring implemented or be signed ■Detailed non binding heads of terms for restructuring agreed ■Good progress in agreeing heads of terms for restructuring; some commercial points still open ■Diligence ongoing; Some way to go before heads of terms to be agreed Insolvency appointment 0,4 0,5 0,5 0,2 Other recovery cases 31.03.15 • Aggregate of top exposures being reduced mainly due to: • • • Disposal of loans/assets (about 56%) Loans that have been restructured and are being transferred back to business lines (about 17%) Repayments/cancellation of undrawn facilites (about 27%) Currently, about €0,9 bn of restructured loans are managed and monitored by RRD and will be transferred to business lines upon satisfactory performance 1 funded and unfunded exposures Bank of Cyprus KOINO WKYNРIW 27#28Adoption of Foreclosure Law and Insolvency framework Adoption removes the uncertainty of previous months, but implementation risks remains Foreclosure Law Key challenges & issues • New process for private auctions that will be controlled by the Creditor Provides for the conduction of private auctions and sales of mortgaged property by Creditors, without the involvement of governmental bodies New process expected to shorten significantly the time frame for foreclosing property The Bank is assessing the various provisions and expect to be using selectively the new enforcement procedures Insolvency framework . Objective is to introduce a proper insolvency regime for both individuals and legal entities in Cyprus The aim of the law is the modernization of the existing bankruptcy procedures that will enable bankrupt debtors to reactivate their economic activity after three years following bankruptcy Appointment of Insolvency Practitioners • examine and agree (upon meeting certain criteria) the repayment of Creditors and maintaining, to the extent possible, the primary residence Consensual or Non Consensual Personal Repayment Schemes The Bank is assessing the various provisions of the law, i.e. enforcement rights to guarantors Untested process Courts not adequately resourced Lack of experience in court procedures Managing reputational implications Implementation of the various provisions of the law Bank of Cyprus KOINO ΚΥΠΡΙ 2235 28#29Overseas non-core operations Disposing of overseas operations considered as non-core • . As part of its deleveraging strategy, and through specific, deliberate and well-timed actions, the Bank continues to reduce its risk profile, to enhance its liquidity position and to improve its capital position through the disposal of operations that are considered as non-core. Post 31 March 2015 the Bank disposed of its investment in Marfin Diversified Strategy Fund Plc The non-core overseas operations as at 31 March 2015 are as follows: Greece: The net exposure comprised (a) net on-balance sheet exposures (excluding foreclosed properties) totalling €76 mn (compared to €97 mn at 31 December 2014), (b) 619 foreclosed properties with a book value of €200 mn (compared to about 600 foreclosed properties with a book value of €179 mn at 31 December 2014), and (c) off-balance sheet exposures totalling €154 mn (compared to €185 mn at 31 December 2014). ➤ Romania: The overall net exposure is €439 mn (compared to €520 mn at 31 December 2014). Russia: The overall net exposure is €121 mn (compared to €130 mn at 31 December 2014). As from 4Q2014 the Group's operations in Russia are treated as a disposal group held for sale and results have been presented accordingly as discontinued operations. 1 In addition to the above, in the normal course of business in Cyprus, the Bank has lending exposures to Greek entities amounting to €89 mn Bank of Cyprus KOINO WKYNРIW 29#30Two Years After Income Statement Review Balance Sheet Review Key Performance Indicators Key Takeaways Additional Information Bank of Cyprus 30 KOINO WKYNРIW 2235#31Significant progress made on Group KPIs, with a clear plan of action to achieve medium-term targets Medium- Key Group Group Cyprus Category performance indicators Dec- Mar- Mar- 2014 2015 2015 term target (2017) * 1. Reverse 90+ DPD 41% 42% 38% 40%-50% coverage Asset quality Provisioning charge 3,6% ** 2,1% ** 2,3% <1,0% Key Pillars & Plan of action trend on overdue loans 2. Normalise funding; Eliminate ELA 3. Focus on • Continue restructuring, capitalising on the foreclosure law • • Seek FDI to enhance business viability Re-cycle restructured loans into the lending business for continued support and service Boost deposits by leveraging on stronger capital position Access Debt Capital Markets on the back of improved ratings, stronger financial soundness and better prospects Proceeds from exiting non-core overseas activities Direct lending into promising sectors with a view to funding the recovery of the Cypriot economy Further diversify income stream by boosting fee income from new sources in international business and wealth Eurosystem Funding funding % total 31% 29% n.a. <25% balance sheet Basel 3 Capital transitional 14,0% 13,9% n.a. >12% core markets in Cyprus CET1 Net interest 3,9% 3,9% 3,9% ~3,25% margin Fee and Margins and efficiency commission 13% 16% 16% Increase income/total income 4. Achieve a lean operating model ° Set-out a digital vision and introduce appropriate technology to enhance product distribution channels Introduce technology and processes to reduce operating costs • Introduce HR policies aimed at enhancing productivity 5. Deliver returns Cost to income ratio 36% 38% 35% 40%-45% • Strengthen governance and risk management to deliver appropriate medium-term risk-adjusted returns * Medium term target refers to the targets set as per the latest NDR presentation (available on the Group's website). ** Calculated as the provisions for impairment of customer loans, including provisions of discontinued operations, (in total €171 mn), net of gains on derecognition and changes in expected cash flows on acquired loans (totalling €43 mn) over average gross loans Bank of Cyprus 31 KOINO WKYПPIW 237#32Two Years After Income Statement Review Balance Sheet Review Key Performance Indicators Key Takeaways Additional Information Bank of Cyprus KOINO WKYNРIW 32#33Key Takeaways ➤ Leading financial institution in an economy that is on the road to economic recovery CET1 ratio at 13,9% (transitional basis); capital position shields the Group from further shocks and helps in regaining trust of counterparties ➤ Stabilising deposit base, with two consecutive quarterly increases in deposits in Cyprus. since bail-in; Loans-to-deposits ratio improved to 138% ELA reduced to €6,4 bn through deleveraging actions, capital proceeds and customer inflows RRD's efforts are yielding results, with loan quality showing further signs of stabilisation; 90+ DPD stabilised below €13 bn, with 90+ DPD provisioning coverage improving to 42% Foreclosure and insolvency framework allow the effective management of problem loans Recurring profitability stabilising, with profit before provisions at €170 mn and profit after tax from continuing operations at €57 mn Bank of Cyprus KOINO WKYNРIW 2235 33#34Two Years After Income Statement Review Balance Sheet Review Key Performance Indicators Key Takeaways Additional Information Bank of Cyprus 34 KOINO WKYNРIW 2235#35Key Information and Contact Details Credit Ratings: Fitch Ratings: Long-term Issuer Default Rating: upgraded to "CCC" on 28 April 2015 Short-term Issuer Default Rating: affirmed at "C" on 28 April 2015 Viability Rating: upgraded to “ccc" on 28 April 2015 Moody's Investors Service: Baseline Credit Assessment: Affirmed at caa3 on 28 May 2015 (stable outlook) Short-term deposit ratings: Affirmed at "Not Prime" on 17 November 2014 Long-term deposit ratings: Affirmed at Caa3 on 28 May 2015 (stable outlook) Counterparty Risk Assessment: Assigned at Caa2(cr) / Not-Prime (cr) on 28 May 2015 Listing: ATHEX-BOC, CSE - BOCY, ISIN CY0104810110 Contacts Investor Relations Tel: +35722122239, Email: [email protected] Constantinos Pittalis, Investor Relations Manager, Tel: +35722122466, Email: [email protected] Annita Pavlou, ([email protected] ) Elena Hadjikyriacou, ([email protected]) Marina loannou, ([email protected]) Styliani Nicolaou, ([email protected]) Chief Financial Officer Eliza Livadiotou, Tel: +35722122344, Email: [email protected] Finance Director Dr. Chris Patsalides, Tel: +35722122456, Email: [email protected] Visit our website at: www.bankofcyprus.com Bank of Cyprus KOINO WKYNРIW 35#36Consolidated Balance Sheet € mn % 31.03.15 31.12.14 € mn % 31.03.15 31.12.14 change change Cash and balances with Amounts due to banks +10% 178 162 -13% 987 1.139 Central Banks Funding from Central Banks -7% 7.703 8.284 Placements with banks -2% 1.614 1.647 Repurchase agreements +3% 595 580 Debt securities, treasury bills Customer deposits +3% 13.002 12.624 -6% 2.400 2.541 and equity investments Debt securities in issue +2% 1 1 Net loans and advances to 0% 18.258 18.168 Other liabilities -4% 1.004 1.046 customers Subordinated loan stock Other assets +3% 2.456 2.378 Non current assets and disposal groups classified as +4% 957 916 Non current liabilities and disposal groups classified as held for sale +11% 681 611 held for sale Total liabilities -1% 23.164 23.308 Total assets 0% 26.672 26.789 Share capital 0% 892 892 Note: Capital reduction reserve and share 0% 2.506 2.505 As from the fourth quarter of 2014, the Group's operations in Russia are treated as a disposal group held for sale and results have been presented accordingly as discontinued operations in accordance with IFRSS. premium Revaluation and other reserves +8% 159 147 Accumulated losses +31% (55) (79) Shareholders' equity +1% 3.502 3.465 Non controlling interests -61% 6 16 Total equity +1% 3.508 3.481 Total liabilities and equity 0% 26.672 26.789 Bank of Cyprus 36 KOINO WKYNРIW#37Consolidated Income Statement € mn Net interest income 1Q2015 4Q2014 3Q2014 2Q2014 1Q2014 225 225 231 263 248 Net fee and commission income 43 37 37 37 42 Net foreign exchange gains/(losses) and net profits/(losses) on other financial instruments (4) 14 (13) (1) 6 Insurance income net of insurance claims 12 10 10 13 13 Other income/(expenses) (4) (5) (2) 6 0 Total income 272 281 263 318 309 Staff costs (59) (58) (59) (59) (58) Other operating expenses (43) (56) (44) (45) (47) Total expenses (102) (114) (103) (104) (105) ■ Profit before provisions and impairments, gains on derecognition and changes in expected cash flows on acquired loans, restructuring costs and discontinued operations 170 167 160 214 204 Provisions for impairment of customer loans (148) (248) (115) (173) (130) Gains on derecognition and changes in expected cash flows on acquired loans 43 29 6 4 8 Impairments of other financial and non-financial assets (1) (57) 1 (33) (0) Share of profit/ (loss) from associates and joint ventures 2 3 2 2 Profit/(loss) before tax, restructuring costs and discontinued operations 66 (106) 50 14 84 Tax (9) (1) (6) (2) (Loss)/profit attributable to non-controlling interests (0) 0 (0) (0) ■ Profit /(loss) after tax and before restructuring costs, discontinued operations and net profit on disposal of non-core assets 57 (107) 44 12 82 1 I Restructuring costs (3) 12 16) (5) Loss from disposal group held for sale / discontinued operations (21) (214) (37) (6) (46) Net gain (loss) on disposal of non-core assets Profit/(Loss) after tax (13) 60 29 (337) (5) 50 311 As from the fourth quarter of 2014, the Group's operations in Russia are treated as a disposal group held for sale and results have been presented accordingly as discontinued operations in accordance with IFRS. Hence comparatives for the earlier financial quarters of 2014 and FY2013 have been re-presented. In order to better reflect its operating results, the Group changed its presentation for impairments of assets and for gains on derecognition and changes in expected cash flows on loans acquired. Specifically, impairments of other financial and non-financial assets and gains on derecognition and changes in expected cash flows on loans acquired from Laiki Bank are presented in line with provisions for impairment of customer loans. Comparatives have been reclassified accordingly to conform with changes in the presentation of the current period. Bank of Cyprus KOINO ΚΥΠΡΙ 37#38Income Statement bridge for 1Q2015 € mn Net interest income Net fee and commission income Net foreign exchange gains (losses) and net profits (losses) on other financial instruments Insurance income net of insurance claims Other expenses Total income Total expenses Profit before provisions and impairments, gains on derecognition and changes in expected ¡ cash flows on acquired loans, restructuring costs and discontinued operations Provisions for impairment of customer loans Gains on derecognition and changes in expected cash flows on acquired loans Impairments of other financial and non-financial assets Share of profit from associates Profit before tax, restructuring costs and discontinued operations Tax Loss attributable to non-controlling interests ■ Profit after tax and before restructuring costs, discontinued operations and net profit from disposal of non-core assets Restructuring costs Net gains on disposal of non-core assets Loss from disposal group held for sale / discontinued operations, net of minority interest Profit after tax Per financial statements Reclassification Per presentation 225 225 43 2525 43 39 (43) (4) 12 12 (4) (4) 315 (43) 272 (109) 7 (102) 206 (36) 170 (148) (148) 0 43 43 (1) (1) 2 2 59 7 66 I (9) 0 0 50 7 57 0 (7) (7) (21) 29 Bank of Cyprus 38 (21) 29 KOINO WKYNРIW#39Income Statement by Geography (€ mn) CYPRUS UK RUSSIA 1Q2015 4Q2014 1Q2015 4Q2014 1Q2015 4Q2014 Net interest income 211 216 8 5 7 10 Net fee & commission income 42 34 1 2 2 2 Net FX income/(losses) and net gains/(losses) from financial instruments (5) 12 0 0 3 (2) Insurance income net of insurance claims 12 Other income (expenses) 12 10 3 (5) 0 0 0 1 Total income Staff costs Other operating expenses 263 267 9 7 12 11 (56) (56) (4) (4) (6) (6) (36) (54) (4) (5) (6) (10) Total expenses (92) (110) (8) (9) (12) (16) I Profit before provisions and impairments 171 157 1 (2) 0 (5) Provisions for impairment (122) (207) (1) (2) (25) (189) Gains on derecognition and changes in expected cash flows on acquired loans 43 30 Impairment of other financial assets and non financial assets (1) (48) Share of profit/(loss) from associates 2 3 ¡Profit before tax 93 (65) 0 (4) (25) (194) Tax (8) 0 (0) (0) 0 (9) Profit attributable to non-controlling interests 0 1 5 43 I Profit after tax and before one off items L 85 (64) 0 (4) (20) (160) Bank of Cyprus KOINO ΚΥΠΡΙ 39#40Cyprus: Income Statement by business line (€ mn) Consumer Banking SME Banking Corporate International Banking Banking Wealth & Brokerage & RRD Other Total Cyprus Asset Management Net interest income 54 18 17 15 2 82 23 211 Net fee & commission income 16 2 2 17 0 3 2 42 Other income (expenses) 1 0 0 2 1 0 6 10 Total income 71 20 19 34 =4 3 85 55 31 263 Total expenses (29) (3) (3) (7) (1) (12) (37) (92) | Profit before provisions and 42 17 16 27 2 73 (6) 171 ! impairments Provisions for impairment (27) (5) (2) (9) (1) (78) 0 (122) Gains on derecognition and changes in expected cash flows on acquired loans 15 5 10 1 (0) 7 5 43 Impairment of other finanial assets (1) (1) Share of profit of associate and Minority Interest ■ Profit before tax 2 2 30 17 24 19 0 2 0 93 Tax (2) (2) (3) (2) (0) (3) 4 (8) Profit after tax and before one off I items 28 15 21 17 1 (1) 4 85 Cost-to-Income ratio 41% 15% 13% 21% 46% 9% 35% Bank of Cyprus KOINO ΚΥΠΡΙ 40#41Risk Weighted Assets by Geography - Regulatory Capital Risk weighted assets by Geography (€ mn) Equity and Regulatory Capital (€ mn) 31.03.14 30.06.14 30.09.14 31.12.14 31.03.15 30.6.14 30.9.14 31.12.14 31.03.15 Cyprus 20.124 19.807 20.296 20.452 20.473 Shareholders' equity 2.748 3.728 3.465 3.502 Russia 1.318 1.276 1.203 706 813 CET1 capital² 2.547 3.512 3.191 3.201 United Kingdom 976 616 633 986 1.162 Romania 369 358 316 308 294 Tier I capital 2.547 3.512 3.191 3.201 Greece 240 381 367 217 181 Tier II capital 3 39 42 30 Other1 223 47 48 46 49 Total regulatory capital (Tier I + Tier II) 2.550 3.551 3.233 3.231 Total 23.249 22.485 22.863 22.715 22.972 Risk weighted assets by type of risk (€ mn) 31.03.14 30.06.14 30.09.14 31.12.14 31.03.15 Credit risk 21.418 20.457 20.834 20.625 20.881 Market risk 54. 5 5 5 6 Operational risk 2.058 2.023 2.023 2.085 2.085 Total 23.530 22.485 22.863 22.715 22.972 1Other countries include Ukraine, Channel Islands and Netherlands 2Includes unaudited profits amounting to €15 mn for the quarter Bank of Cyprus 41 KOINO WKYNРIW 2235#42Reconciliation of Group Equity to CET 1 (€ mn) Group Equity per financial statements Less Intangibles and other deductions Less: Deconsolidation of insurance and other entities 31.03.15 3.508 (16) (218) Less: Regulatory adjustments (Minority Interest, DTA and other items) (23) Less: Revaluation reserves and other unrealised items transferred to Tier II (50) CET 1 (transitional)1 3.201 Less Adjustments to fully loaded (mainly DTA) (118) CET 1 (fully loaded) Risk Weighted Assets CET 1 ratio (fully loaded) 1CET 1 ratio includes unaudited profits amounting to €15 mn for the quarter 3.083 22.972 13,4% Bank of Cyprus 42 KOINO WKYNРIW 2235#43Loans and Deposits by Geography Gross Loans by Geography € mn 30.06.14 30.09.14 31.12.14 31.03.15 € mn Deposits by Geography 30.06.14 30.09.14 31.12.14 31.03.15 Cyprus 22.020 21.716 21.200 21.320 Cyprus non-IBU** 8.094 7.785 7.847 8.081 Cyprus IBU** 3.594 3.458 3.467 3.560 UK 1.172 1.112 914 1.026 Cyprus - Total 11.688 11.243 11.314 11.641 Russia 1.304 1.208 966 1.072 UK 1.252 1.289 1.305 1.356 Other 804 706 692 Russia 845 794 545 609 667 countries* Other countries* *** 18 4 5 5 Group 25.300 24.742 23.772 24.085 Group 13.803 13.330 13.169 13.611 Gross Loans by Geography 4,5% 4,3% ,2,8% ■Cyprus ■ UK ■Russia Other Countries* 88,5% © Other countries: Romania, Ukraine (until March 2014) and Greece Deposits by Geography 4,5% 0,0% Cyprus - non IBU 10,0% Cyprus - IBU** UK ■Russia 26,2% Other Countries 59,3% Total Cyprus 86% ** IBU- Division servicing exclusively international activity companies registered in Cyprus and abroad and non-residents Bank of Cyprus KOINO ΚΥΠΡΙ *** Other countries: Romania and Ukraine (until March 2014) 2235 43#44Gross loans by Geography and by Customer Type Gross loans by geography 28,35 1,3 26,74 1,2 26,26 25,30 24,74 Total 23,77 24,09 1,2 ■ Other countries* 1.46 1,79 0,8 0,7 1,28 1,43 0,7 0,7 (€ bn) 1,19 1,29 1,17 1,30 1,21 1,11 0,97 ■Russia UK 0,91 1,03 1,07 ■Cyprus 23,83 22,80 22,60 22,02 21,72 21,20 21,32 30.06.13 31.12.13 31.03.14 30.06.14 30.09.14 31.12.14 31.03.15 *Other countries: Greece, Romania and Ukraine (until March 2014) Gross loans by customer type 28,35 26,74 26,26 ■Retail other 25,30 24,74 23,77 24,09 Total ■Retail Housing 3,44 3,01 (€ bn) 2,94 2,52 2,42 ■SMES 5,44 2,44 2,54 5,37 5,30 4,67 4,61 4,41 4,43 ■Corporate 6,37 6,12 6,09 5,50 5,54 5,09 5,02 13,10 12,24 11,93 12,61 12,17 11,83 12,10 30.06.13 31.12.13 31.03.14 30.06.14 30.09.14 31.12.14 31.03.15 Bank of Cyprus KOINO WKYNРIW 2235 44#45Analysis of Deposits by Geography and by Type Deposits by geography 16,97 ■Russia & Other 1,25 14,97 14,07 countries* 1,29 13,80 1,02 13,33 13,17 13,61 Total 0,83 ■ UK 1,24 0,87 1,25 0,79 4,75 1,25 0,55 1,29 1,30 (€ bn) 4,05 3,79 ■Cyprus IBU 3,59 3,46 3,47 3,57 ■Cyprus non-IBU 9,67 8,66 8,20 8,09 7,79 7,85 8,07 30.06.13 31.12.13 31.03.14 30.06.14 30.09.14 31.12.14 31.03.15 * Other countries: Romania and Ukraine Deposits by type of deposit 16,97 ■Current & demand Total accounts 14,97 14,07 3,42 13,80 13,33 13,17 13,61 ■Savings accounts 0,83 3,49 3,53 3,72 ■Time deposits 0,93 3,96 4,33 4,48 (€ bn) 0,95 0,95 0.84 0,96 0,97 12,72 10,55 9,59 9,13 8,53 7,88 8,16 30.06.13 31.12.13 31.03.14 30.06.14 30.09.14 31.12.14 31.03.15 Bank of Cyprus KOINO WKYNРIW 45#46Market Shares and Customer flows in Cyprus Market share evolution in Cyprus • Deposits 39,1% 40,0% 39,5% 40,5% 40,8% 41,1% Around 1% increase in the Bank's market share in deposits since the bottom. 38,1% 38,8% 37,2% 37,3% 37,7% The Bank's market share in loans has been hovering around 38% 27,9% 27,5% 26,4% 25,5% 24,9% 24,8% 24,6% 24,8% 25,0% 25,5% 25,3% Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Total customer flows per quarter (€ mn) -446 -411 -546 65 -11 450 • 386 Customer flows were positive during 1Q2015 142 -2.227 2Q2013 3Q2013 4Q2013 1Q2014 2Q2014 3Q2014 4Q2014 1Q2015 2Q2015* * Up to 28 May 2015 Post full abolition of capital controls in April 2015, customer flows are positive Bank of Cyprus 46 KOINO WKYNРIW 2235#47Cyprus: Summary Income Statement € mn 1Q2015 4Q2014 3Q2014 2Q2014 1Q2014 Net interest income 211 216 216 251 236 Net fee and commission income 42 34 35 36 40 Net foreign exchange gains/(losses) and net profits/(losses) on other financial instruments (5) 12 (9) (2) 6 Insurance income net of insurance claims 12 10 9 12 12 Other income/(expenses) Total income Staff costs Other operating expenses Total expenses Profit before provisions and impairments, gains on derecognition and changes in expected cash flows on acquired loans, restructuring costs and I discontinued operations Provisions for impairment of customer loans 3 (5) (5) (1) 263 267 246 302 293 (56) (56) (55) (55) (55) (36) (54) (38) (40) (36) (92) (110) (93) (95) (91) 171 157 153 207 202 (122) (207) (101) (163) (109) Gains on derecognition and changes in expected cash flows on acquired loans Impairments of other financial and non-financial assets 43 30 6 4 7 (1) (48) 1 (34) (0) Share of profit from associates 3 (2) 2 2 Profit/(loss) before tax, restructuring costs and discontinued operations 93 57 16 102 -- Tax (8) 0 (1) (1) Profit/(loss) attributable to non-controlling interests (0) (0) (0) i Profit /(loss) after tax and before restructuring costs, discontinued operations and net profit on disposal of non-core assets 85 (64) 55 15 101 Bank of Cyprus KOINO WKYNРIW 2235 47#48UK: Summary Income Statement (€ mn)) Net interest income 1Q2015 4Q2014 3Q2014 2Q2014 1Q2014 7 5 10 9 7 Net fee & commission income 1 2 1 1 1 Net foreign exchange income and (losses)/gains from financial instruments 0 0 1 Other income (expenses) 1 0 1 (1) Total income 9 7 12 10 8 Staff costs Other operating expenses Total expenses (4) (3) (3) (3) (3) (4) (6) (3) (3) (3) (8) (9) (6) (6) (6) Profit /(loss) before provisions (2) 6 4 2 Provisions for impairment of loans and advances (1) (2) 2 (9) (21) Profit/(loss) before tax 0 (4) 8 (5) (19) Tax (0) (0) (1) Profit/ (loss) after tax and before restructuring costs and discontinued joperations 0 (4) 8 (6) (19) b.p. basis points, p.p. = percentage points ; 100 b.p. = 1 p.p. Bank of Cyprus KOINO WKYNРIW 48#49UK Operations UK Loans (€ bn) ex-Laiki UK loans Loans by sector Consumer Credit Housing 2% 2% 1,46 1,38 1,28 1,19 1,17 1,11 1,03 0,83 0,72 0,65 0,91 0,56 0,45 0,40 0,30 SMES 27% 0,83 0,74 0,73 0,72 0,74 0,77 0,81 0,91 1,03 31.12.12 30.06.13 30.09.13 UK Deposits (€ bn) 31.12.13 31.03.14 30.06.14 30.09.14 31.12.14 31.03.15 1,36 1,29 1,30 1,28 1,29 1,24 1,25 1,25 1,21 31.12.12 30.09.13 31.03.14 30.09.14 31.03.15 Corporate 69% Bank of Cyprus KOINO WKYNРIW 49#50Russian Operations Russian Loans (€ bn) 1,79 1,62 1,43 1,29 1,30 1,21 0,97 30.06.13 7 30.09.13 31.12.13 Russian Deposits (€ bn) 31.03.14 30.06.14 T 30.09.14 1,15 30.06.13 30.09.13 1,08 31.12.14 0,92 0,85 0,77 0,79 0,55 31.12.13 31.03.14 30.06.14 30.09.14 31.12.14 1,07 • Loss from disposal group held for sale/ discontinued operations for 1Q2015 was €21 mn, of which a loss of €20 mn relates to the Russian operations (compared to a net loss of €214 mn for 4Q2014, of which a loss of €246 mn related to the Russian operations) 31.03.15 31.03.15 0,61 Bank of Cyprus KOINO WKYNРIW 50#51Overseas Operations - Romania & Greece Romanian Gross loans (€ mn) Total exposure in Greece € mn 31.12.14 31.3.151 657 637 Net Exposure from on balance 97 76 631 sheet financial assets 533 518 520 Exposure from off balance 185 154 sheet financial assets Foreclosed properties (book 179 200 31.12.13 31.03.14 30.06.14 30.09.14 31.12.14 31.03.15 value) The Bank has decided to gradually run down the Romanian operations (over a period of 3 years from 2015-2017) and to proceed with piecemeal sales of selected loans The overall net exposure in Romania is €439 mn (compared to €520 mn at 31 December 2014). 1 In addition to the above, in the normal course of business in Cyprus, the Bank has lending exposures to Greek entities amounting to €89 mn as at 31 March 2015. Bank of Cyprus 51 KOINO WKYNРIW 2235#52Asset Quality (€ mn) Mar-15 Dec-14 Sep-14 Jun-14 Mar-14 A. Gross Loans after Fair value on Initial recognition 22.540 22.206 23.136 23.685 24.450 Fair value on Initial recognition 1.545 1.566 1.606 1.615 1.813 B. Gross Loans 24.085 23.772 24.742 25.300 26.263 B1. Loans with no arrears 10.038 10.065 10.298 10.964 11.491 B2. Loans with arrears but not impaired 4.627 4.413 5.222 5.285 6.037 Up to 30 DPD 662 562 750 919 865 31-90 DPD 596 492 716 826 1.151 91-180 DPD 344 440 718 674 + 682 + 181-365 DPD 758 926 1.058 1.145 1.635 + Over 1 year DPD 2.267 1.993 1.980 1.721 1.704 + B3. Impaired Loans 9.420 9.294 9.221 9.051 8.735 With no arrears 1.006 1.153 1.145 1.133 1.051 Up to 30 DPD 68 149 66 104 53 31-90 DPD 91-180 DPD 275 142 168 122 344 181 143 233 398 317 181-365 DPD 445 685 828 1.551 1.495 Over 1 year DPD 7.445 7.022 6.781 5.743 5.475 (90+ DPD)* 12.789 12.653 12.977 12.591 12.756 90+ DPD ratio (90 + DPD / Gross Loans) 53,1% 53,2% 52,5% 49,8% 48,6% Accumulated provisions 5.354 5.140 4.948 4.879 5.029 Gross loans provision coverage 22% 22% 20% 19% 19% 90+ DPD provision coverage 42% 41% 38% 39% 39% Bank of Cyprus KOINO ΚΥΠΡΙ Loans in arrears for more than 90 days (90+ DPD) = Loans with arrears over 90 days but not impaired + Impaired Loans 52#5390+ DPD by Geography 90+ DPD by Geography (€ bn) ■Cyprus Russia ■ UK Other countries* 12,76 12,59 12,98 12,65 12,79 0,57 0,89 0,52 0,26 0,58 0,55 0,11 0,28 0,55 0,09 0,25 0,51 0,60 0,44 0,51 11,18 11,28 11,60 11,47 11,53 31.03.14 30.06.14 30.09.14 31.12.14 Other countries: Romania, Ukraine (until March 2014) and Greece 49% 34% 21% 90+ DPD ratios by Geography 75% ■Cyprus Russia ■ UK Other countries* 51% 39% 24% 31.03.15 31.03.14 30.06.14 30.09.14 65% 80% 54% 52% 84% 54% 56% 82% 53% 46% 23% 10% 31.12.14 31.03.15 Bank of Cyprus KOINO WKYNРIW 2235 53 11%#54% of total 19% Gross loans by business line (€ bn) 30.06.14 30.09.14 ■31.12.14 ■ 31.03.15 5,21 4,87 4,34 4,53 9% Analysis of Loans and 90+ DPD ratios by Business Line* 2,73 2,63 2,30 2,20 90+ DPD ratios by business line 30.06.14 ■ 30.09.14 ■31.12.14 31.03.15 30% 33% 32% 28,8% Corporate 28% 28% 24% SMEs 26,6% 16% 3,94 3,90 3,85 3,85 Corporate SMES Housing Consumer Credit 14% 17% 16% 16,4% 31% 32% 31% 30,6% %99 68% 2,01 1,90 *As part of the restructuring of the Group, management is currently monitoring the loan portfolio of the Group using new business line definitions. An important component of the Group's new operational structure is the establishment of the RRD for the purposes of centralising and streamlining the management of its delinquent loans. No comparative information is available prior to June 2014. Bank of Cyprus 54 %69 68,4% Housing Consumer Credit RRD-Mid and Large Corporates RRD-SMEs 1,75 1,83 8% 5,84 5,55 5,33 22% 5,37 1,50 1,48 1,40 1,39 6% RRD-Mid and Large Corporates RRD-SMES RRD Recoveries 79% 82% 81% 80,8% RRD-Recoveries KOINO WKYNРIW 2235 100% 100% 100% 100% 4,06 20% 4,41 4,78 4,91#5544% 44% 45% 47% total Gross loans by economic activity (€ bn) ■31.12.13 31.03.14 ■ 30.06.14 % of 10% 4% 2,83 2,82 2,74 2,70 2,47 Trade Analysis of Loans and 90+ DPD ratios by Economic Activity 2,48 1,00 0,95 ☐ 0,96 ■ 0,95 0,89 0,91 Manufacturing ■30.09.14 7% ■31.12.14 31.03.15 17% ☐ 1,89 1,85 1,82 1,61 1,50 1,57 4,25 90+ DPD ratios by economic activity ■31.12.13 ■31.03.14 ■ 30.06.14 ■ 30.09.14 ■31.12.14 ■31.03.15 50% 48% 50% 51% 53% 55% 54% 54% 51% 47% 52% %09 4,21 13% Restaurants Hotels & Construction Real estate Private 4,13 4,09 3,96 4,04 4,20 4,12 3,63 3,59 3,12 3,17 8,54 8,41 8,05 7,96 7,85 7,92 2,31 2,18 2,44 2,32 1,86 1,89 1,73 1,72 1,53 1,53 2,12 2,09 33% 8% 9% Professional Individuals services & other sectors 59% 62% 70% 72% 77% 78% 79% 77% 52% 50% 48% 51% 48% 48% 32% 33% 34% 37% 38% 38% 57% 54% 55% 58% 54% 55% 65% 64% Professional Trade Manufacturing Restaurants Hotels & Construction Real estate Private Individuals services & other sectors Other Bank of Cyprus ΚΥΠΡΙ KOINO 237 55 %09 %09 67% 67% Other#5612-2008 90+ DPD and Quarterly Change of 90+ DPD 90+ DPD (€bn) and Quarterly change of 90+ DPD (€ mn) Quarterly change of 90+ DPD (€ mn) -90+ DPD (€ bn) 90+ DPD formation 11,0 1,3 1,6 2,0 4,4 3,5 3,6 3,8 4,0 2,9 2,3 2,2 2,5 5,0 5,1 5,1 7,7 6,5 13,0 13,0 12,8 12,6 13,0 12,7 12,8 03-2009 06-2009 09-2009 12-2009 03-2010 06-2010 09-2010 12-2010 03-2011 06-2011 09-2011 12-2011 03-2012 06-2012 09-2012 12-2012 06-2013* 09-2013 12-2013 03-2014 06-2014 09-2014 12-2014 03-2015 FY2009 €945 mn FY2010 €1.329 mn €1.399 mn FY2011 FY2012 €2.723 mn FY2013 €5.311 mn FY2014 -€350 m n -85 321 380 329 265 410 558 96 232 156 402 609 100 64 1.319 1.240 3.319 1.972 20 -243 -169 387 136 * 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. Bank of Cyprus 56 KOINO WKYNРIW 2235#57Non-Performing Loans definition Non-Performing Loans (NPLs) as per the Central Bank of Cyprus Directive: In accordance with the directive, a loan is considered as non-performing when it shows arrears of more than 90 days or if it has been restructured and at the time of restructuring presented arrears for a period of more than 60 days, regardless of tangible or other collateral or it has been restructured more than 2 times in a period of 18 months. More specifically a NPL is defined as a loan which has arrears (of interest or capital or any other charges) for a period of more than 90 days, an overdraft in excess of its contractual limit on a continuous basis for a period of more than 90 days and a restructured facility which at the time of restructuring was classified as NPL or has arrears/excesses for a period of more than 60 days, or has been restructured more than 2 times in the last 18 months. Restructured loans remain as NPLs for 6 months following the commencement of the new repayment schedule of capital installments or in the case of gradual increasing installments, six months from the first month from which the higher installment is due. In case of lump-sum payments at maturity, the loan remains as NPL until its maturity. Non-Performing Exposures (NPEs) as per the EBA definition: In 2014 the European Banking Authority (EBA) published its reporting standards on forbearance and non-performing exposures (NPEs). According to the EBA standards, a loan is considered a non- performing exposure if: - (i) 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, for example in case of a write off, a legal action against the borrower, or bankruptcy - (ii) the exposures are impaired i.e. in cases where there is a specific provision, or - (iii) there are material exposures which are more than 90 days past due, or - (iv) there are performing forborne exposures re-restructured within a 2 year probation period, or - (v) there are performing forborne exposures under probation (2 years) that present more than 30 days past due after the restructuring date. -90+DPD: 90+ DPD are loans with a specific provision (i.e. impaired loans) and loans past-due for more than 90 days but not impaired Bank of Cyprus KOINO WKYNРIW 2235 57#58Disclaimer 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. Bank of Cyprus KOINO WKYNРIW 2235 58