Group Financial Results H1 2016

Sustainable Asset Quality Improvement across the RRD book Bespoke tactical plans are in place for each segment within RRD, delivering asset quality improvements ... Major Corporate Management Corporate Management ⚫ c. 70 experienced restructuring officers Business unit summary (€ bn) Key management actions Reduction of €0,7 bn ⚫23 connections 2,9 2,8 2,5 • >€100 mn debt 2,0 1,7 1.3 Large diversified Dec Mar- Jun- 15 16 16 Dec Mar- Jun- groups 15 16 16 Gross loans 90+ DPD 1,8 1,6 1,4 Dec Mar Jun- 15 16 16 Gross loans Reduction of €0,6 bn 1,0 0.6 0.4 Dec Mar Jun- 15 16 16 90+ DPD ⚫ c170 connections • €6-100 mn debt • Mid market businesses • Portfolios assigned based on size/complexity • Sustainable solutions using (amongst others): Debt: Equity & Debt: Asset swaps - Re-tranching, including 'equity like' PIK • Support from internationally experienced restructuring specialists and external lawyers (UK & CY) used extensively • Comprehensive improvements to lending documents, security, step in rights, monitoring & covenants Progress Good progress €350 mn of portfolio transferred back to Corporate Line Active negotiations ongoing with all major borrowers Good prospects to conclude and execute deals Reduction of €0,2 bn 1,0 0,9 0,8 SME 1,4 1,3 1,3 Dec Mar Jun- 15 16 16 Gross loans Dec Mar- Jun- 15 16 16 90+ DPD • c.1900 connections <€6 mn debt Small OMBs1 • 8 specialist geographically spread BU's • • New team added in 1Q2016 to drive pace Portfolio analysis with targeted campaigns • Product range enhanced e.g. split & freeze Close monitoring & clearing of early arrears Rapidly improving progress • New team and approach delivering results, with pace improved QvQ • Underlying economic improvements helping (1) Owned Medium Businesses. Bank of Cyprus KOINO KYMPI 8

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