#1Bank of Cyprus Group Group Financial Results For the six months ended 30 June 2020 Bank of Cyprus Holdings KOINO WKYMPI WN اد#2DISCLAIMER Group Financial Results for the six months ended 30 June 2020 The financial information included in this presentation is neither reviewed nor audited by the Group's external auditors. The Interim Condensed Consolidated Financial Statements for the six months ended 30 June 2020 have not been audited by the Group's external auditors. The Group's external auditors have conducted a review of the Interim Condensed Consolidated Financial Statements in accordance with the International Standard on Review Engagements 2410 "Review of Interim Financial Information performed by the Independent Auditor of the Entity" (UK & Ireland). This financial information is presented in Euro (€) and all amounts are rounded as indicated. A comma is used to separate thousands and a dot is used to separate decimals. Important Notice Regarding Additional Information Contained in the Investor Presentation The presentation for the Group Financial Results for the six months ended 30 June 2020 (the "Presentation"), available on https://www.bankofcyprus.com/en-GB/investor-relations-new/reports- presentations/financial-results/, includes additional financial information not presented within the Group Financial Results Press Release (the "Press Release"), primarily relating to (i) NPE analysis (movements by segments and customer type), (ii) rescheduled loans analysis, (iii) details of historic restructuring activity including REMU activity, (iv) analysis of new lending, (v) Income statement by business line, (vi) NIM and interest income analysis and (vii) Loan portfolio analysis in accordance with the three-stages model for impairment of IFRS 9. Except in relation to any non- IFRS measure, the financial information contained in the Investor Presentation has been prepared in accordance with the Group's significant accounting policies as described in the Group's Annual Financial Report 2019 and updated in the Interim Financial Report 2020. The Investor Presentation should be read in conjunction with the information contained in the Press Release and neither the financial information in the Press Release nor in the Investor Presentation constitutes statutory financial statements prepared in accordance with International Financial Reporting Standards. Bank of Cyprus Holdings 2#3Highlights Group Financial Results for the six months ended 30 June 2020 Bank of Cyprus Holdings 3#41H2020 - Highlights • COVID-19 • €1.3 bn NPE reduction in 1H2020, including NPE sales • • • Group Financial Results for the six months ended 30 June 2020 Confirmed COVID-19 cases remain amongst the lowest within EU, despite relaxation of measures Continue to support colleagues, customers affected by COVID-19 and wider Cypriot economy Nascent signs of economic recovery post lockdown €0.9 bn NPE sale (Helix 2) agreed in August 2020 Organic NPE reduction of €137 mn in 2Q2020, despite lockdown Completion of €133 mn NPE sale (Velocity 2) in 2Q2020 NPES reduced to €2.6 bn (€1.1 bn net), pro forma for Helix 21 Gross NPE ratio reduced to 22% (11% net) and coverage maintained at 58%, pro forma for Helix 21 Good Capital and Strong Liquidity Position Operational efficiency Performance • in 2Q2020 . Total Capital ratio of 17.9%² and CET1 ratio of 14.4%² pro forma for Helix 21 • • • • Deposits at €16.3 bn, broadly flat qoq; significant surplus liquidity of €3.9 bn (LCR at 257%) Cost to income ratio³ at 57% for 2Q2020, broadly flat on prior quarter Total operating expenses³ reduced to €81 mn for 2Q2020, down by 18% yoy and by 3% qoq Increased usage of digital channels sustained post lockdown New lending of €238 mn for 2Q2020 (down by 47% qoq), impacted by COVID-19 lockdown Underlying result of profit after tax from organic operations of €4 mn for 2Q2020 Provisions/net loss relating to NPE sales of €104 mn for 2Q2020, including Helix 2 loss of €68 mn and loan credit losses of €21 mn for potential future NPE sales Loss after tax of €100 mn for 2Q2020 and €126 mn for 1H2020 (1) Calculations on a pro forma basis assume completion of the transaction (2) Allowing for IFRS 9 transitional arrangements (3) Excluding Special Levy and contributions to SRF and DGF (4) Including restructuring expenses Bank of Cyprus Holdings 4#5Group Financial Results for the six months ended 30 June 2020 €0.9 bn NPE sale agreed, reducing NPE ratio to 22%¹ Helix 2 Agreement for the sale of €886 mn NPEs Completion expected in 1H2021 Gross consideration of 46% of gross book value and 29% of contractual balance³, payable in cash, of which 65% is deferred and paid in instalments over 48 months from completion, without any conditions attached The consideration can be increased through an earnout arrangement, depending on the performance of the Helix 2 portfolio NPEs reduced by 26% to €2.6 bn¹ NPE ratio reduced by 6 p.p. to 22%¹ Net NPEs reduced to €1.1 bn¹ (-89%1 since peak) Loss of €68 mn recorded in 1H2020 -36 bps CET1 capital impact at completion +10 bps CET1 capital impact upon full payment of deferred consideration (1) Calculations on a pro forma basis assume completion of the transaction (2) Allowing for IFRS 9 transitional arrangements (3) As at 30 September 2019 (4) Deferred Purchase Price Bank of Cyprus Holdings 26% NPE reduction 6 p.p. reduction in NPE ratio NPES (€ bn) NPE ratio -26% 3.5 2.6 -6 p.p. 28% 22% Jun 2020 Jun 2020 pro forma Jun 2020 for Helix 2¹ Jun 2020 pro forma for Helix 21 CET1 ratio at 14.4% 2 pro forma for Helix 21 14.3% 14.3% 14.4% 14.9% Total CET1 impact +10 bps: Mar 2020 Jun 2020 Jun 2020 pro forma for Helix 21 Jun 2020 post DPP4 payment -48 bps already included in 2Q2020 +12 bps on completion +46 bps upon full payment of deferred consideration 5#6Accelerated de-risking: NPE sales of €3.8 bn since 2H2018 Helix 1 ✓ Completed Velocity 1 ✓ Completed Velocity 2 ✓ Completed Group Financial Results for the six months ended 30 June 2020 Helix 2 ✓ SPA Signed Sale of €2.7 bn NPES • Mainly secured large Corporate and SME NPES • 48 cents on GBV ⚫c.60 bps capital accretive1 Sale of €34 mn NPES • Retail unsecured NPES •Capital neutral1 Sale of €133 mn NPES Retail unsecured NPES Capital neutral1 •Completed in 2Q2019 • Completed in 2Q2020 •Bank retained €45 mn of senior bond •Completed in 2Q2019 Sale of €886 mn NPES •Mainly secured Retail and SME NPES ⚫46 cents on GBV •-36 bps capital impact on completion •+10 bps capital impact upon full repayment of deferred consideration •Completion expected in 1H2021 Continue to assess acceleration of de-risking through additional NPE sales in the future (1) On completion Bank of Cyprus Holdings 6#7>€12 bn or 83% NPE reduction since peak NPES (€ bn) 15.0 Allowance for Expected Loan Credit Losses Net NPES 9.9 (3.8) (8.6) 2.6 1.53 -€12.4 bn 31 Dec 14 NPE trades Organic 30 Jun 2020 pro forma for Helix 21 Gross NPE ratio reduced to 22%; 11% on a net basis pro forma for Helix 21 63% 62% .55% 47% 47% -41 p.p. 53% 50% 30% 29% 28% 42% 22% 32% 30% 17% 15% 14% Dec 14 Dec 15 Dec 16 Dec 17 Dec 18 Dec 19 Mar 20 Jun 20 Gross NPE ratio Net NPE ratio (1) Calculations on a pro forma basis assume completion of the transaction Bank of Cyprus Holdings Group Financial Results for the six months ended 30 June 2020 • €12.4 bn or 83% NPE reduction since peak ✓ c. €3.8 bn through trades ✓ c.€8.6 bn organic 11% Jun 20 pro forma₁ for Helix 2 NPE ratio reduced to 22% pro forma for Helix 21 (11% on a net basis) Helix 2 reduced NPE ratio by 6 p.p. 41 p.p. reduction since peak 7#8COVID-19 remains contained despite relaxation of measures 14 day moving average of confirmed new cases per 100,000 population 1 05/03/2020 15/03/2020 25/03/2020 04/04/2020 14/04/2020 4.3 3.4 24/04/2020 2.2 04/05/2020 14/05/2020 24/05/2020 13/06/2020 03/06/2020 603 23/06/2020 03/07/2020 3.4 • 2.2 0.4 1.6 13/07/2020 23/07/2020 02/08/2020 Europe Cyprus 12/08/2020 22/08/2020 Lockdown period Fast escalation of measures to contain pandemic spread Gradual relaxation of measures Lifting of restrictions in a gradual and controlled manner 1 All schools closed 4 Opening of retail shops and gradual return of students to schools 2 Travel ban & country lockdown 5 Opening of cafes and restaurants 3 Night curfew introduced 6 Opening of airports and ports Mandatory use of masks in indoor crowded spaces (1) Based on information up to 26 August 2020 provided by https://www.ecdc.europa.eu/en/publications-data/download-todays-data-geographic-distribution-covid-19-cases-worldwide Bank of Cyprus Holdings • Group Financial Results for the six months ended 30 June 2020 Remain vigilant to prevent a second wave of infection as restrictive measures are relaxed through extensive COVID-19 sample testing Introduction of specific measures in July 2020, for the management of the recent increase in COVID-19 cases, following the relaxation of the travelling restrictions 80#95.0% to 6.1% 120 3.2% 0.8% 6.0% 100 1.0% -6.0% to -7.4% -3.1% -11.9% 60 80 -8.7% 60 60 -15.0% 40 40 4Q2020 1Q2020 Cyprus Euro Area 2Q2020 2020E1 2021E1 Cypriot economy: nascent signs of recovery appear post lockdown Cypriot economy recorded a drop of 11.9% in 2Q2020 vs 15.0% decline in Euro Area Economic Sentiment starting to improve post lockdown Tourism arrivals (mn) impacted by COVID-19 lockdown Jan Feb Mar 2019 Bank of Cyprus Holdings -85% yoy 0.55 0.06 Apr May Jun Jul 2020 Source: Cyprus Statistical Service, Economics Research centre of the University of Cyprus and Eurostat (1) GDP projections under the base scenario of: the Ministry of Finance, the EBRD, the European Commission and the Economics Research centre of the University of Cyprus Feb-14 May-14 Aug-14 Nov-14 Feb-15 May-15 Aug-15 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Feb-17 May-17 Aug-17 Nov-17 Feb-18 May-18 Aug-18 Nov-18 Feb-19 • • • Cypriot economy contracted by 11.9% in 2Q2020, reflecting COVID- 19 lockdown Restart of the economy as of early May 2020, post lockdown Unprecedent policy response to mitigate COVID-19 impact Economic sentiment index improved since May 2020, driven by improvement in confidence in nearly all sectors as well as improvement in consumer confidence Weak international summer tourism arrivals, although partly offset by domestic tourism 9 May-19 Aug-19 Nov-19 Feb-20 May-20 Aug-20 Group Financial Results for the six months ended 30 June 2020#10Group Financial Results for the six months ended 30 June 2020 Timely and strong response by the European and the Cypriot authorities Comprehensive and far reaching measures to support performing businesses and the wider economy Government measures include: European Authorities measures-Implications for Cyprus 1. Subsidy of interest rate of new Business Loans (€180 mn) 1. Subsidy of interest rate for new loans to self employed and businesses Subsidy of interest rate for 4 years 2. Subsidy of interest rate of new Housing Loans (€45 mn) EU Recovery Fund (€2.7 bn) Cyprus expects to receive €1.3 bn in grants during the period 2021-23 and additional loans up to €1.4 bn The exact amounts will depend on the finalisation of the allocation criteria and on the government's national plan that will be submitted to the European Commission Subsidy of interest for 4 years Liquidity support to eligible businesses through the PEGF of EIB Guarantee to the banks of up to 80% 2. Pan-European Guarantee Fund (PEGF) (€300-€400 m n) 3. Financing of SMEs through CYPEF1 (€800 mn) 50%-50% risk sharing between the Government and the banks 4. Government Guarantee to EIB (€1.0 bn) 3. Government additional funding of €500 mn to eligible businesses For more details on the government measures, pleaser refer to slides 46-47 EU SURE Programme (€479 mn) Financial assistance in the form of loans supporting member states in their employment preservation schemes 4. Access to ESM's Pandemic Crisis Support through the Enhanced Conditions Credit Line, for c.€440 mn (2% of GDP) 1) The Cyprus Enterprise Fund Bank of Cyprus Holdings 10#11Supporting customers and society though COVID-19 • . Loan moratorium Payment holidays until end of 2020 (capital & interest) for customers with arrears <30 days as at 29 Feb 2020 €6.0 bn (>25k customers approved) • - €2.1 bn private individuals - €3.9 bn businesses • New lending Group Financial Results for the six months ended 30 June 2020 Maintaining Operational Resilience SupportCY €689 mn new loans in 1H2020 Participation in the governmental schemes for the subsidy of interest rate to private individuals and businesses Strong pipeline of over €65 mn for new housing loans, as at 21 August 2020 #RestartCY All branches operating as usual post lockdown Increased usage of digital channels sustained post lockdown • 72% of customers currently digitally engaged¹ (vs 66% in 1H2019) • 83% of total transactions² are performed through digital channels (vs 75% in 1H2019) e • Support to ministries, agencies and authorities in the fight against COVID-19 Donations of c. €0.5 mn for the fight of the pandemic: • c. €220K for the purchase of medical equipment à c. €260K for the support of educational activities Grants covering cost of repatriation flights (1) This is the ratio of digitally engaged individual customers to the total number of individual customers. Digitally engaged customers are the individuals who use the digital channels of the Bank (mobile banking app, browser and ATMs) to perform banking transactions, as well as digital enablers such as a bank-issued card to perform online card purchases (2) This is the ratio of the number of digital transactions performed by individuals and legal entity customers to the total number of transactions. Transactions include deposits, withdrawals, internal and external transfers. Digital channels include mobile, browser and ATMs Bank of Cyprus Holdings 11#12Group Financial Results for the six months ended 30 June 2020 Continue to support customers through payment deferrals Payment deferrals granted to 25K customers affecting €6.00 bn gross loans Gross Loans € bn # customers approved under moratorium 30 Jun 2020 % of Gross loans % with 21 payment (excluding legacy) 1 • by 30 June 2020 2.09 53% 25% COVID-19 moratorium until the end of 2020, as per government measures • Application period ended 30 June 2020 Moratorium period of up to Dec 2020 to address seasonality of the Cypriot economy Capital plus interest; Interest continues to accrue Private Individuals 20,427 Businesses 4,627 3.91 76% 9% • Total 25,054 6.00 66% 15% • COVID-19 moratorium does not trigger automatic reclassification due to forbearance Businesses Individual assessment of businesses was initiated in May 2020, with an initial focus on high risk customers Largest 30 businesses under moratorium amount to €1.7 bn or nearly half of all business loans under moratorium; over 70% has been reviewed without triggering a change in UTP2 9% of businesses under moratorium paid at least 1 instalment, until 30 June 2020 Private Individuals . Individual assessments of private individuals under moratorium has also commenced with priority to individuals with low credit scoring and employed in high risk industries, such as tourism One quarter of private individuals under moratorium paid at least 1 instalment until 30 June 2020 Bank of Cyprus Holdings • Continue to monitor the creditworthiness of customers who applied for the loan moratorium (1) Gross loans as at 30 June 2020: Corporate (incl. IB and W&M and Global Corporate), SME, Retail, Insurance and H/O (2) Unlikely to pay criteria 12#13Group Financial Results for the six months ended 30 June 2020 Well diversified loan portfolio; close monitoring and set up of strategies to prevent further asset quality deterioration Gross loans (excluding legacy)¹ by business sector of €9.15 bn Breakdown by COVID-19 impact assessment on business sectors € bn €9.15 bn Private Individuals 3.97 • High Impact: (12%) High 12% • Tourism (Hotels & Catering) Hotels & Catering 1.06 Real Estate 1.02 Trade 1.00 Other sectors 0.64 Professional 0.60 & Other services Construction 0.53 Manufacturing 0.33 (1) Gross loans as at 30 June 2020 of Corporate (incl. IB and W&M and Global Corporate), SME, Retail, Insurance and H/O Bank of Cyprus Holdings Medium 15% Moderate 16% Low 14% 43% Private individuals • Medium Impact: (15%) Trade Manufacturing • Moderate Impact: (16%) Construction Transportation and storage • Low: (14%) Real Estate Education ⚫ Health • Private individuals (43%) Refer to slide 14 13#14Private individuals loan portfolio, highly collateralised Private Individuals: €3.97 bn Other 17% • Low LTV1 housing portfolio 83% Housing Payment deferrals: €2.09 bn 1) • Housing performing loans: €3.28 bn • 65% of portfolio with LTV1<60% Only 15% of portfolio with LTV1>80% Other: €0.69 bn • 61% secured portfolio • • of which 59% with property Group Financial Results for the six months ended 30 June 2020 of which 41% with other type of collateral LTV1 Housing €3.28 bn Other €0.69 bn Other 7% c.25% with ≥1 payment by 30 June 2020 < 60% 65% 29% Personal 12% 60%-80% 20% 5% 80-100% 7% 5% 81% Housing >100% 8% 61% Loan to Value (LTV) is calculated as the Gross IFRS Balance to the indexed market value of the property. Under Pillar 3 disclosure, LTV is calculated as the Gross IFRS Balance to the indexed market value of collateral. Collateral takes into consideration the mortgage amount registered in the land registry plus legal interest from registration date to the reference date Bank of Cyprus Holdings 14#15Group Financial Results for the six months ended 30 June 2020 Business portfolio well diversified, with high quality collateral Business gross loans (excluding Legacy) 1 • • Breakdown, by Covid-19 impact Payment deferrals • 9% with 21 payment by 30 June 2020 €5.18 bn €3.91 bn High Impact: (21%) 21% Tourism (Hotels & Catering) Medium Impact: (26%) • Trade Manufacturing Moderate Impact: (28%) 26% 26% 20% Construction 28% 29% • Transportation and storage • Low: (25%) • Real Estate 25% 25% • Education • Health (1) Gross loans as at 30 June 2020 of Corporate (incl. IB and W&M and Global Corporate), SME, Retail, Insurance and H/O (2) Facilities/limits approved in the reporting period High quality origination via prudent underwriting standards Strong assessment of repayment capability . • Strict origination standards Effective foreclosure law in place, following the amendments in recent years • 98% of new exposures 2 since 2016 were performing at the start of the moratorium • 89% of portfolio secured • . of which 79% with property • of which 21% other type of collateral Low LTV3 business portfolio; 72% of the portfolio with LTV³<80% LTV3 High Medium Moderate Low Total < 80% 94% 58% 67% 73% 72% >80% 6% 42% 33% 27% 28% Total 100% 100% 100% 100% 100% (3) Loan to Value (LTV) is calculated as the Gross IFRS Balance to the indexed market value of the property. Under Pillar 3 disclosures LTV is calculated as the Gross IFRS Balance to the indexed market value of collateral. Collateral takes into consideration the mortgage amount registered in the land registry plus legal interest from registration date to the reference date Bank of Cyprus Holdings 15#16Group Financial Results for the six months ended 30 June 2020 Portfolio exposure to businesses most impacted by COVID-19 Tourism: €1.06 bn Trade: €1.00 bn 31 Mar 2020 30 Jun 2020 31 Mar 2020 30 Jun 2020 Hotels & Catering € bn € bn % of portfolio Trade € bn € bn % of portfolio Food services 0.06 0.06 5% Supermarkets, pharmacies and 0.30 0.29 29% other essential retail businesses Accommodation 0.97 1.00 95% All other 0.74 0.71 71% Total 1.03 1.06 100% Total 1.04 1.00 100% Unutilised Liquidity¹ 0.34 0.31 Unutilised Liquidity¹ 0.83 0.88 - of which deposits 0.28 0.26 25% - of which deposits 0.53 0.56 56% Majority of Accommodation customers entered the crisis with significant liquidity, following strong performance in recent years c. €1.0 bn or 95% under payment deferrals Payroll subsidy by the government of up to 60% for hotels whose turnover was reduced by more than 35%-40% • c.29% tied up to lower risk essential retail services, not materially impacted by COVID-19 • €0.6 bn or 59% under for payment deferrals (1) Unutilised overdraft amounts and deposits Bank of Cyprus Holdings 16#17• • Group Financial Results for the six months ended 30 June 2020 New lending' at €238 mn in 2Q2020, reflecting COVID-19 lockdown 98% of new exposures² in Cyprus since 2016 were performing at the start of the moratorium € mn € bn Non-legacy gross loans³ by business activity % change qoq 3.97 3.95 0.6% 563 35 548 30 491 -47% 59 451 59 443 18 49 Private Individuals Hotels & 1.06 Catering 1.03 1.00 302 Trade 325 1.04 225 254 214 1.02 238 17 Real Estate 1.01 79 62 47 100 43 42 Shipping & Syndicated loans Corporate 0.64 Other sectors 0.65 SME 81 79 25 99 90 96 69 Retail Housing Professional 0.60 & Other services 0.60 66 67 47 45 Retail other 42 27 0.53 1Q2019 2Q2019 3Q2019 4Q2019 1Q2020 2Q2020 Construction 0.53 Following the outbreak of COVID-19, new lending is focused on supporting the Cypriot economy Manufacturing 0.33 0.34 Strong market share of 52.6% in new housing loans in 1H2020 Jun 2020 Mar 2020 3.4% -4.5% 0.8% -0.7% -1.1% 0.1% -2.2% • • High quality origination via prudent underwriting standards New lending demand expected to pick up in 2H2020, especially for housing loans in the context of the government scheme for interest rate subsidy Strong pipeline of over €65 mn for new housing loans, as at 21 August 2020 Bank of Cyprus Holdings (1) New disbursements in the reporting period including the average YTD change (if positive) for overdraft facilities (2) Facilities/limits approved in the reporting period (3) Gross loans as at 30 June 2020: Corporate (incl. IB and W&M and Global Corporate), SME, Retail, Insurance and H/O 17#18Usage of digital channels sustained post lockdown Channel Usage (% of volume of transactions) since COVID-19 outbreak Group Financial Results for the six months ended 30 June 2020 Lockdown period Gradual relaxation of measures Online Banking 35% 38% 38% 40% 45% 48% ATM 34% 35% 37% 37% 32% 30% Digital Transformation Programme • Digital Transformation Programme that started in 2017 beginning to clearly deliver an improved customer experience Customers' reorientation towards digital channels: • Increase in active digital users by 18% since Jun 2019 • 72% of customers currently digitally engaged¹(vs 66% in 1H2019) Awarded Best Consumer Digital Bank in Cyprus for 2019 by Global Finance Branch 31% 22% 23% 25% 25% 25% Mar 2020 Apr 2020 1-7 May 2020 8-31 May 2020 Jun 2020 Jul 2020 (1) This is the ratio of digitally engaged individual customers to the total number of individual customers. Digitally engaged customers are the individuals who use the digital channels of the Bank (mobile banking app, browser and ATMs) to perform banking transactions, as well as digital enablers such as a bank-issued card to perform online card purchases Bank of Cyprus Holdings 18#19Group Financial Results for the six months ended 30 June 2020 Sustained Progress on Digital Transformation Digitally Engaged Customers (Individuals)1 O Jul 20: 72% Jun 20: 71% Apr 20: 70% Jul 19: 67% Jul 18: 62% Digital Transactions2 Ratio (Legal Entities) E Jul 20: 52% Jun 20: 53% Apr 20: 60% Jul 19: 30% Jul 18: 28% Digital Transactions 2 Ratio (Total Portfolio) سنا Jul 20: 83% Jun 20: 83% Apr 20: 85% Jul 19: 73% Jul 18: 69% Average mobile logins per month Jul 20: 18.5x Jun 20: 19.8x Apr 20: 21.1x Jul 19: 13.3x Jul 18: 11.8x (1) This is the ratio of digitally engaged individual customers to the total number of individual customers. Digitally engaged customers are the individuals who use the digital channels of the Bank (mobile banking app, browser and ATMs) to perform banking transactions, as well as digital enablers such as a bank-issued card to perform online card purchases (2) This is the ratio of the number of digital transactions performed by individuals and legal entity customers to the total number of transactions. Transactions include deposits, withdrawals, internal and external transfers. Digital channels include mobile, browser and ATMs Bank of Cyprus Holdings 19#20Capital and Liquidity Bank of Cyprus Holdings Group Financial Results for the six months ended 30 June 2020 20#21CET1 at 14.4% pro forma for Helix 25 min OCR (SREP) requirement for 2020 post ECB Announcement 4 Group Financial Results for the six months ended 30 June 2020 (-36 bps 17.9% 1.7% 14.3% 14.3% 14.4% 0.4% (0.3%) 0.2%- (0.1%) -0.5% (0.2%) 1.8% (0.5%) 0.1% 9.7% 9.7% CET1 31 Mar Operating 20201 Loan credit profit losses & other impairments 3 RWAs Other Amendments to capital regulations Other NPE sales related losses Helix 2 CET1 30 Jun 2020 1,2 Helix 2 P&L Impact Release of RWAS CET1 30 Jun 2020 pro form a for AT1 T2 1,2,5 Helix 2 • • Helix 2 reduces capital by 36 bps on completion c.40 bps organic capital generation from operating profitability Loan credit losses and other impairments³ reduced capital by c.30 bps c.50 bps capital benefit from amendments to capital regulations Flexibility to operate below Capital Conservation Buffer (CCB) and P2G, at least until end of 2022 _14.5% Total capital ratio 30 Jun 2020 pro forma 1,5 for Helix 2 Amendments in capital regulations in June 2020 • Benefit recorded in 2Q2020 SME factor: c.+ 40 bps Extension of IFRS 9 transitional arrangements: c.+10 bps Benefit not yet recorded Add back to CET1 of unrealised losses on government debt: c.+10 bps No full deduction of software assets from CET1: c.+10 bps Helix 2 benefit upon full payment of deferred consideration: +46 bps Onsite inspection by the SSM on the stock of REMU properties completed • Findings relating to a possible prudential charge of up to c.50 bps, under review by SSM Size and timing of impact, if any, uncertain } G OCR(SREP)- Overall Capital Requirement comprises the Total SREP Capital Requirement (Pillar 1 and Pillar 2 Requirement) plus combined buffer requirements (capital conservation buffer, countercyclical buffer and systemic buffers) Calculations on a pro forma basis assume completion of the transaction +50 bps +20 bps 1. Allowing for IFRS 9 transitional arrangements 4. 2. 3. The CET1 ratio for 30 June 2020, including the full impact of IFRS 9 amounted to 12.6% and 12.7% pro forma for Helix 2 Loan credit losses and other impairments include the net change of the prudential charges relating to specific credits and other items 5. Bank of Cyprus Holdings 21#22Group Financial Results for the six months ended 30 June 2020 RWA intensity¹ reduced to 55% in 2Q2020, pro forma for Helix 23 RWAs reduced by > €10 bn since peak 2014 Jun 20 RWAs Dec 19 Mar 20 Jun 20 Helix 2 Helix 2 DPP 2 Pro forma for Helix 23 € mn 12,890 12,599 11,960 (370) 258 11,848 RWA intensity¹ reduced to 55%, pro forma for Helix 23 85% 85% 85% 73% 70% 61% 62% 56% 55% -6 p.p. Dec 14 Dec 15 Dec 16 Dec 17 Dec 18 Dec 19 Mar 20 Jun 20 Jun 20 pro forma Helix 23 (1) Risk Weighted Assets over Total Assets (2) Deferred Purchase Price: 65% of consideration without any conditions attached, payable in three broadly equal instalments over 48 months from completion (3) Calculations on a pro forma basis assume completion of the transaction Bank of Cyprus Holdings • c.€640 mn RWA relief qoq - c.€380 mn (SME factor) - c.€260 mn balance sheet de-risking • RWA intensity reduced to 56%, down 6 p.p. qoq, on lower RWAS and higher Total Assets, following €1 bn utilisation of TLTRO III RWA intensity¹ decreased to 55% pro forma for Helix 23, as the RWA release will be largely offset by the RWA of the Deferred Purchase Price² Upon payment of the DPP2, RWA intensity will decrease to 54% 22#23Deposits at €16.3 bn, broadly flat qoq € bn Cyprus deposits by passport origin² Group Financial Results for the six months ended 30 June 2020 3% 16.84 3.70 16.38 16.47 3.46 3.49 16.69 3.54 16.25 3.31 16.30 3.32 4% 6% 20% Cyprus Other EU Russia Other countries 67% Other European countries, excl. Russia 13.14 12.92 12.98 13.15 12.94 12.98 Dec 18 Jun 19 Sep 19 Dec 19 Mar 20 Jun 20 1 Cyprus IBU Cyprus non-IBU Significant surplus liquidity of €3.9 bn Minimum Liquidity ratio 30 Jun 2020 Surplus required Significant surplus liquidity of €3.9 bn, up 32% qoq, reflecting €1 bn utilisation of TLTRO III • Strong deposit market share of 35.0% LCR (Group) 100% 257% €3,949 mn • Flexibility to operate below 100% LCR limit at least until end 2021 NSFR 3 100% 134% €4,248 mn (1) Servicing exclusively international activity companies registered in Cyprus and abroad and not residents (2) Origin is defined as the country of the passport of the Ultimate Beneficial Owner Bank of Cyprus Holdings (3) The NSFR has not yet been introduced. The NSFR is calculated as the amount of "available stable funding" (ASF) relative to the amount of "required stable funding" (RSF), on the basis of Basel III standards. Its calculation is a SREP requirement. The EBA NSFR will be enforced as a regulatory ratio under CRR II in 2021 23#24Balance sheet composition Total assets € bn 21.37 20.43 1.91 Other assets 1.54 (including HFS) 1.46 REMU properties 1.48 1.17 Legacy net loans 1.68 8.93 3 Non-legacy net loans 8.92 AIEA¹Mix 2Q2020 2.00 Securities² Liquids 1.95 0.62 40% Due from banks 0.46 AIEA:1 €17.7 bn 51% Cash and balances 5.28 4.40 with Central Banks 31 March 2020 30 June 2020 (1) AIEA: Average Interest earning assets. Please refer to slide 75 for the definition (2) Debt securities, treasury bills and equity investments (3) Gross loans as at 30 June 2020 of Corporate (incl. IB and W&M and Global Corporate), SME, Retail, Insurance and H/O Bank of Cyprus Holdings 9% Legacy net loans Group Financial Results for the six months ended 30 June 2020 Total equity & liabilities € bn 21.37 20.43 1.28 Other 1.29 2.12 Equity 2.24 0.26 Wholesale 1.00 Funding from 0.26 Central Bank 0.39 0.41 Due to banks Non- legacy net loans Customer deposits 16.25 16.30 31 March 2020 30 June 2020 24#25Profitability Bank of Cyprus Holdings Group Financial Results for the six months ended 30 June 2020 25#26Group Financial Results for the six months ended 30 June 2020 Income Statement € mn Net Interest Income Non interest income Total income Total expenses 1H2020 1H20191 2Q2020 1Q20201,2 qoq% yoy% 168 170 83 85 -2% -1% 120 163 60 60 0% -26% 288 333 143 145 -1% -13% (180) (208) (87) (93) -6% -14% Operating profit 108 125 56 52 7% -13% Loan credit losses (87) (87) Impairments of other financial and non-financial assets (29) (10) (Provisions)/reversal of provisions for litigation, claims, regulatory and other matters (4) Total loan credit losses, impairments and provisions Advisory and other restructuring costs-organic (Loss)/profit after tax-Organic (attributable to the owners) (120) (94) (6) (19) Provisions/net loss relating to NPE sales, including restructuring expenses² (107) Net loss of remeasurement of investment in associate (CNP) classified as held for sale ཆེ༅ ༞ སྒྱེ༄༅ 。 à (23) (64) -63% 1% (25) (4) (2) (2) 10% (50) (70) -28% 27% (10) (3) (3) 0% -39% 4 (23) (104) (3) (21) Reversal of impairment of DTA and impairment of other tax receivables 101 (Loss)/profit after tax-attributable to owners (126) 97 (100) (26) Net Interest margin (annualised) 1.90% 1.88% 1.88% 1.95% -7 bps +2 bps NII decreased to €83 mn in 2Q2020, mainly due to higher cash collections on interest not previously recognized in 1Q2020, offset by lower cost of deposits Non-interest income of €60 mn for 2Q2020, flat qoq • Total expenses reduced to €87 mn in 2Q2020, compared to €93 mn in 1Q2020, due to COVID- 19 related lower staff costs and seasonality of Deferred Guarantee Fund contribution • C/I ratio at 57%, broadly flat qoq • Loan credit losses of €23 mn in 2Q2020, reflecting cost of risk of 76 bps • Other impairments of €25 mn for 2Q2020, on specific, large, illiquid REMU properties Provisions/net loss relating to NPE sales of €104 mn for 2Q2020, including Helix 2 loss of €68 mn and loan credit losses of €21 mn for potential future NPE sales Profit after tax-organic of €4 mn in 2Q2020 Cost to income ratio 62% 63% 61% 64% -3 p.p. Cost to income ratio adjusted for the 57% 59% 57% 58% special levy and contributions to SRF and DGF Cost of Risk (annualised) EPS Organic (€ cent) 1.39% -4.3 1.34% 4.0 0.76% 0.8 2.00% -1 p.p. -124 bps -5.1 +5.9 -1 p.p. -2 p.p. +5 bps -8.3 Loss after tax of €100 mn for 2Q2020 and €126 mn for 1H2020 (1) The interest income, non-interest income, staff costs, other operating expenses and loan credit losses related to Project Helix are disclosed under 'Provisions/net loss relating to NPE sales, including restructuring expenses' since they are considered one-off items (2) Provisions/net loss relating to NPE sales including restructuring expenses' refer to the net loss on transactions completed during each period, net loan credit losses on transactions under consideration and for potential further sales at each reporting date, as well as the restructuring costs relating to these trades Bank of Cyprus Holdings 26#27Drivers of NIM Composition of NII Effective yield on assets & cost of funding NIM NII (€ mn) 85 90 84 85 83 189 199 187 • 195 188 (bps) 110 3 4 • 107 - Non-Legacy -Legacy -Liquids Cost of funding 1 5 102 100 Liquids 6 95 29 Legacy 27 29 23 23 24 24 18 528 2- 576 560 530 485 452 Non-Legacy 74 76 75 72 22 15 75 335 338 330 324 338 Group Financial Results for the six months ended 30 June 2020 €5 mn annual potential NII benefit from the take up of €1 bn TLTRO III Challenging interest rate outlook continues to put pressure on the effective yield of liquids Loan yields: • Non-Legacy book yields remain under pressure mainly due to the continued lower interest rate environment and intense competition pressure Despite competitive pressures, efforts to improve credit spreads are underway Higher-yielding, higher-risk legacy loans are reducing as we successfully exit NPEs • 17 7 6 8 4 -43 -39 -38 -30 -25 2Q2019 3Q2019 4Q2019 1Q2020 2Q2020 Net derivative Other Subordinated -6 236 -3 -3 -3 -3 336 -3 2Q2019 3Q2019 4Q2019 1Q2020 2Q2020 -6 -6 -6 -6 -3 loan stock -5 -8 -12 Customer -8 -10 -15 deposits -18 -20 -22 Legacy book yields remain volatile Cost of funding: • The reduction of cost of deposits continues • Cost of deposits reduced by 3 bps in 2Q2020 and by 68 bps since year end 2017 (1) Cash, placements with banks, balances with central banks and bonds (2) Other includes funding from central banks and deposits by banks and repurchase agreements. For further details, please see slide 67 (3) Effective yield of liquid assets: Interest income on liquids after hedging, over average liquids (Cash and balances with central banks, placements with banks and bonds) (4) Effective yield of cost of funding: Interest expense of all interest bearing liabilities after hedging, over average interest bearing liabilities (customer deposits, funding from the central bank, interbank funding, subordinated liabilities) Bank of Cyprus Holdings 27#28Non interest income flat qoq, despite COVID-19 lockdown Analysis of Non Interest Income (€ mn) - Quarterly Group Financial Results for the six months ended 30 June 2020 Net fee & Commission % of total income 22% 92 24 24 23% 72 72 14 12 10 18 12 12 25% 26% 23% 276 11 60 60 10 10 16 Net fee & commission (€ mn) Transactional fees 11 18 Non transactional fees Total 39 38 38 36 56 48 55 49 51 33 2Q2019 3 1Q2020 2Q2020 • • 16 12 • 22 21 38 33 3Q2019 4Q2019 1Q2020 (1) 2Q2020 1 REMU² Insurance income net of insurance claims Net fee & commission Recurring income ----- Net FX and other income (1) Net FX gains/(losses & Net gains/(losses) on financial instruments, and other income (2) Gains/(losses) from revaluation and disposal of investment properties and on disposal of stock of properties • Net fee and commission income of €33 mn for 2Q2020, down 13% qoq, negatively impacted by COVID-19 lockdown Transactional fees of €12 mn for 2Q2020, down 22% qoq, mainly due to lower volume of transactions; transactional fee volumes expected to recover to pre COVID-19 levels, as the Cypriot economy continues to recover Non transactional fees of €21 mn for 2Q2020, down 5% qoq due to the reduced Project Helix servicing fee as a result of the transfer of c.100 employees to the buyer in 1Q2020 Net Insurance income of €18 mn for 2Q2020, compared to €11 mn for 1Q2020, primarily due to the change in the valuation rate and lower motor vehicle insurance claims Recurring income of €51 mn for 2Q2020, compared to €49 mn in 1Q2020, as the higher Net insurance income offset the reduction in Net fees and commission income Introduction of liquidity fees to a broader group of corporate customers that was delayed due to COVID-19, is under consideration, once market conditions allow this Fees and commission charges review underway (3) The interest income, non-interest income, staff costs, other operating expenses and loan credit losses related to Project Helix are disclosed under 'Provisions/net loss relating to NPE sales, including restructuring expenses' since they are considered one-off items Bank of Cyprus Holdings 28#29• Recurring fees from insurance business EuroLife KOINO ΕΚΤΗΡΙ 237 Leading life insurer in Cyprus 24% market share² (Life & Health regular) Gross Written Premiums (GWP) up 4% yoy Product Mix by premium Unit-linked General Insurance of Cyprus Leading non-life insurer in Cyprus • 17.7% market share² (excl. motor) GWP down 1% yoy Product Mix by premium 18% Accident &Health 21% 61% Traditional Life GWP evolution (€ mn) +5% +4% 57 59 62 6% 13% 52% 29% Property Motor Liability Other GWP evolution (€ mn) +4% -1% 26 27 26 1H2018 1H2019 1H2020 1H2018 1H2019 1H2020 Eurolife 1H2020 GIC key metrics key metrics GWP (€ mn) 62 GWP (€ mn) GWP Investments & Pensions 6 PAT (€ mn) (€ mn) PAT (€ mn) AUM¹ (€ mn) 9 447 (1) Assets under management (2) Data based on statistics published on IAC website as at 31 December 2019 Bank of Cyprus Holdings Group Financial Results for the six months ended 30 June 2020 • Comprehensive insurance business package providing coverage for all financial needs Stable contributor to the Bank's profitability Well positioned for growth over medium term Group Insurance income net of claims (€ mn) 25 30 29 1Q2018 1H2019 1H2020 1H2020 26 26 Contribution to BOCH Non interest income 6 % of total 1H2020 24% 29#30Total Operating Expenses down by 18% yoy Cost to Income Ratio (C/I ratio)1 56% FY2018 59% 59% 58% 57% 57% 1H2019 FY2019 1Q2020 2Q2020 1H2020 • Total operating expenses (€ mn) -18% yoy 97 99 93 96 84 81 41 43 38 43 35 34 56 56 55 55 53 49 47 1Q2019 2 2 2Q2019 3Q2019 4Q2019 1Q2020 2Q2020 Other operating expenses Staff costs Special Levy and contributions to SRF and DGF (€ mn) 6 6 6 7 9 6 1Q2019 2Q2019 3Q2019 4Q2019 1Q2020 2Q2020 Group Financial Results for the six months ended 30 June 2020 • • . Cost to income ratio¹ at 57%, broadly flat qoq Total operating expenses of €81 mn for 2Q2020, down 3% qoq and 18% yoy Staff costs reduced to €47 mn in 2Q2020 relating to mostly one-off cost savings from special annual leaves to vulnerable groups and the suspension of the NHS contribution during the COVID-19 lockdown Operating expenses for 2Q2020 amounted to €34 mn, broadly flat qoq Special levy and contributions to SRF and DGF for 2Q2020 reduced to €6 mn, due to the seasonality of Deposit Guarantee Fund (DGF) contribution (1) Excluding Special Levy and contributions to SRF and DGF (2) The interest income, non-interest income, staff costs, other operating expenses and loan credit losses related to Project Helix are disclosed under 'Provisions/net loss relating to NPE sales, including restructuring expenses' since they are considered one-off items Bank of Cyprus Holdings 30#31Asset Quality Group Financial Results for the six months ended 30 June 2020 Bank of Cyprus Holdings 31#32Group Financial Results for the six months ended 30 June 2020 Gross loans and coverage by IFRS 9 staging Gross loans by IFRS 9 stage (€ mn) Allowance for expected loan credit losses (€ mn) Coverage ratio 12,822 12,709 12,491 11,593 Stage 1 7,209 6,673 7,025 7,022 61% 2,096 2,109 2,043 90 -101 44 63 -104 54 Jun2020 Dec Mar Jun 2019 2020 2020 pro forma for Helix 21 Stage 2 1,733 2,298 1,998 Stage 1 1.2% 1.5% 1.5% 1.5% 1,989 17% 1,962 1,945 1,497 1,885 Stage 3 3,880 104 3,738 3,468 2,582 22% 49 1,344' Stage 2 2.5% 2.8% 2.7% 2.5% Dec 19 Mar 20 Jun 20 % of gross loans Jun 2020 pro forma Dec 19 Mar 20 Jun 20 Jun 20 Stage 3 50.6% 52.0% 54.4% 52.1% pro forma for Helix 21 for Helix 21 Migration of c.€360 mn gross loans from Stage 2 to Stage 1 during 2Q2020, due to enriched data availability Coverage for Stage 3 loans maintained post Helix 2 (52.1%) Individual assessment of businesses under moratorium was initiated in May 2020, with an initial focus on high risk customers Largest 30 businesses under moratorium amount to €1.7 bn or nearly half of all business loans under moratorium; over 70% has been reviewed without triggering a change in UTP Individual assessments of private individuals under moratorium has also commenced with priority to individuals with low credit scoring and employed in high risk industries, such as tourism (1) Calculations on a pro forma basis assume completion of the transaction Bank of Cyprus Holdings 32#33Cost of risk' reduced to 76 bps for 2Q2020 4.30% 4.00% 2.80% 1.70% ıl.I... FY2014 1.39% 1.00% 1.12% 0.59% 0.80% FY2015 FY2016 FY2017 FY2018 FY2019 1H2020 Group Financial Results for the six months ended 30 June 2020 Mainly impact of deterioration of macro-economic outlook in 1H2020 Update of IFRS 9 macroeconomic assumptions for the Bank driving increase in COR by 59 bps in 1H2020 Base Scenario GDP Unemployment rate 2020 1Q2020 -6.9% 2Q2020 -6.3% 1Q2020 9.1% 2Q2020 9.2% 2021 5.4% 5.6% 7.6% 8.0% bps 123 90 89 200 76 200 173 152 88 123 55 30 111 2. 58 58 56 53 • 7: 7: 116 6 29 40 48 58 29 14 • 2Q2019 3Q2019 4Q2019 1Q2020 2Q2020 -21 -76 -84 COVID-19 Interest on net NPEs not received in cash New lending Stage 3 Stage 1 & 2 Cost of risk of 139 bps for 1H2020, of which 59 bps (€38 mn) reflect the initial impact of IFRS 9 Forward Looking Information (FLI) driven by deterioration of macroeconomic outlook recognised in 1H2020 COVID-19 related charge of 30 bps (€10 mn) in 2Q2020 Cost of risk of 105 bps for 2Q2020, when excluding one-off reversal of 59 bps and COVID-19 related charge of 30 bps In addition, • Helix 2 loss of €68 mn and loan credit losses of €21 mn for potential future NPE sales recorded in 2Q2020 • Other impairments of €25 mn on specific, large, illiquid REMU properties recorded in 2Q2020 • Interest on Net NPEs not received in cash, fully provided (€18 mn in 2Q2020) (1) Loan credit losses on customer loans including off-balance sheet exposures, net of gains/(losses) on derecognition of loans and advances to customers and change in expected cash flows over average gross loans Bank of Cyprus Holdings 33#34Clear strategy for residual NPES Group NPES (€ bn) Re-performing 3.47 0.35 NPES Group Financial Results for the six months ended 30 June 2020 Re-performing NPEs¹: €0.30 bn² Close monitoring of redefaults & quality of restructurings c. €275 mn re-performing NPEs applied to the loan moratorium scheme, extending their exit date Core NPES: €2.28 bn² 2.58 • 0.30 2.04 Retail SME 0.61 Corporate 0.47 30 Jun 2020 1.56 0.35 0.37 30 Jun 2020 pro forma for Helix 2 2 €2.28 bn • • • Sale of €886 mn mainly Retail and SME secured NPES (Helix 2) expected to be completed in 1H2021 Completion of sale of €133 mn retail unsecured NPEs (Velocity 2) in 2Q2020 Following COVID-19 outbreak, focus on arresting any potential asset quality deterioration and early managing of arrears Continue to seek organic solutions, including the realisation of collateral via consensual and non consensual foreclosures Remain committed to assessing the potential to accelerate the decrease in NPES through additional sales of NPEs in the future (1) In pipeline to exit NPEs subject to meet all exit criteria; the analysis is performed on a customer basis (formerly called Non-core NPEs) (2) Calculations on a pro forma basis assume completion of the transaction Bank of Cyprus Holdings 34#35Group Financial Results for the six months ended 30 June 2020 €145 mn organic NPE outflows in 2Q2020, leading to €137 mn organic NPE reduction -205 -142 -137 Net organic outflows (€ mn) -227 Inflows (€ mn) 50 32 New inflows 33 17 16 Redefaults 8 8 9 8 Unlikely to pay 9 6 7 Outflows (mn) 3Q2019 4Q2019 1Q2020 2Q2020 -42 Curing of restructuring -65 -72 -59 -17: -5 DFAS & DFES -18 -€145 mn ■-22 -71 -84 Write-offs -107 -89 -23 -158 -54 -133 Velocity 2 Other¹ -87 -237 Sales of NPES -277 (1) Other includes interest, cash collections and changes in balances Bank of Cyprus Holdings -886 Helix 2 -1,164 SPA Signed • • • €145 mn organic outflows, maintained at similar levels to 1Q2020, despite COVID-19 Helix 2 reduces NPEs by €886 mn Completion of Velocity 2 reduced NPEs by €133 mn 35#36Coverage and collateral maintained post Helix 2 NPE total coverage at 125% when collateral included pro forma for Helix 22 122% 115% 109% 122% 124% 128% 125% 69% 70% 68% 68% 67% 67% 68% Group Financial Results for the six months ended 30 June 2020 58% 3. Re-performing NPEs 23% 48% 52% 54% 56% 59% 58% Core NPES 63% 41% Dec 16 Dec 17 Dec 18 Dec 19 Mar 20 Jun 20 Allowance for expected loan credit losses Tangible collateral NPE coverage remains above EU average4 Jun 20 pro forma for Helix 22 58% 54% 51% 51% 46% 45% 43% BOC 30 Jun 2020 IT PT CY EU Average GR ES pro forma for Helix 22 (1) Restricted to Gross IFRS balance (2) Calculations on a pro forma basis assume completion of the transaction Bank of Cyprus Holdings • Jun 20 pro forma for Helix 22 Cash coverage increased to 58% pro forma for Helix 22 • Cash coverage of Core NPEs at 63%, pro forma for Helix 22 Collateral coverage at 67% (3) In pipeline to exit NPES subject to meet all exit criteria; the analysis is performed on a customer basis (formerly called Non-core NPEs) (4) Based on EBA Risk Dashboard as at 31 March 2020 36#37Lower REMU sales due to COVID-19 lockdown Evolution of REMU stock1 Group BV (€ mn) €27 mn sales in 1H2020 Sales contract prices 2 - Organic (€ mn) 1,530 1,490 1,484 1,456 103 98 183 182 Greece & Romania Residential 269 268 Commercial properties 24 24 Hotels 625 619 Land & plots Golf 280 265 Dec Dec Mar Jun 2018 2019 2020 2020 Property market starting to recover post lockdown Sale contracts (excluding DFA's)³ -80% -8% 1.423 1.057 766742 834739 766 714646 896825 2019 2020 510 419 216 Jan Feb Mar Apr May Jun Jul • 116% 91% 27 109% 90% Group Financial Results for the six months ended 30 June 2020 124% 91% 110% 90% 5 13 9 Total Sales 1H2020 Commercial Residential Land Net Proceeds / BV Gross Proceeds / OMV Temporary slowdown of REMU sales due to COVID-19 lockdown • Visible pipeline for €53 mn (SPAs signed) • Offers accepted for €15 mn Regulatory approval received for the setup of an Additional Investment Fund (AIF) consisting of properties of up to €45 mn GBV (1) In addition to assets held by REMU, properties classified as "Investment properties" with carrying value of €23 mn as at 30 June 2020 relate to legacy properties (2) Amounts as per Sales purchase Agreements (SPAs) (3) Based on data from Land of Registry- Sales contracts Bank of Cyprus Holdings 37#38Key takeaways Bank of Cyprus Holdings Group Financial Results for the six months ended 30 June 2020 38#39Group Financial Results for the six months ended 30 June 2020 Key highlights Continue to deliver on strategic priorities, while supporting customers, colleagues and communities through COVID-19 ་- 1 Continue to support the recovery of the Cypriot economy via prudent new lending 2 3 Bank of Cyprus Holdings Improvement of asset quality Arrest asset quality deterioration after the end of the moratorium, monitor and manage early arrears • Continue the NPE reduction via organic and non organic solutions Further improvement of operating efficiency supported by on-going digital transformation 39#40Group Financial Results for the six months ended 30 June 2020 Key Information and Contact Details Contacts Investor Relations Tel: +35722122239, Email: [email protected] Annita Pavlou Investor Relations Manager Tel: +357 22 122740, Email: [email protected] Elena Hadjikyriacou ([email protected]), Marina loannou ([email protected]) Andri Rousou ([email protected]), Stephanie Koumera ([email protected]) Executive Director Finance Eliza Livadiotou, Tel: +35722 122128, Email: [email protected] Credit Ratings Standard & Poor's Global Ratings: Long-term issuer credit rating: Affirmed at "B+" on 16 July 2020 (stable outlook) Short-term issuer credit rating: Affirmed at "B" 16 July 2020 Fitch Ratings: Long-term Issuer Default Rating: Affirmed at "B-" on 29 November 2019 (outlook revised to negative on 7 April 2020) Short-term Issuer Default Rating: Affirmed at "B" on 29 November 2019 Viability Rating: Affirmed at "b-" on 29 November 2019 Moody's Investors Service: Baseline Credit Assessment: Affirmed at "caa1" on 24 January 2019 Short-term deposit rating: Affirmed at "Not Prime" on 14 June 2019 Long-term deposit rating: Affirmed to "B3" on 14 June 2019 (positive outlook) Counterparty Risk Assessment: Affirmed at B1(cr) / Not-Prime (cr) on 14 June 2019 Listing: LSE - BOCH, CSE - BOCH/TPKH, ISIN IE00BD5B1Y92 Visit our website at: www.bankofcyprus.com Bank of Cyprus Holdings 40 40#41APPENDIX Macroeconomic overview Group Financial Results for the six months ended 30 June 2020 41#42-5 -10 0 Group Financial Results for the six months ended 30 June 2020 Cypriot economy dropped by 11.9% in 2Q2020 reflecting COVID-19 lockdown CY GDP declined 11.9% y-o-y vs 15% decline in Euro Area 5 Unemployment rate increased steeply in 2Q2020 14.0 0.8 12.0 10.0 -3.1 8.0 6.0 4.0 2.0 -11.9 0.0 -15.0 -15 2Q2017 3Q2017 4Q2017 1Q2018 2Q2018 3Q218 4Q2018 1Q2019 2Q2019 3Q2019 4Q2019 1Q2020 2Q2020 Cyprus Euro area - COVID-19 pandemic poses serious challenges to sovereign ratings ■ AA- A 2019Q1 2019Q2 2019Q3 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 UTO 2017Q3 2017Q4 Euro Area Tightening of spreads post COVID-19 lockdown 2018Q1 2018Q2 2018Q4 Cypr 2018Q3 0.6 0.5 9.6 7.3 7.7 6.5 2019Q4 2020Q1 2020Q2 S&P credit ratings Dec 12 Mar 13 May 13 Aug 13 Oct 13 Jan 14 Cyprus Mar 14 Jun 14 Aug 14 Nov 14 Jan 15 Apr 15 Jun 15 Sep 15 Nov 15 Portugal SOURCE: Statistical Service of Republic of Cyprus; Jan 16 Apr 16 Jun 16 Italy Bloomberg Sep 16 Nov 16 Feb 17 Apr 17 Jul 17 Sep 17 Dec 17 Feb 18 May 18 Jul 18 Oct 18 Dec 18 Feb 19 May 19 Jul 19 Oct 19 Spain (1) Normalised against Germany Government bond with maturity 15/8/2025 except Greece Greece Dec 19 Mar 20 Ireland May 20 Aug 20 BBB- BB- (2) Due to the Debt swap of the Hellenic Republic, from November 2017 onwards data for the new Hellenic Republic Bond with maturity Bank of Cyprus Holdings BBB Spreads (%) 0.4 0.3 0.2 0.1 0 Jan 2018 Feb 2018 Apr 2018 May 2018 Jul 2018- Aug 2018 Sep 2018 Nov 2018 Dec 2018 Feb 2019 Mar 2019 May 2019 Jun 2019 Aug 2019 Sep 2019 Nov 2019 Dec 2019 Feb 2020 Mar 2020 May 2020 Jun 2020 Aug 2020- Cyprus - maturity 4/11/20251 Italy maturity 01/12/20251 Portugal maturity 15/10/20251 Greece maturity 30/01/20282 Spain - maturity 31/10/20251 30/01/2028 was used and normalised against the closest maturity of German Government bond (DBR) 15/08/2027 42#43Economy deeply impacted by Covid-19 in the second quarter Economic sentiment dropped steeply in the second quarter as Covid-19 infections peaked Tourism arrivals for 1H2020 down 84% yoy (mn) 19.8 Economic Sentiment Indicator (ESI) - % change y-o-y 40.0 30.0 20.0 10.0 0.0 -10.0 -20.0 -30.0 -40.0 3.9 4.0 3.7 3.2 2.7 2.5 2.4 2.4 2.4 -0.3 -5.4 -29.6 2011-Q1 2011-Q3 2012-Q3 2012-Q1 Cyprus Euro Area 2014-Q1 2015-Q3 2013-Q1 2013-Q3 2014-Q3 2015-Q1 2016-Q1 2016-Q3 2017-Q1 2017-Q3 2018-Q1 Leading indicators reflect the steep decline of 2Q2020 Leading indicators: 3 month moving averages % changes y-o-y -33.2 2018-Q3 2019-Q1 2019-Q3 2020-Q1 100.0 80.0 60.0 40.0 20.0 0.0 -20.0 -40.0 -60.0 -80.0 12.11 03.12 06.12 10.12 12.12 03.13 06.13 New vehicles $09.13 12.13 03.14 06.14 10.149 12.14 03.15 06.15 Non-food sales 10.15 12.15 03.16 SOURCES; Statistical Service of Republic of Cyprus, Eurostat; Calculations by BOC Economic Research Bank of Cyprus Holdings -84% 1.6 Group Financial Results for the six months ended 30 June 2020 Tourism: % changes yoy Total arrivals (% change) Total receipts (% change) 14.6 11.9 11.7 7.8 2.7 0.3 -91.0 2011 2012 2013 2014 2015 2016 2017 2018 2019 1H 1H 2019 2020 2016 2017 2018 2020 Jun yoy 09.16 12.16 03.17 Property sales 06.17 09.17 12.17 03.18 06.18 S 09.18.09 12.18 03.19 06.19 Building permits vol 09.19 12.19 03.20 06.20 -84.0 Support from key business enablers Corporate tax rates - 2019 Level of education 2019, age 15-64 Cyprus has the highest number of university graduates in the population in the EU after Ireland, at par with UK 12.5% 12.5% 19.0% 21.3% Less than Upper secondary 21.0% 24.0% Upper and post- 38.5% secondary, non- 25.0% tertiary 28.0% 40.2% Tertiary 30.0% 31.0% 43#44Covid-19 Recent Developments Bank of Cyprus Holdings Group Financial Results for the six months ended 30 June 2020 44#45Group Financial Results for the six months ended 30 June 2020 Timely and strong response by the Government of Cyprus Key Highlights: • Immediate introduction of fiscal measures1 • Liquidity support to businesses and households Prevention of sharp rise in unemployment • A large and wide-ranging package of financial measures • €3.0 bn of funding raised in April 2020; vote of confidence to the Cypriot economy • Issuance of €1.75 bn of 7 year and 30 year Eurobonds Issuance of €1.25 bn of 52-week treasury bills Measures announced in March 2020 include: • Moratorium of loan instalments for 9 months • Capital and interest • Available for all customers (businesses and private individuals) with less than 30 days past due as at 29 Feb 2020 Suspension of the added contribution to the National Health System for 3 months Employment compensation schemes for businesses impacted by COVID-19, to protect jobs and avoid layoffs >50% of private sector employees (220,000) and c.40,000 self- employed workers expected to benefit Additional measures announced in May 2020 include: Liquidity support to small business and self employed . • covering part of the operating expenses like rent, supplier payments, etc >36,000 small businesses and self employed expected to benefit Tax incentives for the reduction of rent, on a voluntary basis Liquidity support to agricultural businesses • Temporary suspension of VAT payments for 3 months² (1) For further information, please refer to the Market Update published by the Ministry of Finance: https://www.mof.gov.cy/mof/pdmo/pdmo.nsf/6B8C5026F3AE168BC2258345003BAFEF/$file/Market%20Communication%2006%20April%202020.pdf (2) For tax periods ending February, March and April, 2020. It involves all companies, without imposing any charges or additional tax. It is noted that arrangements will be made so that the debts will be paid progressively until November 10, 2020 with the exception of companies that do not have liquidity problems such as pharmacies, supermarkets, etc. Bank of Cyprus Holdings 45#46Subsidy of interest rate on new business and housing loans Group Financial Results for the six months ended 30 June 2020 1. Subsidy of interest rate of new Business Loans Subsidy of interest rate for new loans to self employed and businesses that were not "problematic”1 as at 31 December 2019 and were negatively impacted by COVID-19 Subsidised new loans for working capital needs and investments only (not be used to repay existing ones) Subsidy of interest rate for 4 years as follows: ○ up to 3.5% in the first two years 。 2% for SMEs and 1.5% for large corporates in years 3-4 Restriction so that staff reduction shall not exceed 2% of total employees as at the date of the Plan announcement (28 May 2020) Total aid per business must not exceed €800,000 • No ceiling on the loan amount Loan amount for which interest rate is subsidized cannot exceed: o The double of the annual wage bill of the business or 。 25% of the total turnover of the business in 2019 • Applicable to new business loans granted between 1 March 2020 and 31 December 2020 • Scheme subject to approval by European Commission 2. Subsidy of interest rate of new Housing Loans • Government subsidy of interest for 4 years up to 1.5% • Loan amount for which interest rate is subsidized cannot exceed €300,000 • Applicable to new housing loans granted between 1 March 2020 and 31 December 2020 • New housing loans cannot be used to repay existing ones 1) As defined in Article 2 (18) of the Commission Regulation (EU) No 651/2014; Please refer to https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32014R0651 Bank of Cyprus Holdings 46#47Additional governmental measures to enhance liquidity Group Financial Results for the six months ended 30 June 2020 • 3. Pan-European Guarantee Fund Liquidity support to businesses that employ up to 3,000 employees, through the Pan-European Guarantee Fund of EIB Group for an amount up to €300 mn- €400 mn¹ • Fund guarantee to the banks of up to 80%¹ • The Fund will become operational once the Member States of EU accounting for at least 60% of the total EIB capital (€25 bn) have signed their contribution agreements 4. Financing of SMEs through CYPEF2 Liquidity support of up €800 mn to SMEs via 50%-50% risk sharing between the Government and the participating banks Eligible businesses are SMEs with up to 250 employees • Loan amount should not exceed €1.5 mn and duration of loan should not exceed 12 years • Low Interest rates will vary subject to the risk profile of client: o 2.55%-3.85% for low risk clients 。 3.375%-4.5% for high risk clients 5.Government Guarantee to EIB • Plan already in place since 2014 Injection for an additional funding of €500 mn Businesses with up to 3,000 employees, registered and operating in Cyprus are eligible Reduction of interest rates by at least 0.5% due to EIB participation Additional 0.5% reduction in interest rate for businesses in compliance with "jobs for youth" criteria Loan duration of up to 12 years 1) In accordance with the press release of Ministry of Finance dated 28 May 2020 2) The Cyprus Enterprise Fund Bank of Cyprus Holdings 47#48APPENDIX Additional asset quality slides Group Financial Results for the six months ended 30 June 2020 48#49€0.9 bn NPE Trade Delivers Accelerated Risk Reduction €898 mn Helix 2 portfolio (€ mn) Group Financial Results for the six months ended 30 June 2020 Performing Re-performing NPES/ 898 12 50 30 June 2020 Assets sold Contractual Loans² Gross Loans of which NPES € mn 1.478 Receipts Consideration € mn 422 898 of which: 886 Cash 148 Retail 475 Provisions Held (479) - Deferred Purchase Price 274 €886 m n NPES Other³ 34 Transaction Costs and other adjustments (37) Consideration net of transaction costs and Carrying Value of assets being sold 453 385 other adjustments SMES 259 P/L Impact: (68) Corporate 102 Jun 20 Contractual balance² of €1.48 bn as at 30 June 2020 • Portfolio comprises 22,224 loans, mainly to Retail and SME clients, secured over 5,616 real estate collaterals . Completion remains subject to a number of customary regulatory and other approvals, currently estimated to occur in the 1H2021 (1) In pipeline to exit NPES subject to meet all exit criteria; the analysis is performed on a customer basis (formerly called Non-core NPEs) (2) The difference between the contractual balance and the GBV relates to IFRS adjustments/unrecognised income and non-contractual write-offs (3) DFAs and cash already received by 30 June 2020 Bank of Cyprus Holdings 49#50Foreclosures resume on 1 September 2020 Group Financial Results for the six months ended 30 June 2020 Cumulative 2016-20181 FY2019 1H2020 1Q2019 2Q2019 3Q2019 4Q2019 1Q2020 2Q2020 Foreclosures commenced² 1,437 1,829 5933 330 527 436 536 5933 Auctions held 470 807 1643 82 163 189 373 1643 • • Following COVID-19 outbreak, foreclosure process suspended until 31 August 2020, in line with the latest decision of the Association of Cyprus Banks In July 2019 the Parliament has voted through certain changes to the foreclosure law which, in the most part, seek to: - Provide additional checks and balances where banks are seeking to foreclose small loans (<€350k) secured by a Principal Primary Residence, and Extend the foreclosure timetable by extending various notice periods These amendments were passed into law in June 2020 The amendments extend the foreclosure process by c.1 month to c.9 months (1) Excluding Helix (2) The foreclosure process is considered to have commenced upon serving notice to the mortgagor (3) Foreclosures commenced and auctions held up to ACB announcement suspending foreclosures until 31 August 2020 Bank of Cyprus Holdings 50#51Group Financial Results for the six months ended 30 June 2020 ESTIA- Government scheme for the resolution of NPEs backed by primary residence Estia eligible¹ €801 mn ΕΣΤΙΑ € mn Non applicants Applicants 471 330 • Clear definition of socially protected borrowers Resolution part of ESTIA- eligible¹ portfolio Identification of non-viable (vulnerable) customers Facilitates resolution of remaining customers mainly through consensual and non consensual foreclosures Application period ended 31 July 2020 Participants: €61 mn³ Restructured loans will exit NPE definition in accordance with the NPE exit criteria² Non viable: €45 mn³ 224 45 45 • Government solution under consideration Other: €695 mn³ 61 . • • Covered by 60% by allowance for expected loan credit losses Enforcement measures initiated for non Estia applicants Incomplete/Under review Non viable Participants • Coverage: 60% (1) ESTIA-eligible portfolio refers to the potentially eligible portfolio based on the Bank's available data (2) Please refer to slide 78 for the NPE forborne exit criteria (3) Data available as at 24 August 2020 Bank of Cyprus Holdings Focus on realizing collateral via consensual and non-consensual foreclosures On-board assets in REMU at conservative c.25%-30% discount to open market value 51#52Group Financial Results for the six months ended 30 June 2020 Core NPE risk reduced to €2.28 bn pro forma for Helix 22; 63% cash covered Core NPEs reduced to €2.28 bn pro forma for Helix 22 13.97 € bn 1 Re-performing NPES 2.61 Core NPES 11.36 3.88 3.74 3.47 0.43 0.36 3.45 3.38 .0.35. 3.12 Core NPES € bn Retail 2.59 3.07 SMEs Dec 15 Dec 19 Mar 20 Jun 20 11.36 5.70 Corporate Corporate 0.47 0.66 SMES 3.38 2.25 Retail (1) In pipeline to exit NPEs subject to meet all exit criteria; the analysis is performed on a customer basis (formerly called Non-core NPEs) (2) Calculations on a pro forma basis assume completion of the transaction Bank of Cyprus Holdings 2.04 Retail Corporate 0.47 3.12 0.61 SMES 2.58 0.30 2.28 Jun 20 pro forma for Helix 2² 1.56 Retail Corporate 0.37 2.28 0.35 SMES 52#53Continuous progress across all segments Focus shifts to Retail and SME after intense Corporate attention € mn 2,582 Corporate Dec 19 Inflows Exits (87) Jun 20 639 Corporate 461 €525 mn Helix 2 Pro-forma for Helix 21 (114) 525 Terminated Corporate 64 SME 151 SME €409 mn Terminated SMEs 258 Retail 477 Terminated Retail 1,171 €1,648 mn Jun 2020 pro forma for Helix 2¹ (1) Calculations on a pro forma basis assume completion of the transaction Bank of Cyprus Holdings Group Financial Results for the six months ended 30 June 2020 722 NPE ratio NPE coverage NPE total coverage Jun 2020 Pro forma¹ 11% 58% 112% Jun 2020 Pro forma¹ Dec 19 Inflows Exits Jun 20 6 (44) 727 NPE ratio 26% 689 NPE coverage 58% Helix 2 (280) Pro forma for NPE total coverage 124% 409 Helix 2 Retail Dec 19 Inflows Exits Velocity 2 Jun 2020 Pro forma1 2,431 14 NPE ratio 31% (172) (133) NPE coverage Jun 20 2,140 ➤ Retail Housing 53% Helix 2 (492) Pro form a for 1,648 ➤ Retail Other 66% Helix 2¹ NPE total coverage 130% 53#54Gross loans and NPEs by Customer Type Gross loans by customer type (€ mn) 15,900 1,795 12,822 12,709 12,491 4,068 11,593 1,875 1,870 1,710 1,508 2,977 4,077 4,068 4,060 3,762 1,922 1,914 1,863 1,579 7,060 2,209 2,186 2,203 2,203 2,739 2,671 2,655 2,541 Dec 18 Dec 19 Mar 20 Jun 20 Jun 20 NPEs by customer type (€ mn) pro forma for Helix 2 1 7,419 982 1,490 1,759 3,880 3,738 3,468 1,043 1,026 878 2,582 1,388 1,326 678 1,262 3,188 970 727 724 689 164 159 147 409 558 503 492 378 147 1 Dec 18 Retail other Retail Housing SMEs Global Corporate Dec 19 Mar 20 Jun 20 Jun 20 pro forma for Helix 2 Corporate (1) Calculations on a pro forma basis assume completion of the transaction Bank of Cyprus Holdings 1 Group Financial Results for the six months ended 30 June 2020 54#55NPE Coverage and Total coverage by segment Coverage and collateral maintained post Helix 22 Group Financial Results for the six months ended 30 June 2020 Tangible Collateral¹ Allowance for expected loan credit losses Corporate €378 m n Global Corporate: €147 mn SME €409 m n Retail-Housing €970 mn Retail-Other €678 mn Total €2,582 m n 142% 142% 137% 134% 131% 133% 134% 128% 127% 127% 124% 124% 124% 125% 123% 122% 124% 125% 118% 118% 104% 106% 107% 63% 63% 100% 65% 64% 83% 59% 69% 71% 70% 66% 82% 81% 57% 69% 83% 54% 53% 68% 68% 67% 53% 54% 54% 50% 79% 79% 69% 63% 51% 52% 53% 50% 53% 54% 58% 58% 64% 65% 66% 66% 48% 51% 54% 53% 54% 56% 59% 58% Dec 19 Mar 20 Jun 20 Jun 20 pro forma Dec 19 Mar 20 Jun 20 Jun 20 2 pro forma Dec 19 Mar 20 Jun 20 Jun 20 pro forma 2 (1) Restricted to Gross IFRS balance (2) Calculations on a pro forma basis assume completion of the transaction Bank of Cyprus Holdings Dec 19 Mar 20 Jun 20 Jun 20 pro forma 2 Dec 19 Mar 20 Jun 20 Jun 20 pro forma 2 Dec 19 Mar 20 Jun 20 Jun 20 pro forma² 55#56Asset quality- NPE analysis Group Financial Results for the six months ended 30 June 2020 (€ mn) Jun-20 Mar-20 Dec-19 Sep-19 Jun-19 Mar-19 Dec-18 A. Gross Loans after Residual Fair value adjustment on initial recognition 12,243 12,457 12,551 12,757 12,782 15,437 15,438 Residual Fair value adjustment on initial recognition 248 252 271 278 290 445 462 B. Gross Loans 12,491 12,709 12,822 13,035 13,072 15,882 15,900 B1. Loans with no arrears 8,954 8,706 8,820 8,794 8,565 8,402 8,260 B2. Loans with arrears but not NPES 69 265 122 156 195 207 221 1-30 DPD 54 209 88 119 150 138 166 31-90 DPD 15 56 34 37 45 69 55 B3. NPES With no arrears Up to 30 DPD 31-90 DPD 91-180 DPD 3,468 3,738 3,880 4,085 4,312 7,273 7,419 603 601 722 802 949 1,356 1,482 28 52 54 69 89 108 136 39 72 76 86 125 183 231 48 79 121 159 149 240 178 181-365 DPD 178 255 263 251 225 316 393 Over 1 year DPD 2,572 2,679 2,644 2,718 2,775 5,070 4,999 NPE ratio (NPEs / Gross Loans) 28% 29% 30% 31% 33% 46% 47% Allowance for expected loan credit losses (including residual fair value adjustment on initial recognition ¹) Gross loans coverage 2,043 2,109 2,096 2,086 2,145 3,846 3,852 NPES coverage 16% 59% 17% 16% 16% 16% 24% 24% 56% 54% 51% 50% 53% 52% (1) Comprise (i) loan credit losses for impairment of customer loans and advances, (ii) the residual fair value adjustment on initial recognition of loans acquired from Laiki Bank and on loans classified at FVPL, and (iii) loan credit losses on off-balance sheet exposures disclosed on the balance sheet within other liabilities Bank of Cyprus Holdings 56#57Bank of Cyprus Holdings Trade 45% 31% 31% 31% 49% 2.04 1.85 1.36 1.38 1.31 99.0 Trade Manufacturing NPE ratio by economic activity 53% 52% 27% 27% 26% 32% 28% % of total 11% 0.64 0.47 0.46 0.45 Gross loans by economic activity (€ bn) 1.39 1.27 1.08 1.10 1.13 Hotels & Restaurant Construction 34% 76% 68% 33% 31% 33% 53% 23% 22% 21% Analysis of gross loans and NPE ratio by Economic activity 3% 9% 7% 10% 2.34 1.95 0.85 0.83 0.82 1.61 1.29 1.28 3.20 1.28 Real Estate ■31.12.17 Private Individuals ■31.12.18 ■31.12.19 Manufacturing Hotels and Catering Construction Real estate Private individuals Professional and Other sectors other services 45% 43% 37% 36% 34% 52% 46% 31% 32% 31% 6.77 31.12.17 ■31.12.18 ■31.12.19 31.03.20 30.06.20 47% 6.47 6.02 6.01 5.89 1.31 1.20 1.00 0.89 0.86 Professional and other services ■ 31.03.20 Other sectors ■30.06.20 34% 51% 17% 15% 14% 57 1.04 0.91 0.75 0.76 0.75 7% 6% Group Financial Results for the six months ended 30 June 2020#58Group Financial Results for the six months ended 30 June 2020 Balance sheet de-risking results in a smaller but safer loan book Net Loans: Non-legacy 2 vs Legacy Interest Income on Loans: Non-legacy 2 vs Legacy € mn € bn 15.62 14.55 36% 5.64 12.04 4.40 10.73 105 10.60 10.45 101 10.10 98 96 93 3.39 1.79 1.68 1.52 1.17 12% 27 29 87 29 23 24 24 18 12 64% 9.98 10.15 8.65 8.94 8.92 8.93 8.93 88% 74 76 75 15 75 72 55 75 75 Dec 16 Dec 17 Dec 18 Dec 19 Mar 20 Jun 20 Jun 20 2Q2019 Legacy Non-legacy pro forma for Helix 21 Legacy 3Q2019 Non-legacy 4Q2019 1Q2020 2Q2020 2Q2020 pro forma for Helix 2¹ . Lower but higher quality income resulting from balance sheet de-risking • Interest Income of non-legacy book increased by €3 mn qoq, despite the sustained low interest rate environment Interest Income of legacy book decreased by €6 mn qoq mainly due to increased cash collections of €4 mn not previously recognized in 1Q2020 • Interest on Net NPEs not received in cash, fully provided • Lending rates remain under pressure due to the sustained low interest rate environment (1) Calculations on a pro forma basis assume completion of the transaction (2) Gross loans as at 30 June 2020 of Corporate (incl. IB and W&M and Global Corporate), SME, Retail, Insurance and H/O Bank of Cyprus Holdings 58#59Profitability Capital & balance Sheet Risk adjusted yield will rise as Legacy book reduces Non- Legacy Legacy Group 1H2020 1H2020 1H2020 • Interest Income on loans (€ mn) (pre FTP) 147 42 189 Loan credit losses (€ mn) (10) (77) (87) Interest Income net of loan credit 137 losses (€ mn) (35) 102 • Cost of Risk 0.23% 4.39% 1.39% Effective Yield Risk adjusted Yield¹ 3.31% 5.09% 3.59% 3.07% (4.23%) 1.93% Group Financial Results for the six months ended 30 June 2020 • Non-Legacy Book is expected to grow and to increasingly drive Group results Legacy book revenues predominantly driven by loan credit losses unwinding (but offset via loan credit losses) Interest on Net NPEs not received in cash, fully provided (€18 mn in 2Q2020) As Legacy book reduces: Group risk adjusted yield expected to rise Group Risk intensity expected to fall supporting CET1 ratio build Average Net Loans (€ mn) 8,930 1,661 10,591 . RWA Intensity² 48% 106% 56% Global corporate, Corporate RRD IB, W&M (1) Interest Income on loans net of allowance for expected loan credit losses/ Average Net Loans (2) Risk Weighted Assets over Total Assets Bank of Cyprus Holdings SME and Retail Banking Insurance and H/O REMU Overseas non core 59#60Bank of Cyprus Holdings 17% 16% 16% 31% Rescheduled Loans Rescheduled loans by customer type (€ bn) 4.89 Rescheduled loans % gross loans by customer type 15% 1.17 0.47 2.73 2.58 1.01 2.35 0.97 0.94 0.88 0.44 0.42 0.38 2.24 0.53 0.52 0.50 0.34 0.27 0.16 0.45 0.43 0.43 Dec 18 Retail housing Dec 19 Mar 20 Jun 20 Retail other SMEs Global Corporate Corporate 12% 7% 34% 28% 27% 27% 29% 24% 23% 22% 26% 23% 23% 22% FVPL Total Corporate Global Corporate SMEs Retail Housing Retail Consumer Dec 18 Mar 20 Dec 19 Jun 20 Rescheduled loans-Asset Quality 30 June 2020 Stage 1 Stage 2 Stage 3 POCI € '000 235,719 304,376 1,486,455 200,944 117,543 2,345,037 60 60 Group Financial Results for the six months ended 30 June 2020#61Group Financial Results for the six months ended 30 June 2020 REMU: €1.28 bn sales of 1,754 properties across all property classes since set-up in Jan 2016 Sales since Real Estate Management Unit set-up Sales contract prices¹ (€ mn) Breakdown of cumulative sales¹ # 99 179 # 331 # 575 # 5792 # 170 by on-boarding year (€ mn) Sales €1.28 bn Legacy 3 505 296 2016 2017 2018 2019 555 326 99 3 €1,279 160 % Sales of vintage stock (BV)4 58% 46% 49% 28% 330 238 345 27 by property type 2016 2017 2018 2019 1H2020 Cyreit Sales # properties • Asset disposal strategy tackles both value and volume of assets • Asset disposals across all property classes • 58% of Legacy³ and 46% of 2016 book assets now sold . 36% of sales (by value) relate to land 7% 13% 10% 11% 23% Land 36% Commercial Hotels Residential Cyreit Overseas (1) Amounts as per Sales purchase Agreements (SPAs) (2) Number of properties sold include 21 properties from the disposal of Cyreit and 23 properties from NPE sale (Helix) (3) Legacy properties relate to properties that were on-boarded before REMU set-up in January 2016 Bank of Cyprus Holdings (4) The BV of the properties disposed at the date of disposal as a proportion of the: BV of the properties disposed at the time of the disposal plus the BV of the residual properties managed by REMU as at 30 Jun 2020 61#62REMU - the engine for dealing with foreclosed assets Total Book Value Sales of €10 mn for 2Q2020 REMU focuses now on sales BV € mn € mn 160 88 Group Financial Results for the six months ended 30 June 2020 Investment Properties 1,490 30 (24) (29) 1,456 (11) 112 112 62 67 48 1,378 1,344 14 10 2Q2019 3Q2019 4Q2019 Cyreit Nicosia 1Q2020 2Q2020 Mall Properties managed by REMU Additions Sales as at 01 Jan 2020 Encouraging trends in Real Estate Market; property prices up 1.8% in 1Q20203 Properties managed by REMU as at 30 Jun 20201 Sales contracts (excl. DFAs) in 1H2020 down 41% yoy 4 reflecting COVID-19 lockdown Impairment loss & fair value losses Transfer to non- current assets and disposal groups held for sale 110.0 90.0 70.0 50.0 30.0 4.0 Central Bank Residential Property Price index 2.2 1.8 2.0 78.3 78.6 0.0 00 -2.0 10.366 9.242 8.734 -41% 5.885 5.560 3.272 4.481 -4.0 Q42015 Q22016 Residential Propert Price index (2010Q1=100) Q42016 Q22017 Q42017 Q42018 Q22019 Q42019 % change y-o-y (RHS) 2008 2009 2010 2011 2012 2013 2014 2015 2016 Sales to Cypriots Sales to non-Cypriots 2017 2018 2019 1H20191H2020 (1) In addition to assets held by REMU, properties classified as "Investment properties" with carrying value of €23 mn as at 30 June 2020 relate to legacy properties (2) Stock of property with a carrving value of €11 mn as at 30 June 2020 was transferred to non-current assets and disposal groups held for Bank of Cyprus Holdings sale as it was included in the Helix 2 portfolio (3) Based on Residential price index published by Central Bank, dated 19 August 2020 (4) Based on data from Land of Registry- Sales contracts 62#63APPENDIX Additional financial information Group Financial Results for the six months ended 30 June 2020 63#64Consolidated Balance Sheet Group Financial Results for the six months ended 30 June 2020 Assets (€ mn) 30.06.2020 Cash and balances with Central Banks 5,276 31.12.2019 change Liability and Equity (€ mn) 30.06.2020 31.12.2019 change 5,060 4% Deposits by banks 406 533 -24% Loans and advances to banks 622 321 94% Funding from Central Bank 1,000 Debt securities, treasury bills and equity investments 1,999 1,906 5% Repurchase agreements 123 168 -27% Net loans and advances to customers 10,104 10,722 -6% Customer deposits 16,303 16,692 -2% Stock of property 1,344 1,378 -2% Subordinated loan stock 261 272 -4% Investment properties 134 136 -2% Other liabilities 1,158 1,169 -1% Other assets 1,519 1,574 -4% Total liabilities 19,251 18,834 2% Non current assets and disposal groups classified as held for sale Shareholders' equity 1,875 2,040 -8% 373 26 Total assets 21,371 21,123 1% 16 Other equity instruments 220 220 Total equity excluding non- 2,095 2,260 -7% controlling interests Non controlling interests 25 29 -13% Total equity 2,120 2,289 -7% Total liabilities and equity 21,371 21,123 1% Bank of Cyprus Holdings 64#65Core Cypriot business Market shares¹ Loans Deposits Group Financial Results for the six months ended 30 June 2020 Strong market shares in resident and non-resident deposits Residents Non-residents 45.4% 41.3% 41.1% 41.0% 41.7% 37.5% 37.1% 35.8% 37.3% 38.8% 38.3% 34.7% 35.8% 35.3% 35.7% 36.0% 34.7% 35.0% 32.8% 35.1% 34.8% 34.1% 35.3% 34.6% 34.9% 34.7% 34.8% 31.1% 31.5% 29.5% Dec 16 Dec 17 Dec 18 Jun 19 after Helix Dec 19 Mar 20 Jun 20 Dec 16 Dec 17 Jun 18 Dec 18 Sep 19 Dec 19 Mar 20 Jun 20 Average contractual interest rates (bps) (Cy) Yield on Loans Cost of Deposits Customer spread Customer deposit rates decline further (bps) (Cy) Time & Notice accounts Savings and Current accounts Cost of deposits 41 32 24 19 16 11 8 475 468 460 413 402 396 392 384 77 434 436 436 389 383 380 381 376 58 47 39 33 33 19 24 41 32 24 24 19 16 11 8 1 1 1 1 1 Ο 4Q2018 1Q2019 2Q2019 2Q2019 3Q2019 4Q2019 1Q2020 2Q2020 4Q2018 1Q2019 2Q2019 3Q2019 4Q2019 1Q2020 2Q2020 (excluding Helix) (1) The market share on loans was affected as from 30 September 2018 following a decrease in total loans in the banking sector, mainly attributed to €6 bn non-performing loans of Cyprus Cooperative Bank (CyCB) which remained to SEDIPES (a legal entity without license to operate as a credit institution) as a result of the agreement between CyCB and Hellenic Bank Bank of Cyprus Holdings 65#66Income Statement bridge¹ for 1H2020 € mn Net interest income Net fee and commission income Net foreign exchange gains and net gains on financial instrument transactions and disposal/dissolution of subsidiaries and associates Insurance income net of claims and commissions Net gains from revaluation and disposal of investment properties and on disposal of stock of properties Other income Total income Total expenses Operating profit Loan credit losses Impairments of other financial and non-financial instruments Provisions for litigation, claims, regulatory and other matters Loss before tax and non-recurring items Tax Profit attributable to non-controlling interests Loss after tax and before non-recurring items (attributable to the owners of the Company) Advisory and other restructuring costs - organic Loss after tax - Organic (attributable to the owners of the Company) Provisions/net loss relating to NPE sales, including restructuring expenses Loss after tax attributable to the owners of the Company (1) Please refer to section B1 "Reconciliation of income statement between statutory and underlying basis of the Group Financial Results for the six months ended 30 June 2020 Bank of Cyprus Holdings Group Financial Results for the six months ended 30 June 2020 Underlying basis NPE sales Other Statutory Basis 168 168 71 71 29 22 0 % 12 15 29 0 8 288 3 291 (180) (16) (10) (206) 108 (16) (7) 85 (87) (91) (3) (181) (29) (29) (4) 4 (12) (107) (6) (125) (5) (5) 4 4 (13) (107) (6) (126) (6) 6 (19) (107) (126) (107) 107 (126) (126) 99 66#67Analysis of Interest Income and Interest Expense Analysis of Interest Income (€ mn) 2Q20191 3Q2019 4Q2019 1Q2020 2Q2020 Loans and advances to customers 101 105 98 96 93 Loans and advances to banks and central banks 2 1 1 0 0 Investment at amortised costs 3 3 3 3 2 Investments FVOCI 5 6 5 5 4 Investments classified as loans and receivables 111 115 107 104 99 Trading Investment Derivative financial instruments 9 9 10 9 6 Other investments at fair value through profit or loss Total Interest Income 120 124 117 113 108 Analysis of Interest Expense (€ mn) Customer deposits (10) (8) (8) (5) (3) Funding from central banks and deposits by banks (1) (1) (0) (0) (0) Subordinated loan stock (6) (6) (6) (6) (6) Repurchase agreements (2) (2) (2) (1) (1) Negative interest on loans and advances to banks and central banks (4) (5) (5) (4) (4) (23) (22) (21) (16) (14) Derivative financial instruments (12) (12) (12) (12) (11) Total Interest Expense (35) (34) (33) (28) (25) Group Financial Results for the six months ended 30 June 2020 (1) The interest income, non-interest income, staff costs, other operating expenses and loan credit losses related to Project Helix are disclosed under 'Provisions/net loss relating to NPE sales, including restructuring expenses' since they are considered one-off items Bank of Cyprus Holdings 67#68Income Statement by business line for 1H2020 Group Financial Results for the six months ended 30 June 2020 € mn Net interest income/(expense) Consumer SME Corporate Global International Wealth & Banking Banking Banking corporate RRD REMU Insurance Treasury Other Overseas Total Banking Markets 63 18 31 36 11 1 15 (7) 0 (1) 1 168 Net fee & commission income (expense) 19 4 5 5 23 1 4 (3) 1 12 - 71 Other income 1 - - 3 2 4 28 6 6 (1) 49 Total income 83 22 36 41 37 4 19 (3) 25 7 17 0 288 Total expenses (78) (10) (8) (6) (14) (3) (21) (4) (9) (7) (16) (4) (180) Operating profit/(loss) 5 12 28 35 23 1 (2) (7) 16 0 (4) 108 Loan credit losses of customer loans net of gains/(losses) on derecognition of loans and changes in expected cash flows 2 (1) (6) (15) 10 10 (66) (11) (87) Impairment of other financial and non financial I (26) (3) (29) instruments Provision for litigation, claims, regulatory and other matters Profit/(loss) before tax (4) (4) 7 11 Tax (1) (1) 23 22 20 (3) 23 33 1 (68) (33) 16 0 (3) (4) 8 4 (2) 33 (3) (18) (3) 25 (12) (5) Profit attributable to non controlling interest 3 1 . Profit/(loss) after tax - organic (attributable to the owners of the Company) 1 6 10 19 17 29 1 (60) (29) 14 0 (3) (17) (13) (1) Profit/(loss) after tax-organic (attributable to the owners of the Company) does not include provisions/net loss relating to NPE sales, including restructuring expenses (attributable to owners of the Company) Bank of Cyprus Holdings 68#69Group Financial Results for the six months ended 30 June 2020 Risk Weighted Assets - Regulatory Capital Risk weighted assets by Geography (€ mn) Reconciliation of Group Equity to CET1 31.12.18 31.12.19 31.03.20 30.06.20 Helix 2 30.06.20 pro forma² € mn 30.06.20 Cyprus 15,070 12,678 12,395 11,765 (112) 11,653 Group Equity per financial statements Less: Intangibles 2,120 (48) Russia 24 8 2 5 5 Less: Deconsolidation of insurance and other entities (201) United Kingdom 84 48 48 48 48 Add: Regulatory adjustments (IFRS 9 and other items) 85 Romania 38 29 28 21 21 Less: Revaluation reserves and other unrealised items CET 11 (249) 1,707 Greece 144 121 120 115 115 Risk Weighted Assets 11,960 Other 13 6 6 6 6 CET1 ratio 1 14.3% Total RWA 15,373 12,890 12,599 11,960 (112) 11,848 CET1 ratio pro forma for Helix 22 14.4% RWA intensity 70% 61% 62% 56% 55% Equity and Regulatory Capital (€ mn) Risk weighted assets by type of risk (€ mn) 31.12.2019 31.03.2020 30.06.20 30.06.20 31.12.18 31.12.19 31.03.20 30.06.20 Helix 2 pro forma² Total equity excl. non-controlling interests 2.260 2,207 2,095 Credit risk 13,833 11,547 11,256 10,617 (112) 10,505 CET1 capital 1,909 1,807 1,707 Market risk 2 Tier I capital 2,129 2,027 1,927 Operational risk 1,538 Total 15,373 1,343 12,890 1,343 12,599 1,343 11,960 1,343 Tier II capital 190 201 199 (112) 11,848 Total regulatory capital (Tier | + Tier II) 2,319 2,228 2,126 (1) Allowing for IFRS 9 transitional arrangements (2) Calculations on a pro forma basis assume completion of the transaction Bank of Cyprus Holdings 69#70Group Financial Results for the six months ended 30 June 2020 SREP requirement for 2020 at 9.7%, post ECB's capital relaxations for COVID-19 SREP requirements for 2020: CET1 ratio at 9.7% SREP requirements for 2020 Total Capital ratio at 14.5% O-SII 1 10.5% 0.5% 11.0% 1.0% 14.0% O-SI|1 0.5% CCB2 2.5% 14.5% 1.0% 2.5% 9.7% CCB 2 2.5% 2.5% 1.0% Pillar 2R 3.0% 3.0% 2.5% Pillar 2R 3.0% 3.0% Tier 2 2.0% 2.0% 1.7% AT1³ 1.5% 1.5% Total Pillar 1 4.5% 4.5% 4.5% Pillar 1 Pillar 1 of 8% 4.5% 4.5% 2019 2020 2020 post ECB announcement 2019 2020 • . Per EBA final guidelines on SREP and supervisory stress testing and the Single Supervisory Mechanism's (SSM) 2018 SREP methodology own funds held for the purposes of Pillar Il Guidance cannot be used to meet any other capital requirements (Pillar 1, Pillar Il requirement or the combined buffer requirements), and therefore cannot be used twice4 In May 2020, the Bank received formal notification from the CBC in its capacity as National Resolution Authority, of the final decision by the Single Resolution Board (SRB), for the binding minimum requirement for own funds and eligible liabilities (MREL) for the Bank, determined as the preferred resolution point of entry. The MREL requirement has been set at 28.36% of risk weighted assets as of 30 June 2019 and must be met by 31 December 2025. This MREL requirement would be equivalent to 18.54% of total liabilities and own funds (TLOF) as at 30 June 2019. The MREL requirement is in line with the Bank's expectations, and largely in line with its funding plans5 The MREL ratio of the Bank as at 30 June 2020, calculated according to SRB's eligibility criteria currently in effect, and based on our internal estimate stood at 18.21% of RWAs (1) The Central Bank of Cyprus (CBC) set the O-SII buffer for the Group at 2%. This buffer will be phased-in gradually, having started from 1 January 2019 at 0.5% and increasing by 0.5% every year thereafter, until being fully implemented (2.0%) on 1 January 2022. In April 2020 the CBC, as part of the COVID measures, decided to delay the phasing-in by 12 months (1 January 2023). As a result, the phasing-in of 0.5% on 1 January 2021 has been delayed for 12 months (2) In accordance with the legislation in Cyprus which has been set for all credit institutions the applicable rate of the CCB was fully phased in at 2.5% in 2019 Bank of Cyprus Holdings (3) Additional Tier 1 Capital (4) The new provisions are effective from January 2020 (5) This decision is based on the current legislation, it is expected to be updated annually and could be subject to subsequent changes by the resolution authorities, especially considering the developments of the Bank Recovery and Resolution Directive (BRRD) and its transposition into the local legislation 70#71Buffer to MDA Restrictions Level & Distributable Items¹ Maximum Distributable Amount for BOCH CET1 Ratios 14.3% c. 10.0% 425 bps 0.3% } 9.7% CET1 30 Jun 2020 30 Jun 20203 MDA Threshold Group Financial Results for the six months ended 30 June 2020 Unfilled AT1 + T2 capacity • The Bank and BOCH will proceed with a capital reduction process which will result in the reclassification of up to c.€619 mn and €700 mn of share premium to distributable reserves respectively • Subject to approvals by ECB, Cyprus and Irish High Court • No prohibition applies to the payment of coupons on any AT1 capital instruments issued by the Company and the Bank² • Significant CET1 MDA buffer³ (30 Jun 2020): ~425 bps (~€508 mn) ⚫ECB frontloaded the ability to use AT1 and T2 to meet P2R requirement; increases CET1 and MDA buffer by c.131 bps CET1 Ratio (%) CET1 Req Unfilled AT1 & T2 Bucket [ ] bps Distance to MDA (1) Distributable Items definition per CRR (2) Based on the SREP decisions of prior years, the Company and the Bank were under a regulatory prohibition for equity dividend distribution and therefore no dividends were declared or paid during years 2019 and 2018. Following the 2019 SREP decision, the Company and the Bank are still under equity dividend distribution prohibition. This prohibition does not apply if the distributions are made via the issuance of new ordinary shares to the shareholders which are eligible as CET1 capital (3) Including phasing in of O-SII buffer (+50 bps). The Central Bank of Cyprus (CBC) set the O-SII buffer for the Group at 2%. This buffer will be phased-in gradually, having started from 1 January 2019 at 0.5% and increasing by 0.5% every year thereafter, until being fully implemented (2.0%) on 1 January 2022. In April 2020 the CBC, as part of the COVID measures, decided to delay the phasing-in by 12 months (1 January 2023). As a result, the phasing-in of 0.5% on 1 January 2021 has been delayed for 12 months Bank of Cyprus Holdings 71#72Analysis of Deposits Deposits by Currency (€ bn) Group Financial Results for the six months ended 30 June 2020 Jun 20 17.85 16.51 0.22 1.69 2.20 16.84 0.17- 16.69 16.25 16.30 2.11 0.29-0.11 0.29-0.10 1.48 1.29 0.29-0.10 0.27-0.10 1.74 1.28 1.31 8% 2% Other Currencies GBP 13.83 14.96 15.01 14.58 14.62 12.40 USD 90% EUR Dec 16 Dec 17 Dec 181 Dec 19 Mar 20 Jun 20 Deposits by Type (€ bn) 17.85 16.51 16.84 16.69 16.25 16.30 6.31 6.18 6.71 7.59 7.44 7.62 Current & demand accounts 42% 1.54 47% 1.06 1.35 1.57 1.65 1.76 9.27 10.00 8.78 Savings accounts Time deposits 7.53 7.16 6.92 11% Dec 16 Dec 17 Dec 181 Dec 19 Mar 20 Jun 20 Deposits by customer Sector (€ bn) 17.85 16.51 16.84 16.69 16.25 16.30 8.98 10.31 Retail SME 4% 29% 10.05 10.15 9.98 10.15 Corporate 5% 0.80 0.91 0.83 0.80 0.77 0.79 62% 6.73 6.63 5.96 5.05 Global Corporate 4.79 4.68 -0.69 -0.71- -0.68 Dec 16 Dec 17 Dec 181 Dec 19 Mar 20 Jun 20 (1) The reduction relates to the sale of BOC UK in Sep 18 Bank of Cyprus Holdings 72#73Reduction in Overseas Non-Core Exposures Overseas non-core exposures (€ mn) 518 44 149 312 42 31 240 79 11- 23 9 183 35 177 174 7 19 16 16 25 24 23 283 193 164 139 137 135 Dec 16 Greece Serbia Bank of Cyprus Holdings Dec 17 Dec 18 Romania Russia UK Dec 19 Mar 20 Jun 20 Group Financial Results for the six months ended 30 June 2020 • The Group continues its efforts for further deleveraging and disposal of non-essential assets and operations in Greece, Romania and Russia In addition as at 30 June 2020, there were €269 mn of overseas exposures in Greece (€265 mn at 31 March 2020) not identified as non-core exposures 73#74APPENDIX Glossary & Definitions Group Financial Results for the six months ended 30 June 2020 74#75Group Financial Results for the six months ended 30 June 2020 Glossary & Definitions Allowance for expected loan credit losses (previously 'Accumulated provisions') Advisory and other restructuring costs AIEA AT1 Average contractual interest rates Book Value CET1 capital ratio (transitional basis) CET1 fully loaded (FL) Cost of Funding Contribution to DGF Contribution to SRF Cost to Income ratio Cost of Risk CRR DD DFAs DFES DTA Comprises (i) allowance for expected credit losses (ECL) on loans and advances to customers (including allowance for expected credit losses on loans and advances to customers held for sale), (ii) the residual fair value adjustment on initial recognition of loans and advances to customers, (iii) allowance for expected credit losses for off-balance sheet exposures (financial guarantees and commitments) disclosed on the balance sheet within other liabilities, and (iv) the aggregate fair value adjustment on loans and advances to customers classified and measured at FVPL. Comprise mainly: fees of external advisors in relation to: (i) disposal of operations and non-core assets, and (ii) customer loan restructuring activities. This relates to the average of 'interest earning assets' as at the beginning and end of the relevant quarter. Average interest earning assets exclude interest earning assets of any discontinued operations at each quarter end, if applicable. Interest earning assets include: cash and balances with central banks, plus loans and advances to banks, plus net loans and advances to customers (including loans and advances to customers classified as non-current assets held for sale), plus investments (excluding equities and mutual funds). AT1 (Additional Tier 1) is defined in accordance with Articles 51 and 52 of the Capital Requirements Regulation (EU) No 575/2013, as amended by CRR II applicable as at the reporting date. Interest rates on cost of deposits were previously calculated as the Interest Expense over Average Balance. The current calculation which the Bank considers more appropriate is based on the weighted average of the contractual rate times the balance at the end of the month. The rates are calculated based on the month end contractual interest rates. The quarterly rates are the average of the three quarter month end contractual rates BV= book value = Carrying value prior to the sale of property CET1 capital ratio (transitional basis) is defined in accordance with the Capital Requirements Regulation (EU) No 575/2013, as amended by CRR II applicable as at the reporting date. The CET1 fully loaded (FL) ratio is defined in accordance with the Capital Requirements Regulation (EU) No 575/2013, as amended by CRR II applicable as at the reporting date. Effective yield of cost of funding: Interest expense of all interest bearing liabilities after hedging, over average interest bearing liabilities (customer deposits, funding from the central bank, interbank funding, subordinated liabilities). Historical information has been adjusted to take into account hedging. Relates to the contribution made to the Deposit Guarantee Fund. Relates to the contribution made to the Single Resolution Fund. Cost-to-income ratio comprises total expenses (as defined) divided by total income (as defined). Loan credit losses charge (cost of risk) (year to date) is calculated as the annualised 'loan credit losses' (as defined) divided by average gross loans (the average balance is calculated as the average of the opening balance and the closing balance). Default Definition. Debt for Asset Swaps. Debt for Equity Swaps. Deferred Tax Assets. Bank of Cyprus Holdings 75#76Group Financial Results for the six months ended 30 June 2020 Glossary & Definitions Digitally engaged customers ratio Digital transactions ratio DTC EBA ECB Effective yield Effective yield of liquid assets ESMA Foreclosures FTP GBV Gross Loans Gross Sales Proceeds GVA Group H/O IB, W&M This is the ratio of digitally engaged individual customers to the total number of individual customers. Digitally engaged customers are the individuals who use the digital channels of the Bank (mobile banking app, browser and ATMs) to perform banking transactions, as well as digital enablers such as a bank-issued card to perform online card purchases, based on an internally developed scorecard. This is the ratio of the number of digital transactions performed by individuals and legal entity customers to the total number of transactions. Transactions include deposits, withdrawals, internal and external transfers. Digital channels include mobile, browser and ATMs. Deferred Tax Credit European Banking Authority European Central Bank Interest Income on Loans/Average Net Loans Interest Income on liquids after hedging, over average liquids (Cash and balances with central banks, placements with banks and bonds). Historical information has been adjusted to take into account hedging European Securities and Markets Authority Value of on-boarded assets is set at a conservative 25%-30% discount from open market valuations, by two independent sources; Includes consensual and non consensual DFAs and DFES Fund transfer pricing methodologies applied between the business lines to present their results on an arm's length basis Gross Book Value Gross loans are reported before the residual fair value adjustment on initial recognition relating to loans acquired from Laiki Bank (calculated as the difference between the outstanding contractual amount and the fair value of loans acquired) amounting to €248 mn at 30 June 2020 (compared to €252 mn at 31 March 2020 and €271 mn at 31 December 2019). Additionally, gross loans include loans and advances to customers classified and measured at fair value through profit and loss adjusted for the aggregate fair value adjustment of €331 mn at 30 June 2020 (compared to €328 mn at 31 March 2020 and €427 mn at 31 December 2019). Proceeds before selling charge and other leakages Gross Value Added The Group consists of Bank of Cyprus Holdings Public Limited Company, "BOC Holdings" or the "Company", its subsidiary Bank of Cyprus Public Company Limited, the "Bank" and the Bank's subsidiaries. Head Office International Banking, Wealth and Markets Bank of Cyprus Holdings 76#77Group Financial Results for the six months ended 30 June 2020 Glossary & Definitions IBU Legacy exposures Loan credit losses (PL) (previously 'Provision charge') Loan to Value ratio (LTV) Market shares Net Proceeds Servicing exclusively international activity companies registered in Cyprus and abroad and not residents Legacy exposures are exposures relating to (i) Restructuring and Recoveries Division (RRD), (ii) Real Estate Management Unit (REMU), and (iii) non-core overseas exposures Loan credit losses comprise: (i) credit losses to cover credit risk on loans and advances to customers, (ii) net gains on derecognition of financial assets measured at amortised cost and (iii) net gains on loans and advances to customers at FVPL. Loan to Value (LTV) is calculated as the Gross IFRS Balance to the indexed market value of the property. Under Pillar 3 disclosures LTV is calculated as the Gross IFRS Balance to the indexed market value of collateral. Collateral takes into consideration the mortgage amount registered in the land registry plus legal interest from registration date to the reference date Both deposit and loan market shares are based on data from the CBC. The Bank is the single largest credit provider in Cyprus with a market share of 41.7% at 30 June 2020, compared to 41.0% at 31 March 2020, 41.1% at 31 December 2019, 40.8% at 30 September 2019, 41.3% at 30 June 2019, 46.7% at 31 March 2019, 45.4% at 31 December 2018 and as at 30 September 2018, 38.6% at 30 June 2018 and 37.4% at 31 March 2018. The market share on loans was affected as at 30 June 2019 following the derecognition of the Helix portfolio upon the completion of Project Helix announced on 28 June 2019. The market share on loans was affected during the quarter ended 31 March 2019 following a decrease in total loans in the banking sector of €1 bn, mainly attributed to reclassification, revaluation, exchange rate and other adjustments (CBC). The market share on loans was affected as at 30 September 2018 following a decrease in total loans in the banking sector, mainly attributed to €6 bn non-performing loans of Cyprus Cooperative Bank (CyCB) which remained to SEDIPES as a result of the agreement between CyCB and Hellenic Bank. The market share on loans was affected as at 30 June 2018 following a decrease in total loans in the banking sector of €2.1 bn, due to loan reclassifications, revaluations, exchange rate or other adjustments (CBC). Proceeds after selling charges and other leakages Net fee and commission income over total income Fee and commission income less fee and commission expense divided by total income (as defined). Net interest margin (NIM) Net loans and advances to customers Net loan to deposit ratio New lending Net interest margin is calculated as the net interest income (annualised) divided by the 'quarterly average interest earning assets' (as defined). Comprise gross loans (as defined) net of allowance for expected loan credit losses (as defined, but excluding credit losses on off-balance sheet exposures). Net loan to deposit ratio is calculated as gross loans (as defined) net of allowance for expected loan credit losses (as defined) divided by customer deposits New lending includes the average YTD change (if positive) for overdraft facilities. Bank of Cyprus Holdings 77#78Group Financial Results for the six months ended 30 June 2020 Glossary & Definitions Non-interest income Non-recurring items NPES Non-interest income comprises Net fee and commission income, Net foreign exchange gains and net gains on financial instrument transactions and disposal/dissolution of subsidiaries and associates (excluding net gains on loans and advances to customers at FVPL), Insurance income net of claims and commissions, Net gains/(losses) from revaluation and disposal of investment properties and on disposal of stock of properties, and Other income. Non-recurring items as presented in the 'Consolidated Condensed Interim Income Statement - Underlying basis' relate to the following items, as applicable: (i) advisory and other restructuring costs - organic, (ii) restructuring costs – Voluntary Staff Exit Plan (VEP), (iii) Provisions/net loss relating to NPE sales, including restructuring expenses, (iv) Loss on remeasurement of investment in associate upon classification as held for sale (CNP) net of share of profit from associates, and (v) Reversal of impairment of DTA and impairment of other tax receivables. According to the EBA standards and ECB's Guidance to Banks on Non-Performing Loans (published in March 2017), NPEs are defined as those exposures that satisfy one of the following conditions: (i) the borrower 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, (ii) defaulted or impaired exposures as per the approach provided in the Capital Requirement Regulation (CRR), which would also trigger a default under specific credit adjustment, distress restructuring and obligor bankruptcy, (iii) material exposures as set by the CBC, which are more than 90 days past due, (iv) performing forborne exposures under probation for which additional forbearance measures are extended, and (v) performing forborne exposures under probation that present more than 30 days past due within the probation period. When a specific part of the exposures of a customer that fulfils the NPE criteria set out above is greater than 20% of the gross carrying amount of all on balance sheet exposures of that customer, then the total customer exposure is classified as non-performing; otherwise only the specific part of the exposure is classified as non-performing. The NPEs are reported before the deduction of allowance for expected loan credit losses (as defined). The exit criteria of NPE forborne are the following: 1. The extension of forbearance measures does not lead to the recognition of impairment or default 2. One year has passed since the forbearance measures were extended 3. There is not, following the forbearance measures, any past due amount or concerns regarding the full repayment of the exposure according to the post forbearance conditions NPE coverage ratio (previously 'NPE Provisioning coverage ratio') NPE ratio NPES sales NSFR OMV Operating profit p.p. Non-legacy Phased-in Capital Conservation Buffer (CCB) Bank of Cyprus Holdings The NPE coverage ratio is calculated as the allowance for expected loan credit losses (as defined) over NPEs (as defined). NPEs ratio is calculated as the NPEs as per EBA (as defined) divided by gross loans (as defined). NPE sales refer to sales of NPE portfolios completed in each period and contemplated sale transactions, as well as potential further NPE sales, at each reporting date, irrespective of whether or not they met the held for sale classification criteria at the reporting dates. They include both Project Helix and Project Helix 2, as well as other portfolios. The NSFR is calculated as the amount of "available stable funding" (ASF) relative to the amount of "required stable funding" (RSF), on the basis of Basel III standards. Its calculation is a SREP requirement. The EBA NSFR will be enforced as a regulatory ratio under CRR II in 2021. Open Market Value Comprises profit before Total loan credit losses, impairments and provisions (as defined), tax, (profit)/loss attributable to non-controlling interests and non-recurring items (as defined). percentage points Relates to all business lines excluding Restructuring and Recoveries Division ("RRD"), REMU and non-core overseas exposures In accordance with the legislation in Cyprus which has been set for all credit institutions, the applicable rate of the CCB is 1.25% for 2017, 1.875% for 2018 and 2.5% for 2019 (fully phased-in). 78#79Glossary & Definitions Group Financial Results for the six months ended 30 June 2020 Loan credit losses for impairment of customer loans Profit/(loss) after tax and before non- recurring items (attributable to the owners of the Company) Profit/(loss) after tax - organic (attributable to the owners of the Company) Project Helix 2 qoq Restructured loans Risk adjusted yield RRD RWA RWA Intensity Special levy Stage 2 & Stage 3 Loans Tangible Collateral Total Capital ratio Total expenses Credit losses for impairment of customer loans and gains/(losses) on derecognition of loans and changes in expected cash flows on acquired loans This refers to the profit or loss after tax (attributable to the owners of the Company), excluding any 'non-recurring items' (as defined). This refers to the profit or loss after tax (attributable to the owners of the Company), excluding any 'non-recurring items' (as defined, except for the 'advisory and other restructuring costs - organic'). Project Helix 2 refers to the portfolio of loans with a gross book value of €898 mn as at 30 June 2020 for which an agreement for sale was reached on 3 August 2020. For further information please refer to section B.2.5 Loan portfolio quality of the press release. Quarter on quarter change Restructuring activity within quarter as recorded at each quarter end and includes restructurings of NPEs, performing loans and re-restructurings Interest Income on Loans net of allowance for expected loan credit losses/Net Loans Restructuring and Recoveries Division Risk Weighted Assets Risk Weighted Assets over Total Assets Relates to the special levy on deposits of credit institutions in Cyprus Include purchased or originated credit-impaired Restricted to Gross IFRS balance Total capital ratio is defined in accordance with the Capital Requirements Regulation (EU) No 575/2013, as amended by CRR II applicable as at the reporting date. Total expenses comprise staff costs, other operating expenses and the special levy and contributions to the Single Resolution Fund (SRF) and Deposit Guarantee Fund (DGF). It does not include 'advisory and other restructuring costs-organic', or any restructuring costs relating to the Voluntary Staff Exit Plan, or any restructuring costs relating to NPE sales. 'Advisory and other restructuring costs-organic' amounted to €3 mn for 2Q2020 (compared to €3 mn for 1Q2020 and €8 mn for 4Q2019). Restructuring costs relating to NPE sales amounted to €1 mn for 2Q2020 (compared to €3 mn for 1Q2020 and €10 mn for 4Q2019). Restructuring costs relating to the Voluntary Staff Exit Plan amounted to nil for 2Q2020 and 1Q2020, compared to €81 mn for 4Q2019. Bank of Cyprus Holdings 79#80Glossary & Definitions Group Financial Results for the six months ended 30 June 2020 Total income Total income comprises net interest income and non-interest income (as defined). Total loan credit losses, impairments and provisions Total loan credit losses, impairments and provisions comprises loan credit losses (as defined), plus impairments of other financial and non-financial assets, plus (provisions)/reversal of provisions for litigation, claims, regulatory and other matters. T2 Underlying basis Write offs yoy Bank of Cyprus Holdings Tier 2 Capital This refers to the statutory basis after being adjusted for certain items as explained in the Basis of Presentation. Loans together with the associated loan credit losses are written off when there is no realistic prospect of future recovery. Partial write-offs, including non-contractual write-offs, may occur when it is considered that there is no realistic prospect for the recovery of the contractual cash flows. In addition, write-offs may reflect restructuring activity with customers and are part of the terms of the agreement and subject to satisfactory performance. Year on year change 80#81Group Financial Results for the six months ended 30 June 2020 Disclaimer This document contains certain forward-looking statements which can usually be identified by terms used such as “expect”, “should be”, “will be” and similar expressions or variations thereof or their negative variations, but their absence does not mean that a statement is not forward-looking. Examples of forward-looking statements include, but are not limited to, statements relating to the Group's near term and longer term future capital requirements and ratios, intentions, beliefs or current expectations and projections about the Group's future results of operations, financial condition, expected impairment charges, the level of the Group's assets, liquidity, performance, prospects, anticipated growth, provisions, impairments, business strategies and opportunities. By their nature, forward-looking statements involve risk and uncertainty because they relate to events, and depend upon circumstances, that will or may occur in the future. Factors that could cause actual business, strategy and/or results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements made by the Group include, but are not limited to: general economic and political conditions in Cyprus and other European Union (EU) Member States, interest rate and foreign exchange fluctuations, legislative, fiscal and regulatory developments and information technology, litigation and other operational risks. Should any one or more of these or other factors materialise, or should any underlying assumptions prove to be incorrect, the actual results or events could differ materially from those currently being anticipated as reflected in such forward looking statements. The forward-looking statements made in this document are only applicable as from the date of publication of this document. Except as required by any applicable law or regulation, the Group expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward looking statement contained in this document to reflect any change in the Group's expectations or any change in events, conditions or circumstances on which any statement is based. Bank of Cyprus Holdings 81