#1Bank of Cyprus Group Group Financial Results For the year ended 31 December 2020 Bank of Cyprus Holdings KOINO WKYMPI WN اد#2DISCLAIMER Group Financial Results for the year ended 31 December 2020 The financial information included in this presentation is not audited by the Group's external auditors. 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. Forward Looking Statements 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, medium 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, information technology, litigation and other operational risks, adverse market conditions, the impact of outbreaks, epidemics or pandemics, such as the COVID-19 pandemic and ongoing challenges and uncertainties posed by the COVID-19 pandemic for businesses and governments around the world. 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. Important Notice Regarding Additional Information Contained in the Investor Presentation The presentation for the Group Financial Results for the year ended 31 December 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. Moreover, the Investor Presentation includes additional financial information not presented in the Results Announcement of current and expected medium term levels for (i) NPE coverage, (ii) growth of performing loan book, (iii) ratio of revenue over total assets, (iv) ratio of fee and commission over total assets, (v) ratio of total revenues over RWAs, (vi) market shares and total regular income or gross written premiums of insurance companies, (vii) restructuring expenses, (viii) cost to income ratio (excluding special levy and contributions to Single Resolution Fund and Deposit Guarantee Fund), and (ix) ESG performance metrics. 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 Bank of Cyprus Holdings Group Financial Results for the year ended 31 December 2020 3#42020 Achievements Successful navigation through the pandemic with clear priorities Bank of Cyprus Holdings • Protection of staff and customer health, while ensuring operational resilience of the Bank . c. €1.4 bn new lending to support the recovery of the Cypriot economy • Payment holidays until end of 2020 to >25k customers (€5.9 bn) Group Financial Results for the year ended 31 December 2020 Significant progress on balance sheet de-risking despite challenging environment • €2.1 bn NPEs reduction pro forma¹; €1.5 bn NPE sales and €0.6 bn organic Gross NPE ratio reduced to 16%1 (7%¹ net) and NPE coverage increased to 59%1, both pro forma RWA intensity reduced to 53% pro forma¹ Asset quality management throughout the pandemic • Provision of support to impacted customers to alleviate short term cash flow burden Close monitoring of loans in moratoria Encouraging performance since the end of moratorium (31 December 2020); €3.6 bn had an instalment due by 15 February 2021 and 95% of those resumed payments Careful cost management • Total operating expenses² in FY2020 down 12% yoy • C/I ratio at 60%² for FY2020, broadly flat yoy Digitally engaged customers increased to 75%, up 6 p.p. yoy Launch of New Strategic Plan and Medium Term Targets • Single digit NPE ratio by the end of 2022 • Return of Tangible Equity (ROTE) of c.7% 1) Pro forma for Helix 2 (Portfolio A and B). Calculations on a pro forma basis which assume legal completion of the transaction 2) Excluding Special Levy and contributions to SRF and DGF 4#54Q2020 - Highlights Positive Organic Performance in 4Q2020 €45 mn Operating Profit Operating Efficiency 64% Cost/Income² • . Group Financial Results for the year ended 31 December 2020 New lending of €374 mn in 4Q2020, up 30% qoq, reflecting early recovery post 1H2020 lockdown • Total income of €142 mn up 3% qoq • Cost of risk of 99 bps Organic profit after tax of €2 mn • • Exceptional items of €51 mn, including provisions/net loss relating to NPE sales¹ of €42 mn Loss after tax of €49 mn for 4Q2020 and €171 mn for FY2020, post exceptional items Total operating expenses² of €91 mn for 4Q2020, up 7% qoq Cost to income ratio² at 64% for 4Q2020 Good Capital Strong Liquidity 15.2% CET1 ratio 3,4 CET1 ratio of 15.2% 3,4 and Total Capital ratio of 18.7% 3,4 Deposits at €16.5 bn, broadly flat yoy and qoq Significant surplus liquidity of €4.2 bn (LCR at 254%) Significant Progress in Balance Sheet Repair 7% Net NPE ratio³ €0.5 bn NPE sale (Helix 2 Portfolio B) signed in January 2021; €1.5 bn NPE sales since December 2019 NPEs reduced by €2.1 bn³ to €1.8 bn³ (€0.7 bn net)³ in FY2020 Gross NPE ratio reduced to 16%³ (7% net³) and coverage maintained at 59%³ Excluding Special Levy and contributions to SRF and DGF 1) Including restructuring expenses 2) 3) 4) Pro forma for Helix 2 (Portfolio A and B). Calculations on a pro forma basis which assume legal completion of the transaction Allowing for IFRS 9 and temporary treatment for certain FVOCI instruments transitional arrangements Bank of Cyprus Holdings 5#6Our journey Group Financial Results for the year ended 31 December 2020 Where we were... Shrinkage to core strength 2014-2019 What we have achieved in 2020... Normalisation of balance sheet 2020 Where we want to be... Business turnaround for sustainable growth 2021-2022 Medium-term Significant balance sheet de- risking ✓ Normalised funding stack ✓ Exited non core operations Supporting the recovery of Cypriot economy ✓ Managing pandemic asset quality Acceleration of NPE reduction ✓ Address costs Priorities Complete de-risking while managing the post- pandemic NPE inflow Position the Bank on the path for sustainable profitability Modernise the BOC franchise, including IT and digital investment Address challenges from low rates and surplus liquidity Refinancing of Tier 21 and initiate MREL issuance¹ Priorities ■ Deliver sustainable profitability and shareholder returns ■ Enhance revenues by capitalising on market leading positions across business divisions ■ Enhance operating efficiency, through sustained focus on cost base Optimise capital management 1) Subject to market conditions Bank of Cyprus Holdings 6#72) 3) 723 1) Group Financial Results for year ended 31 December 2020 On-going support to customers and society through COVID-19 • • Payment holidays expired in December 2020 (capital & interest) €5.9 bn (>25k customers) > €2.1 bn private individuals > €3.8 bn businesses #SupportCY1 network initiative contributing: • ⚫ €302k towards education • €116k towards health • €191k towards social services Grants covering cost of repatriation flights Payment holidays for €5.9 bn loans €1.4 bn new lending in FY2020 • • €1.4 bn new lending in FY2020 Participation in the government's schemes for interest rate subsidy to private individuals and businesses Strong pipeline of over €130 mn for new housing loans, as at mid Feb 2021 #RestartCY All branches operating as usual Support CY Sustaining Operational Resilience Increased usage of digital channels sustained post 1H2020 lockdown 84% of total transactions² are performed through digital channels (vs 77% in 2019) 75% of customers currently digitally engaged³ (vs 69% in 2019) #SupportCY is a network of 93 companies and NGOs, initiated by Bank of Cyprus, during March 2020, with the aim to support the public services performing frontline duties during the Pandemic and wider Society 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 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 7#8Group Financial Results for the year ended 31 December 2020 Timely and strong response by the Government of Cyprus Comprehensive and far reaching measures to support performing businesses and the wider economy 2021 • Additional package of measures of c. €350 €400 mn for the support of the businesses and the self employed launched in Jan 2021, including: 2020 • Fiscal measures of c.€850 mn¹ accounting for c.4.1%¹ of GDP launched in 2020, including: • Moratorium of loan instalment for 9 months until Dec 2020 • • • Subsidy plan for businesses and self employed impacted by lockdowns: . Coverage of rents and other operational expenses • c.30,000 businesses expected to benefit Second loan moratorium for business and private individuals impacted by the second lockdown up to 30 Jun 2021 Eligible borrowers entitled to total moratorium of up to 9 months, inclusive of any time spent on moratorium during 2020 Extension of subsidy of interest rate of new business and housing loans • Subsidy of interest rate for 4 years Application deadline extended to 31 Dec 2021 Employment compensation schemes for businesses impacted by the second lockdown to protect jobs and avoid layoffs • €1.0 bn of government funding raised in Feb 2021 • Liquidity support to businesses and households • Employment compensation schemes for businesses impacted by COVID-19, to protect jobs and avoid layoffs • • Subsidy of interest rate of new Business and Housing Loans Financing of SMEs through CYPEF1 (€800 mn) • €3.0 bn of government funding raised in Apr 2020; vote of confidence to the Cypriot economy European Authorities measures-Implications for Cyprus • • . EU Recovery Fund (€2.4 bn) Pan-European Guarantee Fund (PEGF) (€300-€400 mn) EU SURE Programme (€479 mn) Access to ESM's Pandemic Crisis Support through the Enhanced Conditions Credit Line, for c.€440 mn (2% of GDP) 1) Estimation of Bank of Cyprus' Economic Research Department Bank of Cyprus Holdings 8#9Group Financial Results for the year ended 31 December 2020 • GDP contraction of 5.1% in 2020, significantly outperforming Euro area Open, small and flexible economy which has demonstrated historically that it can quickly recover from economic crises Unprecedented policy response mitigating COVID-19 impact; Re-introduction and tightening of containment measures in 4Q2020 for the second wave; expected to lead to some loss of momentum in economic recovery in early 2021 Successful management of the pandemic to date; Cyprus ranks first among EU countries in terms of coronavirus testing and fifth globally for the management of the pandemic² The development of effective vaccines is encouraging; successful vaccination programmes both in Cyprus and abroad expected to be strong catalysts for economic recovery; vaccines for 70% of the population over 18 expected to be available by the end of Jun 2021 The reduction in international tourist arrivals in 2020, was partly offset by domestic tourism, a trend expected to continue in 2021; A recovery in tourist activity is expected from 2H2021 and will be linked with international vaccine programmes UK, and Israel that account for >40% of tourism arrivals are well progressed with vaccination plans Economy contracted by 4.5% in 4Q2020; significant rebound expected in 2021 3.2% 1.4% 3.2% to 4.5% 3.8% to 4.2% -4.7% -4.5% 1.0% -12.6% -3.2% -4.3% -5.0% -5.1% -14.7% -6.8% 4Q2019 1Q2020 2Q2020 3Q2020 4Q2020 2020 2021E1 Cyprus Euro Area Tourist arrivals in 2020 impacted by COVID-19 1.6 2.3 -84% -83% 0.3 0.4 Jan-Jun Jul-Dec 2019 2020 GDP projections under the updated base scenario of Ministry of Finance, Central Bank of Cyprus, European Commission, the Economics Research centre of the University of Cyprus Lowy Institute https://interactives.lowyinstitute.org/features/covid-performance/ Source: Cyprus Statistical Service 1) 2) Bank of Cyprus Holdings 9#10Group Financial Results for the year ended 31 December 2020 New lending¹ continued to grow in 4Q2020, driven by corporate and retail housing New lending 1 of €374 mn in 4Q2020, up 30% qoq € mn Monthly new lending data show improving trend € mn 2,045 -34% 356 +30% 443 60 374 1,351 7- 71 912 288 203 9 206 174 lockdown 596 117 211 33 144 42 24 366 363 117 96 98 122 123 62 200 177 42 40 43 FY2019 FY2020 4Q2019 3Q2020 4Q2020 I.... lockdown 179 118 126 130 98 103 95 90 78 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Shipping & International SMEs Retail other 2021 Corporate Retail-housing 42% Market share in loans³ up 1 p.p. yoy 99% of new exposures² since 2016 were performing at the start of moratorium New disbursements in the reporting period including the average YTD change (if positive) for overdraft facilities Facilities/limits approved in the reporting period 1) 2) 3) As 31 December 2020 Bank of Cyprus Holdings • Corporate up 48% qoq, as economic activity continued to improve • . • Demand for business loans expected to increase in line with economic recovery Retail housing up 20% qoq, above pre-COVID 19 levels, supported by government interest rate subsidy scheme; pipeline of €130 mn as at mid- February 2021 High quality origination via prudent underwriting standards 10#11Encouraging trends as payment deferrals end Expired Payment Deferrals: payment behaviour € bn 5.9 1 Overdrafts 0.4- Instalment due by 15 Feb-21 3.6 1.9 15-Feb-21 95% of expired payment deferrals with instalment due by 15 Feb 2021, resumed payments • 0.9 0.7 0.3 • 15 Feb-21- 2Q2021 2H2021 31 Mar-21 Total gross loans portfolio (€12.3 bn in Dec-20) Delinquency buckets show resilience 0 arrears 74.6% 79.6% 79.4% 79.6% 1.1% 0.1% 1-30 days 1 0.3% 0.6% 0.9% 0.1% 31-90 days 0.2% 0.2% 23.4% 20.2% over 90 days 20.1% 19.6% Bank of Cyprus Holdings Dec 2019 2 Dec 2020² Jan 20212 12 Feb 2021 72 1) 2) Group Financial Results for the year ended 31 December 2020 Cautiously optimistic based on customer behaviour by 15 Feb 2021 €5.9 bn of loans under 2020 moratorium which expired on 31 Dec 2020: • €3.6 bn had an instalment due by 15 Feb 2021; 95% resumed payments • €0.7 bn have an instalment due between 15 Feb 2021 and end of Mar 2021 Careful monitoring of arrears in 2021 In close contact with customers with early arrears to offer solutions as necessary Second moratorium launched in Jan 2021 for customers impacted by second lockdown Application period expired on 31 Jan 2021; applications received for €27 m n gross loans; c.€17 mn approved to date • Payment deferrals up to Jun 2021 • Total months under moratorium, when including 2020 moratorium, cannot exceed 9 months Overdrafts and current accounts have no instalment due Arrears as at 31 Dec 2020, 31 Jan 2021 and 12 Feb 2021 are calculated based on the new regulation on Definition of Default implemented as of 1 Jan 2021, affecting NPE exposures and the calculation of Days-Past-Due 11#12Private individuals loan portfolio, highly collateralised Private Individuals: €4.09 bn Other 17% 83% Housing Expired Payment deferrals: €2.08 bn (51%) 2.08 Overdrafts² 0.04 Instalment Expired Payment Deferrals: €2.08 bn (51%) 1.71 due by 15 Feb-21 Σ Housing LTV1 €3.40 bn Other €0.69 bn < 60% 63% 30% 60%-80% 21% 5% 80-100% 8% 7% >100% 8% 58% Instalment due after 15 Feb-21 0.33 15-Feb-21 Group Financial Results for the year ended 31 December 2020 82% private individuals loans under payment deferrals had an instalment due by 15 Feb 2021 93% of these, resumed payments • Housing performing loans: €3.40 bn • Low LTV1 housing portfolio • 63% of portfolio with LTV1<60% • Only 8% of portfolio with LTV1>100% • Other: €0.69 bn • 62% secured portfolio . of which 60% with property . of which 40% with other type of collateral 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 1) 2) Overdrafts and current accounts have no instalment due Bank of Cyprus Holdings 12#13Group Financial Results for the year ended 31 December 2020 Business portfolio well diversified, with high quality collateral Business gross loans (excluding Legacy) 1 • Breakdown, by Covid-19 impact Payment deferrals that expired on 31 December 2020 €5.11 bn 4 Overdrafts €3.79 bn 0.32 High Impact: (22%) 22% Tourism (Hotels & Catering) Medium Impact: (24%) Manufacturing Trade • 24% Instalment due by 15 Feb-21 1.94 51% of business loans under payment deferrals had an instalment due by 15 Feb 2021 97% of these, resumed payments • 97% of expired payment deferrals with an instalment due by 15 Feb 2021 resumed payments • 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 • 99% of new exposures² since 2016 were performing at the start of the moratorium • 90% of portfolio secured • of which 80% with property • Moderate Impact: (29%) Construction 29% • Transportation and storage Instalment due • Low: (25%) 1.53 after 15 Feb-21 • Real Estate 25% • Education • Health ⚫ of which 20% other type of collateral • Low LTV³ business portfolio; 73% of the portfolio with LTV³<80% 15-Feb-21 723 2) 1) Gross loans as at 31 December 2020 of Corporate (incl. IB and W&M and Global Corporate), SME, Retail and H/O Facilities/limits approved LTV3 High Medium Moderate Low Total < 80% 92% 57% 64% 83% 73% >80% Total 8% 43% 36% 17% 27% 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 4) Overdrafts and current accounts have no instalment due Bank of Cyprus Holdings 13#14Group Financial Results for the year ended 31 December 2020 Portfolio exposure to businesses most impacted by COVID-19 Tourism: €1.12 bn Trade: €0.89 bn 30 Sep 2020 Hotels & Catering Food services € bn 31 Dec 2020 € bn % of portfolio 30 Sep 2020 Trade € bn 31 Dec 2020 € bn % of portfolio 0.06 0.06 5% Supermarkets, pharmacies and other essential retail businesses 0.28 0.26 30% Accommodation 1.01 1.06 95% All other 0.67 0.63 70% Total 1.07 1.12 Total 0.95 0.89 Unutilised Liquidity1 0.34 0.32 Unutilised Liquidity¹ 0.93 0.95 - of which deposits 0.27 0.26 23% - of which deposits 0.62 0.60 68% The reduction in international tourist arrivals in 2020, was partly offset by domestic tourism, a trend expected to continue in 2021; A recovery in tourist activity is expected from 2H2021 and will be linked with international vaccine programmes Majority of Accommodation customers entered the crisis with significant liquidity, following strong performance in recent years c. €1.0 bn or 91% under payment deferrals that expired on 31 Dec 2020; 32% had an instalment due by 15 Feb 2021; 98% these resumed payments c.50% (cumulative) will have an instalment due by end of Mar 2021 • 30% tied up to lower risk essential retail services, not materially impacted by COVID-19 €0.47 bn or 53% under for payment deferrals that expired on 31 Dec 2020; 68% had an instalment due by 15 Feb 2021; 97% of these resumed payments 1) Unutilised overdraft amounts and deposits Bank of Cyprus Holdings 14#15Profitability Group Financial Results for the year ended 31 December 2020 Bank of Cyprus Holdings 15#16Group Financial Results for the year ended 31 December 2020 Positive Performance before exceptional items in 4Q2020 Positive Organic Performance in 4Q2020 Net Interest Income down 2% qoq Net Fee and Commission up 8% qoq 2 1 36 -16 3Q2020 4Q2020 FY2019 FY2020 Non Interest Income up 11% qoq 307 237 82 80 00 344 330 3Q2020 4Q2020 FY2019 FY2020 Total Operating Expenses¹ up 7% qoq 62% 64% 59% 60% 385 91 340- -12% 84 165 35 41 145 +8% 35 38 150 144 3Q2020 4Q2020 FY2019 FY2020 Provisions and Impairments up 6% qoq 198 178 10 42 22 +11% 55 62 40 38 7 3 146 149 220 49 50 195 31 31 3Q2020 4Q2020 FY2019 FY2020 3Q2020 4Q2020 FY2019 FY2020 3Q2020 4Q2020 FY2019 FY2020 Operating expenses Staff costs Impairments² 2 Cost to Income ratio¹ Provisions for litigations and other Loan credit losses 1) 2) Excluding Special Levy and contributions to SRF and DGF Impairments of financial and non-financial assets Bank of Cyprus Holdings 16#17Income Statement € mn FY2020 FY2019 4Q2020 3Q2020 909% Net Interest Income 330 344 80 82 -2% Non interest income 237 307 62 55 11% yoy% -4% -23% Total income 567 651 142 137 3% -13% Total operating expenses³ (340) (385) (91) (84) 7% -12% Operating profit 197 241 45 45 44 2% -18% Total loan credit losses, impairments (198) (178) (40) (38) 6% 11% and provisions (Loss)/profit after tax-Organic (16) 36 2 1 72% (attributable to the owners) Exceptional items¹ (155) (106) (51) 3 47% (Loss)/profit after tax-attributable to (171) (70) (49) 4 owners Key Ratios Net Interest margin (annualised) 1.84% 1.90% 1.75% 1.79% -4 bps -6 bps Cost to income ratio 65% 63% 69% 68% 1 p.p. 2 p.p. Cost to income ratio excluding special levy and contributions to 60% 59% 64% 62% 2 p.p. 1 p.p. SRF and DGF Cost of Risk (annualised) 1.18% 1.12% 0.99% 0.97% 2 bps 6 bps EPS Organic (€ cent) -3.66 7.97 0.42 0.24 0.18 -11.63 1) Exceptional items for FY2020 relate to €146 mn provisions/net loss of NPE sales including restructuring expenses, Voluntary Exit Plan cost of €6 mn, and levy in the form of guarantee fee relating to tax credits of €3 mn. For FY2019 exceptional items consist of loss from the sale of CNP Insurance of €21 mn, reversal of impairment of DTA and impairment of other tax receivables of €88 mn and provisions/net loss relating to NPE sales of €92 mn and Voluntary Exit Scheme of €81 mn Including restructuring expenses Including restructuring expenses 2) 3) Excluding Special Levy and contributions to SRF and DGF Bank of Cyprus Holdings • • Group Financial Results for the year ended 31 December 2020 NII for 4Q2020 at €80 mn as pressure on lending yields continues Non interest income for 4Q2020 increased to €62 mn, positively impacted by higher fee and commission income, as transactional volumes gradually recover post 1H2020 lockdown and higher REMU revaluation gains; non interest income for FY2020 reduced to €237 mn driven mainly by lower REMU gains, revaluation gains on financial instruments and other income, negatively impacted by COVID-19 Total operating expenses³ of €91 mn for 4Q2020, up 7% qoq driven mainly by higher operating expenses mainly due to seasonality; total operating expenses³ of €340 mn for FY2020, down successful 12% yoy, following the completion of a Voluntary Staff Exit Plan in 4Q2019 and lower operating expenses Provisions and impairments for 4Q2020 at €40 mn, including loan credit losses of €31 mn, driven mainly by the increase in provisions for litigations and other financial instruments • Exceptional items for 4Q2020 of €51 mn relate to provisions/net loss of NPE sales² of €42 mn, cost for targeted Voluntary Exit Plan of €6 mn and DTC levy of €3 mn • Loss after tax of €49 mn for 4Q2020 Loss after tax of €171 mn for FY2020 17#18Drivers of NIM NII for 4Q2020 at €80 mn Group Financial Results for the year ended 31 December 2020 Effective yield on assets & cost of funding 179 175 3,5 Liquids Cost of funding 515 452 446 195 188 -Non-Legacy Legacy 560 NII (€ mn) 84 85 83 82 80 187 NIM (bps) Interest income 102 Liquids¹ 100 95 95 4 2- 54 91 485 Legacy 23 24 24 18 17 200 18 Non-Legacy 75 72 22 55 75 74 71 14 3360 330 324 8 338 331 314 4 5 -38 -30 -25 -23 -20 4Q2019 1Q2020 2Q2020 3Q2020 4Q2020 4Q2019 1Q2020 2Q2020 3Q20205 4Q2020 Interest expense Net derivative -3 -3 Other 2/ -6 -6 -6 -6 -6 Subordinated -3 loan stock -3 -3 -5 -11 =1 Customer -8 -12 -13 deposits -15 -18 Challenging interest rate outlook continues to put pressure on the effective yield of liquids Non-Legacy book yields remain under pressure mainly due to the sustained low interest rate environment and competition pressure Higher-yielding, higher-risk legacy loans are reducing as we successfully exit NPES Reduction of cost of deposits continued (down by 1 bps qoq) to 5 bps in Dec 2020 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 66 3) 4) 5) 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) 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) Interest income of non-legacy book for 3Q2020 increased from €73 mn to €74 mn since previously disclosed on 27 November 2020, following a transfer of €1 mn from liquids to non-legacy interest income Bank of Cyprus Holdings 18#19Non interest income increased to €62 mn, up 11% qoq Net fee & Commission % of Total Income 23% 26% (€ mn) 307 67 26% 23% 26% 27% 237 32 58 37 60 30 00 60 60 7. 55 55 10 10 56 1. 11 18 13 255 5 14 208 150 200 144 49 38 48 38 33 35 FY2019 FY2020 1Q2020 Net FX and other income REMU 2 1 2Q2020 3Q2020 Insurance income net of insurance claims Net fee & commission 1) 2) Recurring income Net FX gains/(losses & Net gains/(losses) on financial instruments, and other income Gains/(losses) from revaluation and disposal of investment properties and on disposal of stock of properties Bank of Cyprus Holdings 4Q2020 Group Financial Results for the year ended 31 December 2020 • • • • Non interest income for FY2020 reduced to €237 mn driven mainly by lower REMU gains, revaluation gains on financial instruments and other income, negatively impacted by COVID-19 Net fee and commission income increased to €38 mn due to seasonality, higher non-transactional fees and increased economic activity post 1H2020 lockdown Net insurance income at €14 mn broadly flat qoq REMU gains² increased to €5 mn in 4Q2020 driven mainly by higher net revaluation gains relating to specific properties in Greece; REMU sales remain volatile Net FX and other income¹ at €5 mn flat qoq 19#20Group Financial Results for the year ended 31 December 2020 Revenue outlook: short-term stabilisation, while building a less capital intensive revenue growth model Revenue remains under pressure in the near term following acceleration of balance sheet de risking; Helix 2 reduces NII by €7 mn per quarter (slide 57); Interest on Net NPEs not received in cash, fully provided - Multiple initiatives put in place to deliver NII and less capital intensive non interest income with focus on fees, insurance and non-banking business NII initiatives - Grow performing book by c. 10% over the medium term - Grow international and shipping lending Efforts to improve credit spreads Price away or price correctly deposits through liquidity fees Fee and commission income initiatives Performing book to grow by c.10% Net loans (€ bn) 12.0 10.7 C.+10% Legacy 3.4 9.9 1.8 0.9 Performing 8.7 8.9 9.0 Dec 2018 Dec 2019 Dec 2020 Medium- term target FY2020 Medium term - Extension of liquidity fees to wider customer group as of February 2021 Fee and commission income / Total Assets c.70 bps > c.100 bps Total Revenues / RWAS c.5% > c.6% - Boost fee & commission income through new price list as of February 2021 Estimated positive impact of c.€13 mn p.a. of the above initiatives Increase average product holding through cross selling to under-penetrated customer base Introduce Digital Economy Platform to generate new revenue sources, leveraging the Bank's market position, knowledge and digital infrastructure Revenues/Total Assets Pro forma for Helix 2 (Portfolio A and B). Calculations on a pro forma basis which assume legal completion of the transaction 1) Bank of Cyprus Holdings c.260 bps > c.280bps 20#21Group Financial Results for the year ended 31 December 2020 Profitable Life Insurance business with further opportunities to grow EuroLife KOINO WKYNPIW WNK Sustainable healthy profitability in FY2020 > € mn FY2020 FY2019 yoy% Total regular income1 129 120 7% (of which GWP2) 126 119 6% Costs and claims (70) (73) -4% Net insurance 33 35 -6% income Initiatives underway... • Widen target market by offering more basic and appealing products/services to extend customer base > aiming to improve total regular income¹ € mn >35% 120 129 110 • GWP2 up 6% yoy, despite challenging environment Increased agency force by 17% yoy Increased market shares across major products Life & Health Regular Premium Income 24.9% (+1.3% yoy)³ New distribution philosophy through enhanced agency force to accelerate new business Leverage on Bank's strong franchise and customer base FY2018 FY2019 FY2020 Medium- term target Market leader³ in Life insurance Market share (Life & Health regular) • Life Regular (individual) New Business 29.5% (+1.6% yoy)4 • • AUM 39.0% (+0.6% yoy)³ Bank of Cyprus Holdings Improve cost efficiency through digitalisation capabilities 14% contribution to non interest income 1) Total regular income includes Yearly Renewable Gross Written premiums and occupational pension contributions 2) 3) 4) 234 Gross written premium As at 31 December 2020 (based on preliminary market statistics) As at 30 September 2020 33% 25% c.27% 23% 19% Eurolife Peer 2 Peer 3 Other Medium- market players term target 21#22Group Financial Results for the year ended 31 December 2020 Profitable Non-Life Insurance business with further opportunities to grow KOINO ΚΥΠΡΙ WH IS General Insurance of Cyprus Sustainable healthy profitability in FY2020 > Initiatives underway... Focus on high-margin products > ...aiming to further grow GWP2 by capturing fair share based on bank customer base € mn FY2020 FY2019 yoy% Insurance income 56 57 -1% (of which GWP2) 49 50 -1% Costs and claims (33) (35) -3% Net insurance income 23 22 2% Net insurance income of €23 mn for FY2020, up 2% yoy driven mainly by the reduction of net claims positively impacted by better claims management and 1H2020 lockdown (fire and liability) and profitable part of motor segment Revamp bancassurance channel - Launch of BOC white-labelled products and use of Bank's digital channels to promote them (mainly motor and fire) - Strengthen customer relationship management with commercial customers • Optimise synergies with life insurance and its sales network 10% contribution to non interest income 1) 2) As at 31 December 2020 (based on preliminary market statistics) Gross written premium Bank of Cyprus Holdings • - Incentivise Eurolife's agency force for promotion of GIC products Enhance digital sales Launch of new, revamped, user- friendly portals and e-products to enhance sales >50% 49 50 49 FY2018 FY2019 FY2020 Medium- term target Opportunities for further market penetration Market share¹: (GWP2) 14% 13% 9% 9% 55% c.18% Peer 1 GIC Peer 2 Peer 3 Other 21 companies Medium- term target 22#23Total Operating Expenses down 12% yoy Total operating expenses down 12% yoy Group Financial Results for the year ended 31 December 2020 Cost to income ratio¹ at 60% for FY2020, broadly flat yoy (€ mn) -12% 385 340 63% 62% 64% 58% 57% 165 59% 59% 60% 145 57% 96 91 84 81 84 43 55 35 34 35 41 220 195 53 49 47 49 50 4Q2019 1Q2020 2Q2020 3Q2020 4Q2020 FY2019 FY2020 1 C/I ratio • Other operating expenses Staff costs Staff costs of €195 mn for FY2020, down 11% yoy, reflecting the Voluntary Staff Exit Plan in 4Q2019 • Staff costs of €50 mn for 4Q2020, broadly flat qoq FY2019 1H2020 9M2020 FY2020 Special Levy and contributions to SRF and DGF (€ mn) 9 9 7 6 6 • • • Operating expenses of €145 mn for FY2020, down 12% yoy, resulting from focus of management to contain costs and savings from 1H2020 lockdown Operating expenses of €41 mn for 4Q2020, up 16% qoq, due to seasonally higher marketing, property and professional fees Targeted Voluntary Staff Exit Plan in 4Q2020; total cost of €6 mn with a gross saving of c.€2 mn p.a. (1%) C/I ratio of 60%¹ for FY2020 broadly flat yoy despite cost reduction, as revenues remain under pressure Bank of Cyprus Holdings 4Q2019 1Q2020 2Q2020 3Q2020 4Q2020 Special levy and contributions to SRF and DGF for 4Q2020 reduced to €6 mn due to the seasonality of Deposit Guarantee Fund (contribution) 1) Excluding Special Levy and contributions to SRF and DGF 23#24Cost outlook and drivers Initiatives Group Financial Results for the year ended 31 December 2020 . Exit solutions to release FTES Reduction of total operating expenses ¹ by c.10% . Further branch footprint rationalisation C/I ratio¹ expected to rise to mid 60s% before improving in the medium-term € mn C.-10% • Contain restructuring costs following completion of balance sheet de-risking 385 mid 60s% 340 <350 59% 60% mid 50s% Staff cost 220 195 Enhance procurement control • Reduction of total operating expenses¹ by c.10% over the medium term despite inflation Other opex 165 145 FY2019 FY2020 FY2019 FY2020 Medium term target Medium-term target C/I ratio 1 2021 Outlook C/I ratio¹ expected to rise in the near term as revenues remain under pressure and operating expenses increase due to higher IT/digitisation investment costs Reduction of restructuring expenses to single digit as we successfully complete de-risking € mn >-80% 47 . C/I ratio¹ to reduce to mid 50s% in the medium term 1) Excluding Special Levy and contributions to SRF and DGF Bank of Cyprus Holdings 15 <10 FY2019 FY2020 Medium-term target 24#25Balance Sheet Group Financial Results for the year ended 31 December 2020 Bank of Cyprus Holdings 25#26Balance sheet composition Total assets € bn 21.52 21.51 Other assets 1.94 (including HFS) 2.21 REMU properties 1.47 1.46 Legacy net loans 1.11 0.88 Non-legacy net loans³ 8.93 9.00 AIEA¹Mix 4Q2020 Group Financial Results for the year ended 31 December 2020 Total equity & liabilities € bn 21.52 21.51 Other 1.34 1.25 Equity 2.13 2.07 Wholesale Funding from 0.27 0.27 1.00 1.00 Central Bank 0.40 0.39 Due to banks Securities² 2.03 1.91 Due from banks 0.53 0.40 Liquids 43% AIEA¹: €18.2 bn Non- legacy 49% net loans³ Cash and balances 5.51 5.65 with Central Banks 8% Legacy 31 Dec 2020 net loans 30 Sep 2020 1) AIEA: Average Interest Earning Assets. Please refer to slide 74 for the definition 2) Debt securities, treasury bills and equity investments 3) Net loans of Corporate (incl. IB and W&M and Global Corporate), SME, Retail, and H/O Bank of Cyprus Holdings Customer deposits 16.38 16.53 30 Sep 2020 31 Dec 2020 26#27CET1 at 15.2% pro forma for Helix 25 min OCR (SREP) requirement for 2020 post ECB Announcement 4 14.8% 14.6% 14.8% -0.4% (0.3%) (0.1%) -0.2%- -0.2%- (0.2%) Group Financial Results for the year ended 31 December 2020 Capital position 1 January 2021 18.7% 1.6% 15.2% 1.9% 0.4% 14.5% 14.7% 9.7% 9.7% 9.7% CET1 31 1 Dec 2019 CET1 30 Sep 2020 Operating Provisions Other RWAs Amendments Helix 2 CET1 Helix 2 profit and impairments to 31 Dec 3 capital regulations 2020 1,2 CET1 31 Dec 2020 pro AT1 T2 Total capital form a for ratio 31 Dec 2020 pro form a CET1 ratio pro forma 1,5 for Helix 2 Helix 2 1,2,5 for Helix 2 1,5 • CET1 ratio¹ positively impacted by: c.40 bps organic capital generation from operating profitability c.20 bps capital benefit from amendments to capital regulations in relation to prudential treatment of software assets and IFRS 9 dynamic component • c.20 bps from release of RWAs • CET1 ratio¹ negatively impacted by: c.30 bps from provisions and impairments Onsite inspection and review by the SSM on the stock of REMU properties completed. Findings relating to a prudential charge of up to 46 bps, the majority of which is expected to be taken at 30 Jun 2021, depending on the Bank's progress in disposing the properties impacted by the prudential charge • The Group is currently evaluating opportunities for a potential Tier 2 capital transaction given the terms and maturity profile of the Bank's existing €250 mn 10NC5 Tier 2 notes, subject to market conditions and applicable regulatory authorisations. Separately the Group continues to evaluate opportunities to initiate its MREL issuance as part of its overall capital and funding strategy 1) 2) Allowing for IFRS 9 and temporary treatment for certain FVOCI instruments transitional arrangements The CET1 ratio for 31 December 2020, including the full impact of IFRS 9 and the temporary treatment for certain FVOCI instruments amounted to 12.9% and 13.3% pro forma for Helix 2 4) 5) 3) Loan credit losses and other impairments include the net change of the prudential charges relating to specific credits and other items Bank of Cyprus Holdings 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) Pro forma for Helix 2 (Portfolio A and B). Calculations on a pro forma basis which assume legal completion of the transaction 27#28RWA intensity¹ reduced to 53%² RWAS reduced by €1.5 bn yoy Helix 2 RWAS Dec 15 Dec 16 Dec 17 Dec 18 Dec 19 Sep 20 Dec 20 Helix 2 DPP3 Pro forma² €bn 19,666 18,865 17,260 15,373 12,890 11,888 11,635 (636) 381 11,380 RWA intensity¹ decreased to 53%2 85% 85% 73% 70% 61% 55% 54% 53% Dec 15 Dec 16 Dec 17 Dec 18 Dec 19 Sep 20 Dec 20 (1) Risk Weighted Assets over Total Assets (2) Pro forma for Helix 2 (Portfolio A and B). Calculations on a pro forma basis which assume legal completion of the transaction (3) Deferred Purchase Payment Bank of Cyprus Holdings Dec 20 pro forma for Helix 22 Group Financial Results for the year ended 31 December 2020 • • • RWA is reduced by €250 mn reflecting mainly lower operational risk RWA intensity 1 decreased to 53% pro forma for Helix 22, down 8 p.p. yoy Release of RWA from Helix 2 is largely offset by the Deferred Purchase Price (DPP) 28#29Deposits at €16.5 bn broadly flat qoq € bn 16.84 16.69 16.30 16.38 16.53 Deposits 16.53 IBU 1 3.18 Corporate 1.96 Retail 10.54 SME Dec 18 Dec 19 Jun 20 Sep 20 Dec 20 0.85 Dec 20 Significant surplus liquidity of €4.2 bn Group Financial Results for the year ended 31 December 2020 Cyprus deposits by passport origin³ 3% 3% 6% 19% 69% Cyprus Other EU Russia Other countries Other European countries, excl. Russia Minimum Liquidity ratio 30 Dec 2020 Surplus required Strong deposit market share of 35% as at 31 Dec 2020 LCR (Group) 100% 254% €4,213 mn • Flexibility to operate below 100% LCR limit at least until end 2021 NSFR2 100% 139% €4,751 mn Servicing exclusively international activity companies registered in Cyprus and abroad and not residents 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 June 2021 1) 2) 3) Origin is defined as the country of passport by the Ultimate Beneficiary Owner Bank of Cyprus Holdings 29#30Asset Quality Group Financial Results for the year ended 31 December 2020 Bank of Cyprus Holdings 30#31Group Financial Results for the year ended 31 December 2020 €1.4 bn NPE sales agreed since Dec 2019, reducing NPE ratio to 16%¹ • Helix 2 Portfolio B 43% NPE reduction 9 p.p. reduction in NPE ratio • Agreement for the sale of €529 mn NPES (with reference date 30 Sep 2020) in Jan 2021 Gross consideration of 44% of gross book value (based on 30 Sep 2020) and 31% of contractual balance³, payable in cash, of which 50% is deferred unconditionally up to Dec 2025 NPES (€ bn) -43% 3.1 • Loss of €27 mn recorded in 4Q2020 1.8 NPE ratio -9 p.p. 25% 16% Helix 2 Portfolio A Agreement for the sale of €886 mn NPES (with reference date 30 Jun 2020) in Aug 2020 Gross consideration of 46% of gross book value (based on 30 Jun 2020) and 29% of contractual balance³, payable in cash, of which 65% is deferred unconditionally to 3 broadly equal instalments over 48 months Loss of €68 mn recorded in 2Q2020 Dec 2020 Dec 2020 pro forma Dec 2020 for Helix 2¹ Dec 2020 pro forma for Helix 21 CET1 ratio at 15.2% 2 pro forma for Helix 21 14.3% 14.8% 15.2% 15.8% (1) Calculations on a pro forma basis assume legal completion of both Helix 2 Portfolio A and Helix 2 Portfolio B (2) Allowing for IFRS 9 and temporary treatment for certain FVOCI instruments transitional arrangements (3) As at 30 September 2019 (4) Deferred Purchase Price Bank of Cyprus Holdings III Jun 2020 Dec 2020 Dec 2020 Dec 2020 pro forma post DPP for Helix 2¹ payment 4 Total CET1 impact +24 bps: -76 bps already included in FY2020 +34 bps on completion +66 bps upon full payment of deferred consideration 31#32Group Financial Results for the year ended 31 December 2020 NPE ratio reduced to 16% pro forma for Helix 2; Coverage maintained at 59% €2.1 bn NPE reduction in FY2020 pro forma for Helix 21 Residual NPEs comprises mainly Retail (€ bn) 7.4 3.9 3.2 3.1 1.8 3.6 Dec 18 1.8 Dec 19 1.3 Sep 20 1.2 0.7 Dec 20 Dec 20 Allowance for Expected Loan Credit Losses pro forma for Helix 2 1 Net NPES Gross NPE ratio reduced to 16%; 7% on a net basis 47% 30% 30% 26% 25% 17% 13% 11% 1.8 0.2 Re-performing NPEs 3 Retail 1.2 SME €1.6 bn Corporate 0.1 0.3 31 Dec 2020 pro forma for Helix 21 NPE coverage maintained at 59% post Helix 2 130% 122% 122% 131% 127% 70% 69% 68% 70% 68% 59% Re-performing 20% NPES Core NPES 65% Dec 18 Dec 19 Sep 20 Dec 20 Gross NPE ratio Net NPE ratio 1) 2) 3) 16% 52% 54% 60% 62% 59% 7% Dec 18 Dec 19 Sep 20 Dec 20 Dec 20 pro forma Tangible collateral² for Helix 21 Dec 20 pro forma for Helix 21 Calculations on a pro forma basis assume legal completion of both Helix 2 Portfolio A and Helix 2 Portfolio B Restricted to Gross IFRS balance In pipeline to exit NPEs subject to meet all exit criteria; the analysis is performed on a customer basis (formerly called Non-core NPEs) Bank of Cyprus Holdings Allowance for expected loan credit losses Dec 20 pro forma for Helix 21 32#33Group Financial Results for the year ended 31 December 2020 €109 mn organic NPE outflows in 4Q2020, leading to €85 mn organic NPE reduction Net organic outflows (€ mn) -142 Inflows (€ mn) New inflows Redefaults Unlikely to pay Outflows (mn) 16 9 34 -137 -208 8 6 651 00000000000 1Q2020 2Q2020 3Q2020 -85 • 24 . 22 • 4Q2020 Curing of restructuring -59 -42 -40 -23. DFAS & DFES -5 E-17: -20: -82 -71 -84 Write-offs Other/ -23 -150 -158 -133 -214 -499 Helix 2 Portfolio B Sales of NPES 1) Other includes interest, cash collections and changes in balances Bank of Cyprus Holdings -608 -886 Helix 2 Portfolio A SPA Signed -1,164 SPA Signed • €22 mn marked as UTP in 4Q2020, arising from the completion of campaign review of the loans under payment deferrals until Dec 2020 Organic NPE reduction of €0.6 bn for FY2020 Additionally there were €67 mn NPE reduction relating to NPE sales lockbox (3Q2020: €22 mn) NPE sales reduce NPEs further by €1.5 bn 33#34Group Financial Results for the year ended 31 December 2020 De-risking: Clear path to reduce NPE ratio to single digit by 2022 NPE ratio 63% Gross NPE reduction in 2021, through both organic and inorganic actions, expected to more than offset NPE inflows 15.0 € bn Continue to assess potential to accelerate NPE reduction through additional NPE sales (4.3) 16% <10% c.5% (8.9) 1.8 Dec 2014 NPE Sales Net Organic Reduction Dec 20201 NPE sales & Net Organic reduction Dec 2022 Net Organic Reduction Medium- term target Coverage 34% COR (bps) 365 1) Calculations on a pro forma basis assume legal completion of both Helix 2 Portfolio A and Helix 2 Portfolio B Bank of Cyprus Holdings 59% 118 >50% c.70-80 34#35Group Financial Results for the year ended 31 December 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 12,309 12,261 10,907 Stage 1 7,209 7,042 6,870 63% 6,865 2,096 90 44 1,933 107 55 1,902 95 76 Dec 20 Dec 19 Sep 20 Dec 20 pro forma Stage 2 1,733 2,029 2,305 21% 2,282 1,962 Stage 3 3,880 3,238 3,086 16% 1,760 Dec 19 Sep 20 Dec 20 Dec 20 " for Helix 21 Stage 1 1.2% 1.5% 1.4% 1.3% 1,771 1,731 1,033 64.91 Stage 2 2.5% 2.7% 3.3% 2.8% 878 Stage 3 50.6% 54.7% 56.1% Dec 19 49.9% Sep 20 Dec 20 Dec 20 % of gross loans pro forma pro forma for Helix 21 for Helix 21 • Coverage for stage 3 loans remains at c.50% post Helix 2 Net transfer of c. €300 mn loans from stage 1 to stage 2 as a result of the significant increase in credit risk and management overlays €22 mn marked as UTP in 4Q2020, arising from the completion of campaign review of the loans under payment deferrals until December 2020 1) Calculations on a pro forma basis assume legal completion of both Helix 2 Portfolio A and Helix 2 Portfolio B Bank of Cyprus Holdings 35#36Cost of risk' of 118 bps for FY2020, as expected 1.18% Mainly impact of 1.12% deterioration of macro- 1.00% economic outlook in 1Q2020 0.43% 0.75% FY2018 FY2019 FY2020 Group Financial Results for the year ended 31 December 2020 Base line 2020 GDP rate -5.8% Unemployment rate 7.1% 2021 4.0% 7.4% 2022 3.9% 6.3% • Cost of risk of 118 bps for FY2020 (€149 mn), of which 43 bps (€54 mn) reflect the impact of IFRS 9 Forward Looking Information (FLI) driven by deterioration of macroeconomic outlook recognised in FY2020 Cost of risk of 99 bps for 4Q2020 (€31 mn), of which 37 bps (€11 mn) COVID-19 related Interest on net NPEs not received in cash, fully provided (€13 mn in 4Q2020) bps 200 76 97 99 • 200 152 88 30 107 110 Charge (bps) 58 17 37 53 33 43 40 58 51 14- 14: 16 . 1Q2020 2Q2020 3Q2020 4Q2020 Reversal -10 -11 (bps) -76 COVID-19 Interest on net NPEs not received in cash New lending Stage 3 Stage 1 & 2 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 1) Bank of Cyprus Holdings 36#37Group Financial Results for the year ended 31 December 2020 REMU: Asset disposal strategy tackles both value and volume of assets REMU stock broadly flat at c.€1.5 bn Group BV (€ mn) 1,641 c. €1.1 bn REMU sales (Book Value) since 2017 Group BV (€ mn) 1,530 1,490 1,467 1,457 92 93 177 158 Greece & Romania Residential 293 314 Commercial properties 24 24 Hotels 619 606 Land & plots 262 262 Golf Dec 2017 Dec Dec Sep Dec 2018 2019 2020 20201 €91 mn sales in FY2020, comfortably above Book Value Sales contract prices 2 - Organic (€ mn) (1,073) 1,289 1,427 (127) 1,457 (59) 1 Jan 2017 Additions³ 3 Sales Impairment loss & FV loss Transfer to 31 Dec 20201 HFS 4 • FY2020 sales impacted by 1H2020 lockdown Asset disposals across all property classes 111% 85% 106% 84% 15 91 50 26 Commercial Residential Land Net Proceeds / BV 113% 110% Gross Proceeds / OMV 83% 89% • Visible pipeline for €53 mn (SPAs signed) as at 31 Dec 2020 • Offers accepted for €28 mn as at 31 Dec 2020 Total Sales FY2020 1) In addition to assets held by REMU, properties classified as "Investment properties" with carrying value of €21 mn as at 31 December 2020 relate to legacy properties 3) Additions include €21 mn transfer from own properties 4) 2) Amounts as per Sales purchase Agreements (SPAs) Stock of property with a carrying value of €59 mn as at 31 December 2020 was transferred to non-current assets and disposal groups held for sale as it was included in the Helix 2 (both portfolios A & B) Bank of Cyprus Holdings 37#38Group Financial Results for the year ended 31 December 2020 Organizational resilience & ESG agenda: ESG Performance Environmental " 1.35 mn kWh of energy savings €0.6 m n investment in energy-saving 1,929 tones paper recycled People >3,500 employees >57 ths hours of training conducted 95% of employees received feedback during interim performance assessments Social 2,332 cancer patients treated at the Bank of Cyprus Oncology Centre €285k raised for the Cyprus Anti-Cancer Society c. €70 m n cumulative investment for the Bank of Cyprus Oncology Centre Responsible services ☑ O €5.9 bn loans (>25k customers) under payment holiday expired Governance 33% of the board of directors are female 48 internal audits finalised 3,813 customer relationships suspended for compliance reasons #SupportCy¹ Network Initiative €302k contributions to education c. €1.4 bn new lending for FY2020 84% of total transactions are through digital channels €116k contributions to health services €191k contributions to welfare 75% of customers are digitally engaged Data for the period 1 January 2020 to 31 December 2020 1) #SupportCY is a network of 93 companies and NGOs, initiated by Bank of Cyprus, during March 2020, with the aim to support the public services performing frontline duties during the Pandemic and the Society, in general Bank of Cyprus Holdings 38#39Group Financial Results for the year ended 31 December 2020 Leverage leading Digital Capabilities to serve customers and the economy Vision Leverage technology to sustain a competitive advantage through digital banking Serve customer needs anywhere and at any time, through an agile technology ecosystem Be the driver of digital economy, in support of national efforts for structural economic reform Creating shareholder value Improving operational efficiency through: • further automation • further branch rationalisation Digital Transactions ratio¹ Dec 2019 Dec 2020 77.4% 84.4% Digitally Engaged 2 Customers Dec 2019 Dec 2020 68.6% 74.7% Average mobile logins per month Dec 2019 Dec 2020 16.8x 20.2x . Opportunities to cross-sell through: • modelling customers' needs and behaviours ⚫ offering tailored products and services Active users of Internet and/or Mobile Banking Dec 2019 Dec 2020 249k 292k 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 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 1) 2) Bank of Cyprus Holdings 39#40Medium Term Outlook Bank of Cyprus Holdings Group Financial Results for the year ended 31 December 2020 40 40#41Our journey Group Financial Results for the year ended 31 December 2020 Where we were... Shrinkage to core strength 2014-2019 What we have achieved in 2020... Normalisation of balance sheet 2020 Where we want to be... Business turnaround for sustainable growth 2021-2022 Medium-term Significant balance sheet de- risking ✓ Normalised funding stack ✓ Exited non core operations Supporting the recovery of Cypriot economy ✓ Managing pandemic asset quality Acceleration of NPE reduction ✓ Address costs Priorities Complete de-risking while managing the post- pandemic NPE inflow Position the Bank on the path for sustainable profitability Modernise the BOC franchise, including IT and digital investment Address challenges from low rates and surplus liquidity Refinancing of Tier 21 and initiate MREL issuance¹ Priorities ■ Deliver sustainable profitability and shareholder returns ■ Enhance revenues by capitalising on market leading positions across business divisions ■ Enhance operating efficiency, through sustained focus on cost base Optimise capital management 1) Subject to market conditions Bank of Cyprus Holdings 41#42Medium-term strategic targets Profitability вде Return on Tangible Equity (ROTE) 1 Total Operating Expenses² NPE Ratio Asset Quality Capital L())))) Cost of risk Group Financial Results for the year ended 31 December 2020 2022 Medium Term c.7% <€350 m n <10% c.5% Supported by CET1 ratio of at least 13% c.70-80 bps 1) ROTE is calculated as Profit after Tax divided by (Shareholders' equity minus Intangible assets) 2) Total operating expenses comprise staff costs and other operating expenses. Total operating expenses do not include the special levy or contributions to the Single Resolution Fund (SRF) or Deposit Guarantee Fund (DGF) or any advisory or other restructuring costs Bank of Cyprus Holdings 42#43Group Financial Results for the year ended 31 December 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 January 2021 (negative outlook) Short-term Issuer Default Rating: Affirmed at "B" on 29 January 2021 Viability Rating: Affirmed at "b-" on 29 January 2021 Moody's Investors Service: Baseline Credit Assessment: Affirmed at "caa1" on 10 November 2020 Short-term deposit rating: Affirmed at "Not Prime" on 10 November 2020 Long-term deposit rating: Affirmed to "B3" on 10 November 2020 (positive outlook) Counterparty Risk Assessment: Affirmed at B1(cr) / Not-Prime (cr) on 10 November 2020 Listing: LSE - BOCH, CSE - BOCH/TPKH, ISIN IE00BD5B1Y92 Visit our website at: www.bankofcyprus.com Bank of Cyprus Holdings 43#44APPENDIX Macroeconomic overview Bank of Cyprus Holdings Group Financial Results for the year ended 31 December 2020 44#45Dec 12 Apr 13 Jul 13 Oct 13 S&P credit ratings Jan 14 Apr 14 Jul 14 Oct 14 Jan 15 Apr 15 Jul 15 Oct 15 Jan 16 Apr 16 | 91 լոՐ Oct 16 80 60 40 884 120 100 Cyprus maintains investment grade Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan 17 Apr 17 Jul 17 Oct 17 Jan 18 Cyprus Portugal Italy Spain Greece Ireland SOURCE: Statistical Service of Republic of Cyprus; Bloomberg, Economics Research Centre of University of Cyprus and Eurostat Normalised against Germany Government bond with maturity 15/8/2025 except Greece 1) Bank of Cyprus Holdings Apr 18 Jul 18 Oct 18 Jan 19 Apr 19 Jul 19 Oct 19 Jan 20 Apr 20 Jul 20 Oct 20 Jan 21 2) Cypriot economy more resilient than anticipated earlier in the year Economic sentiment remains volatile and reflects COVID-19 uncertainty BB- Jan-19 Jul-19 Jan-20 Jul-20 ■ AA- A BBB- BBB Spreads (%) Jan-21 8.3% 8.5% 111.0 7.8% 8.3% 7.3% 7.3% 7.4% 8.1% 7.8% 79.8 7.6% 72.9 7.2% 7.2% 6.7% 6.7% 0.5 0.4 0.3 0.2 0.1 0 -0.1 Jan 2019 Feb 2019 Apr 2019 May 2019 Unemployment rate increased to 8.5% in 4Q2020 9.4% 8.9% Tightening of spreads as market confidence improves Nov 2019 Dec 2019 Feb 2020 4Q2019 1Q2020 -Cyprus 2Q2020 Euro Area 3Q2020 4Q2020 2020 Estimate Estimate 2021E 2022E Cyprus maturity 4/11/2025 Italy maturity 01/12/20251 Portugal maturity 15/10/20251 Greece maturity 30/01/20282 Spain - maturity 31/10/20251 Due to the Debt swap of the Hellenic Republic, from November 2017 onwards data for the new Hellenic Republic Bond with maturity 30/01/2028 was used and normalised against the closest maturity of German Government bond (DBR) 15/08/2027 Mar 2020 45 Aug 2020 Sep 2020 Nov 2020 Dec 2020 Feb 2021 Group Financial Results for the year ended 31 December 2020#46Group Financial Results for the year ended 31 December 2020 Economic activity improving since easing of restrictions Retail sales stabilising Retail trade volume % change -3m average 9.1 Card spending rebounded, having hit low in April 2020 #ths 1,000 916 922 5 -5 -15 -25 878 755 -2.4 -6.8 800 842 813 818 742 626 600 -31.9 -35 Jan 19 Apr 19 Jul 19 Oct 19 Jan 20 Apr 20 Retail trade ex motor Jul 20 Oct 20 Retail trade ex autom fuel ―Non-food ex autom fuel Volume of building permits shows signs of recovery- yet remain volatile 400 463 Jan 2019 Feb Mar Apr May Jun - 2020 Jul Aug Sep Oct Nov Dec Motor vehicles registrations improved post 1H2020 lockdown Motor vehicles registrations % change -3m average #ths 800 10 688 0 -10 600 -10 589 -20 400 464 -30 -40 -50 200 -50 Jan Feb Mar - 2018 - 2019 Apr 2020 May Jun Jul Aug Sep Oct Feb Apr 19 19 Jun Aug 19 Oct Dec Feb Apr Jun Aug Oct Dec 19 19 19 20 20 20 20 20 20 Vehicles registrations Source: Cyprus Statistical Service Bank of Cyprus Holdings 46#47APPENDIX Additional asset quality slides Bank of Cyprus Holdings Group Financial Results for the year ended 31 December 2020 47#48€0.5 bn NPE Trade Delivers Accelerated Risk Reduction • . Group Financial Results for the year ended 31 December 2020 €507 mn Helix 2 portfolio B (€ mn) 507 8 58 SMES Performing of which NPES Provisions Held NPES: €499 mn Other³ 31 December 2020 Assets sold € mn Contractual Loans¹ Gross Loans 783 Receipts Consideration 507 of which: 499 Cash (308) 49 - Deferred Purchase Price Transaction Costs and other adjustments Retail 441 Consideration net of transaction costs and Carrying Value of assets being sold 248 other adjustments P/L Impact: (27) Dec 20 Contractual balance¹ of €783 mn as at 30 Sep 2019 Portfolio comprises c. 16,000 loans, mainly to Retail and SME clients, secured over c.4,000 real estate collaterals Completion remains subject to a number of customary regulatory and other approvals, currently estimated to occur in early 2H2021 1) The difference between the contractual balance and the GBV relates to IFRS adjustments/unrecognised income and non-contractual write-offs 2) DFAs and cash already received by 31 December 2020 Bank of Cyprus Holdings € mn 243 122 121 (22) 221 48#49Group Financial Results for the year ended 31 December 2020 Foreclosures for Primary residence <€350k suspended until March 2021 Cumulative 2016-20181 FY2019 FY2020 4Q2019 1Q2020 2Q2020 3Q2020 4Q2020 Foreclosures commenced² 1,437 1,829 1,5532 536 5932 227 733 Auctions held 470 807 6322 373 1642 468 2,134 properties were resolved since 2016 Sold at auction 343 853 Repossessed³ 4 938 Consensual deals 2,134 Excluding Helix 1 Foreclosures suspended between 18 March and 31 August as per the Cyprus Bank Association Properties that have been auctioned unsuccessfully at least once 1) 2) 3) 4) 5) As defined by the legislation Includes DFAs, restructurings and settlements Bank of Cyprus Holdings Foreclosures for Primary Residences <€350k and "very small business premises”5 of the borrowers have been suspended until the end of Mar 2021, via a legislation enacted on 29 December 2020 by the Cyprus Parliament 49#50Group Financial Results for the year ended 31 December 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 €9.20 bn Breakdown by COVID-19 impact assessment on business sectors € bn €9.20 bn Private Individuals 4.09 • High Impact: (12%) High 12% • Tourism (Hotels & Catering) Hotels & 1.12 Catering Real Estate 1.02 Trade 0.89 Professional 0.65 & Other services Other sectors 0.58 Construction 0.52 Manufacturing 0.33 1) Gross loans as at 30 December 2020 of Corporate (incl. IB and W&M and Global Corporate), SME, Retail, and H/O Bank of Cyprus Holdings Medium 14% Moderate 16% Low 14% 44% Private individuals • Medium Impact: (14%) Trade Manufacturing • Moderate Impact: (16%) Construction Transportation and storage • Low: (14%) Real Estate Education ⚫ Health • Private individuals (44%) Refer to slide 12 50#51Decomposition of payment deferrals Non-legacy gross loans of €9.2 bn Private Individuals IFRS 9 staging for expired loan payment deferrals € bn 0.37 2.01 Private individuals Expired Payment Deferrals: €2.08 bn (51%) €4.09 bn 1.71 Businesses € bn 1.32 Businesses €5.11 bn 1.94 Expired Payment Deferrals: €3.79 bn (74%) 1.7% 3.3% 28.3% 1.31 0.63 0.14 Stage 1 Stage 2 Stage 3 1.5% 2.8% 23.7% 2.65 0.95 0.19 1.85 Stage 1 Stage 2 Stage 3 Loans under payment deferrals with instalment due after 15 Feb-21 Loans under payment deferrals with instalment due by 15 Feb-21 Loans not on moratorium Dec 2020 Coverage 1) Re-performing: pipeline to exit NPEs subject to meet all exit criteria; the analysis is performed on a customer basis (formerly called Non-core NPEs) Bank of Cyprus Holdings Group Financial Results for the year ended 31 December 2020 Private Individuals • 93% of expired payment deferrals of private individuals with an installment due by 15 Feb 2021 resumed payments Reclassifications of c.€240 mn gross loans from Stage 1 to Stage 2 in FY2020, mainly due to the deterioration of the macro assumptions, significant increase in credit risk and management overlays Migration of c.€85 mn gross loans from Stage 2 to Stage 1 mainly due to enriched data availability Businesses • • 97% of expired payment deferrals of businesses with an installment due by 15 Feb 2021 resumed payments Reclassifications of c.€450 mn from Stage 1 to Stage 2 in FY2020, mainly due to the deterioration of the macro assumptions, significant increase in credit risk and management overlays Migration of c. €290 mn gross loans from Stage 2 to Stage 1 mainly due to enriched data availability Adequate coverage of Stage 3 expired payment deferrals; higher than the coverage of re- performing NPES1 (slide 32) 51#52Group Financial Results for the year ended 31 December 2020 Continuous progress across all segments Focus shifts to Retail and SME after intense Corporate attention € mn 1,760 Corporate Dec 19 Inflows 722 13 Exits (134) NPE ratio Dec 20 601 Corporate 364 €423 mn Helix 2 Pro-forma for Helix 21 (178) 423 NPE coverage NPE total coverage Terminated Corporate 59 SME 64 SME €157 mn Terminated SMEs 93 Retail 319 €1,180 mn Dec 19 Inflows Exits Dec 20 (96) 727 12 643 Helix 2 (486) Pro forma for Helix 2 157 Dec 2020 Pro forma¹ 9% 62% 118% Dec 2020 Pro forma¹ NPE ratio 12% NPE coverage 60% NPE total coverage 128% Terminated Retail 861 Retail Dec 19 Dec 2020 Pro forma¹ 2,431 Inflows Exits Velocity 2 29 NPE ratio 24% (485) (133) NPE coverage Dec 20 Helix 2 1,842 ➤ Retail Housing 52% (662) Dec 2020 pro forma for Helix 2¹ Pro forma for Helix 2¹ 1,180 ➤ Retail Other 65% NPE total coverage 132% 1) Calculations on a pro forma basis assume legal completion of both Helix 2 Portfolio A and Helix 2 Portfolio B Bank of Cyprus Holdings 52#53Gross loans and NPEs by Customer Type Gross loans by customer type (€ mn) 12,822 12,709 12,309 12,261 1,875 1,870 1,696 1,654 10,907 1,337 4,077 4,068 4,044 3,994 3,640 1,922 1,914 1,798 1,797 1,292 2,209 2,186 2,117 2,126 2,126 2,739 2,671 2,654 2,690 2,512 Dec 19 Mar 20 Sep 20 Dec 20 Dec 20 pro forma for Helix 2 NPEs by customer type (€ mn) 3,880 1,043 3,738 3,238 1,026 3,086 844 786 1,388 1,326 1,760 1,170 1,056 474 727 724 639 643 706 164 159 112 105, 157 558 105 503 473 496 318 Dec 19 Mar 20 Sep 20 Dec 20 Dec 20 pro forma for Helix 21 Retail other Retail Housing SMEs Global Corporate Corporate 1) Calculations on a pro forma basis assume legal completion of both Helix 2 Portfolio A and Helix 2 Portfolio B Bank of Cyprus Holdings Group Financial Results for the year ended 31 December 2020 53#54NPE Coverage and Total coverage by segment Coverage and collateral maintained post Helix 22 Group Financial Results for the year ended 31 December 2020 Tangible Collateral¹ Allowance for expected loan credit losses Corporate €318 mn Global Corporate: €105 mn SME €157 mn Retail-Housing €706 mn Retail-Other €474 mn Total €1,760 m n 167% 167% 167% 139% 140% 138% 133% 127% 128% 128% 131% 81% 124% 126% 127% 130% 131% 127% 86% 86% 122% 122% 118% 111% 108% 104% 101% 64% 50% 51% 53% 46% 69% 69% 68% 85% 85% 86% 59% 60% 57% 70% 69% 68% 71% 83% 54% 68% 86% 81% 81% 58% 60% 63% 51% 55% 53% 59% 64% 60% 64% 67% 67% 65% 48% 54% 55% 52% 54% 60% 62% 59% Dec 19 Sep 20 Dec 20 Dec 20 pro forma Dec 19 Sep 20 Dec 20 Dec 20 Dec 19 Sep 20 Dec 20 Dec 20 2 pro forma² pro forma 2 1) 2) Restricted to Gross IFRS balance Calculations on a pro forma basis assume legal completion of both Helix 2 Portfolio A and Helix 2 Portfolio B Bank of Cyprus Holdings Dec 19 Sep 20 Dec 20 Dec 20 pro forma 2 Dec 19 Sep 20 Dec 20 Dec 20 pro forma Dec 19 Sep 20 Dec 20 Dec 20 2 pro forma² 54#55Asset quality- NPE analysis (€ mn) Dec-20 Sep-20 Jun-20 Mar-20 Dec-19 Dec-18 A. Gross Loans after Residual Fair value adjustment on initial recognition 12,031 12,066 12,243 12,457 12,551 15,438 Residual Fair value adjustment on initial recognition 230 243 248 252 271 462 Group Financial Results for the year ended 31 December 2020 B. Gross Loans 12,261 12,309 12,491 12,709 12,822 15,900 B1. Loans with no arrears 9,149 9,028 8,954 8,706 8,820 8,260 B2. Loans with arrears but not NPES 26 43 69 265 122 221 1-30 DPD 21 34 54 209 88 166 31-90 DPD 5 9 15 56 34 55 B3. NPES With no arrears Up to 30 DPD 31-90 DPD 91-180 DPD 3,086 3,238 3,468 3,738 3,880 7,419 548 533 603 601 722 1,482 16 19 28 52 54 136 26 29 39 72 76 231 18 35 48 79 121 178 181-365 DPD 81 101 178 255 263 393 Over 1 year DPD 2,397 2,521 2,572 2,679 2,644 4,999 NPE ratio (NPEs / Gross Loans) 25% 26% 28% 29% 30% 47% Allowance for expected loan credit losses (including residual fair value adjustment on initial recognition¹) 1,902 1,933 2,043 2,109 2,096 3,852 Gross loans coverage NPES coverage 16% 62% 16% 16% 17% 16% 24% 60% 59% 56% 54% 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 55#56Bank of Cyprus Holdings 49% 31% 29% 25% 1.85 1.36 1.25 1.18 Trade Manufacturing NPE ratio by economic activity 27% 52% 25% 23% 28% % of total 10% 0.64 0.47 0.44 0.44 4% 10% 6% 10% Analysis of gross loans and NPE ratio by Economic activity Gross loans by economic activity (€ bn) 1.27 1.08 1.14 1.19 Hotels & Restaurant Construction %89 34% 31% 30% 23% 53% 1.95 0.85 0.81 0.79 Trade Manufacturing Hotels and Catering Construction Real estate Private individuals Professional and Other sectors other services 21% 20% 43% 1.61 1.29 1.29 27 1.27 Real Estate Private Individuals Professional and other services 37% 32% 30% 31% 46% 28% 30% 17% 14% 34% 14% 56 6.47 6.02 5.85 5.83 1.20 1.00 0.83 0.89 48% Dec 18 ■Dec 19 Sep 20 Dec 20 0.91 0.75 0.70 0.67 Other sectors 7% 5% Group Financial Results for the year ended 31 December 2020#57Group Financial Results for the year ended 31 December 2020 Balance sheet de-risking results in a smaller but safer loan book Net Loans: Non-legacy2 vs Legacy Interest Income on Loans: Non-legacy2 vs Legacy € mn € bn 15.62 14.55 36% 5.64 12.04 4.40 10.73 10.38 10.36 9.88 3.39 1.79 1.45 1.36 0.88 9% 98 96 93 91 89 23 23 82 24 18 17 18 11 64% 9.98 10.15 8.65 8.94 8.93 9.00 9.00 91% 75 55 72 22 75 75 74 71 71 Dec 16 Dec 17 Dec 18 Dec 19 Sep 20 Dec 20 Dec 20 Legacy Non-legacy pro forma 4Q2019 Legacy 1Q2020 Non-legacy 2Q2020 3Q2020 restated 3 4Q2020 4Q2020 pro forma for Helix 21 for Helix 21 Lower but higher quality income resulting from balance sheet de-risking Interest income of non-legacy book decreased by €3 mn qoq as challenging interest rate outlook continues • Interest income of legacy book increased by €1 mn qoq due to increased cash collections not previously recognized • 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 legal completion of both Helix 2 Portfolio A and Helix 2 Portfolio B 2) Gross loans as at 31 December 2020 of Corporate (incl. IB and W&M and Global Corporate), SME, Retail, and H/O 3) Interest income of non-legacy book for 3Q2020 increased from €73 mn to €74 mn since previously disclosed on 27 November 2020, following a transfer of €1 mn from liquids to non-legacy interest income Bank of Cyprus Holdings 57#58Profitability Risk adjusted yield will rise as Legacy book reduces Non- Legacy Legacy Group FY20020 FY2020 FY2020 Interest Income on loans (€ 292 77 369 mn) (pre FTP) Loan credit losses (€ mn)³ (27) (122) (149) Interest Income net of loan 265 (45) 220 credit losses (€ mn) • Cost of Risk 0.30% 3.61% 1.18% • Effective Yield 3.26% 4.93% 3.51% Risk adjusted Yield¹ 2.96% (2.87%) 2.10% Capital & balance Sheet Average Net Loans (€ mn) RWA Intensity² 8,945 1,557 10,502 48% 106% 54% Global corporate, RRD Corporate IB, W&M SME and Retail Banking REMU Overseas non core 1) Interest Income on loans net of allowance for expected loan credit losses/ Average Net Loans 2) Risk Weighted Assets over Total Assets 3) Group Financial Results for the year ended 31 December 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 (€13 mn in 4Q2020) As Legacy book reduces: • Group risk adjusted yield expected to rise Group Risk intensity expected to fall supporting CET1 ratio build A reclassification of €12 mn between legacy and non legacy loan credit losses for the 9M2020 was performed to align with the presentation on slide 78 of the 9M2020 FR presentation hence bringing the total credit losses for the FY2020 of the non-legacy book to €18 mn and the legacy book to €100 mn Bank of Cyprus Holdings 58#5931% Rescheduled Loans Rescheduled loans by customer type (€ bn) 4.89 Rescheduled loans % gross loans by customer type Group Financial Results for the year ended 31 December 2020 1.17 0.47 2.73 1.01 2.58 2.35 2.23 0.97 2.09 0.94 0.88 0.83 0.64 0.44 0.42 2.24 0.38 0.53 0.37 0.37 0.52 0.50 0.34 0.46 0.55 0.27 0.16 0.16 0.45 0.15, 0.43 0.43 0.41 0.38 Dec 18 Dec 19 Mar 20 Jun 20 Sep 20 Dec 20 Retail housing Retail other SMEs Global Corporate Corporate 17% 16% 16% 15% 14% Corporate 15% 12% 7% Global Corporate %8 7% Dec 18 Dec 19 Mar 20 Jun 20 Sep 20 Dec 20 Bank of Cyprus Holdings 31 December 2020 26% 23% 23% 22% 22% 23% Stage 1 Stage 2 Stage 3 POCI FVPL Total SMEs Retail Housing Retail Consumer Rescheduled loans-Asset Quality € '000 203,388 260,728 1,337,698 180,011 110,805 2,092,630 59#60REMU-the engine for dealing with foreclosed assets €1.34 bn sales of 2,076 properties across all property classes since set-up Sales contract prices¹ (€ mn) Breakdown of cumulative sales¹ # 99 # 331 # 575 # 5792 by on-boarding year (€ mn) # 492 Sales €1.34 bn Legacy 3 505 160 304 Group Financial Results for the year ended 31 December 2020 2016 2017 2018 2019 2020 576 336 112 14 €1,343 % Sales of vintage stock (BV)4 58% 49% 51% 31% 330 238 179 345 91 by property type 2016 2017 2018 2019 FY2020 Cyreit Sales # properties • Asset disposal strategy tackles both value and volume of assets • Asset disposals across all property classes • 58% of Legacy³ and 49% of 2016 book assets now sold • 36% of sales (by value) relate to land 1) Amounts as per Sales purchase Agreements (SPAs) 4) 2) 3) Number of properties sold include 21 properties from the disposal of Cyreit and 23 properties from NPE sale (Helix) Legacy properties relate to properties that were on-boarded before REMU set-up in January 2016 Bank of Cyprus Holdings 7% 12% 12% 11% 22% Land 36% Commercial Hotels Residential Cyreit Overseas 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 31 December 2020 60#61REMU - the engine for dealing with foreclosed assets On-board assets in REMU at conservative c.25%-30% discount to OMV BV € mn Legacy 2016 2017 2018 2019 2020 Group Financial Results for the year ended 31 December 2020 Evolution of properties managed by REMU Investment Properties BV € mn (80) 146 1,490 (40) (59) 112 1,457 107 198 527 270 207 169 86 1,457 100% 74% 1,378 71% 72% 71% 72% 01 Jan 2020 Additions 2 Sales Impairment loss & fair value losses Transfer to non- current assets and disposal groups held for sale 3 avg on-boarded value as a % of OMV1 Real Estate Market property prices up 1.2% in 3Q20205 1,350 31 Dec 20204 Sales contracts (excl. DFAs) for 2020 down 23% yoy reflecting 1H2020 lockdown 120.0 4.0 Central Bank Residential Property Price index 10.366 110.0 3.5 9.242 8.734 -23% 100.0 3.0 7.968 90.0 7.063 79.1 2.5 5.885 78.6 2.2 4.875 80.0 2.0 4.952 6.328 4.983 70.0 1.2 1.5 5.250 60.0 1.0 3.603 50.0 4.367 4.481 0.5 40.0 1.349 1.813 2.406 2.985 30.0 0.0 Q32018 Q42018 Q12019 Q22019 Q32019 Q42019 Q12020 Q22020 Q32020 2015 2016 2017 2018 2019 2020 Residential Propert Price index (2010Q1=100) % change y-o-y (RHS) Sales to Cypriots Sales to non-Cypriots 2) 723 1) Open market value at on-boarding date 4) Additions include €21 mn transfer from own properties In addition to assets held by REMU, properties classified as "Investment properties" with carrying value of €21 mn as at 31 December 2020 relate to legacy properties 3) Stock of property with a carrying value of €59 mn as at 31 December 2020 was transferred to non-current assets and disposal groups held for sale as it was included in the Helix 2 (both portfolios A & B) 5) Based on Residential price index published by Central Bank, dated 22 January 2020 6) Based on data from Land of Registry- Sales contracts Bank of Cyprus Holdings 61#62APPENDIX Additional financial information Bank of Cyprus Holdings Group Financial Results for the year ended 31 December 2020 32 62#63Consolidated Balance Sheet Group Financial Results for the year ended 31 December 2020 Assets (€ mn) 31.12.2020 Cash and balances with Central Banks 5,653 31.12.2019 change Liability and Equity (€ mn) 31.12.2020 31.12.2019 change 5,060 12% Deposits by banks 392 533 -27% Loans and advances to banks 403 321 26% Funding from Central Bank 995 Debt securities, treasury bills and equity investments 1,913 1,906 0% Repurchase agreements 168 -100% Net loans and advances to customers 9,886 10,722 -8% Customer deposits 16,533 16,692 -1% Stock of property 1,350 1,378 -2% Subordinated loan stock 272 272 0% Investment properties 128 136 -6% Other liabilities 1,247 1,169 7% Other assets 1,550 1,574 -2% Total liabilities 19,439 18,834 3% Non current assets and disposal groups held for sale 631 26 Shareholders' equity 1,831 2,040 -10% Other equity instruments 220 220 Total assets 21,514 21,123 2% Total equity excluding non- 2,051 2,260 -9% controlling interests Non controlling interests 24 29 -15% Total equity 2,075 2,289 -9% Total liabilities and equity 21,514 21,123 2% Bank of Cyprus Holdings 63#641) Cypriot business Market shares¹ 45.4% 41.1% 37.5% 37.1% ⚫Loans Deposits 41.7% 41.5% 41.9% Group Financial Results for the year ended 31 December 2020 Strong market shares in resident and non-resident deposits Residents Non-residents 37.3% 38.3% 35.8% 35.8% 35.7% 34.9% 35.4% 36.0% 35.0% 32.8% 35.1% 35.0% 35.0% 31.1% 35.3% 34.9% 34.8% 35.0% 34.9% 31.5% 29.5% Dec 16 Dec 17 Dec 18 Dec 19 Jun 20 Sep 20 Dec 20 Dec 16 Dec 17 Dec 18 Dec 19 Jun 20 Sep 20 Dec 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 16 33 396 392 384 380 376 380 381 376 374 371 16 11 8 6 5 4Q2019 1Q2020 2Q2020 3Q2020 4Q2020 11 8 6 24 24 19 15 5 12 0 1 1 0 0 4Q2019 1Q2020 2Q2020 3Q2020 4Q2020 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 64#65Group Financial Results for the year ended 31 December 2020 Income Statement bridge¹ for FY2020 € mn Net interest income Net fee and commission income Underlying basis NPE sales Tax related items Other Statutory Basis 330 330 144 144 Net foreign exchange gains and net gains on financial instrument transactions and disposal/dissolution of subsidiaries 15 3 18 Insurance income net of claims and commissions Net gains from revaluation and disposal of investment properties and on disposal of stock of properties 56 56 7 བ Other income 15 15 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 567 3 570 (370) (26) (3) (23) (422) 197 (26) 3 (3) (20) 148 (149) (120) (3) (272) (42) (42) (7) 7 (1) (146) (3) (16) (166) (8) (8) 3 3 Loss after tax and before non-recurring items (attributable to the owners of the Company) Advisory and other restructuring costs - organic (6) (146) (3) (16) (171) (10) 10 Loss after tax - Organic (attributable to the owners of the Company) Provisions/net loss relating to NPE sales, including restructuring expenses Restructuring costs – Voluntary Staff Exit Plan (VEP) DTC levy Loss after tax - attributable to the owners of the Company (16) (146) (3) (6) (171) (146) 146 (6) (3) 6 3 (171) (171) 1) Please refer to section B1 "Unaudited Reconciliation of income statement for the year ended 31 December 2020" between statutory and underlying basis of the Group Financial Results Bank of Cyprus Holdings 65#66Analysis of Interest Income and Interest Expense Analysis of Interest Income (€ mn) 4Q2019 1Q2020 2Q2020 3Q2020 restated 1 4Q2020 Loans and advances to customers 98 96 93 91 89 Loans and advances to banks and central banks 1 0 0 3 2 Investment at amortised costs 3 3 2 2 Investments FVOCI 5 5 4 4 4 Investments classified as loans and receivables 107 104 99 100 97 Trading Investment Derivative financial instruments 10 9 8 8 Other investments at fair value through profit or loss Total Interest Income 117 113 108 108 105 Analysis of Interest Expense (€ mn) Customer deposits (8) (5) (3) (3) Funding from central banks and deposits by banks (0) (0) (0) (3) 0 Subordinated loan stock (6) (6) (6) (6) (6) Repurchase agreements (2) (1) (1) (1) 0 Negative interest on loans and advances to banks and (5) (4) (4) (5) (6) central banks (21) (16) (14) (15) (15) Derivative financial instruments Total Interest Expense (12) (12) (11) (11) (10) (33) (28) (25) (26) (25) 1) Bank of Cyprus Holdings Interest income of non-legacy book for 3Q2020 increased from €73 mn to €74 mn since previously disclosed on 27 November 2020, following a transfer of €1 mn from liquids to non-legacy interest income Group Financial Results for the year ended 31 December 2020 99 66#67Income Statement by business line for FY2020 Group Financial Results for the year ended 31 December 2020 € mn Net interest income/(expense) Consumer SME Corporate Global Banking Banking Banking corporate International Wealth & Banking Markets RRD REMU Insurance Treasury Other Overseas Total 126 37 65 67 17 2 26 26 (14) I 3 330 Net fee & commission income/(expense) 37 9 11 7 50 3 8 (7) 2 25 (1) 144 Other income 2 1 1 6 3 1 9 56 CO 6 8 93 Total income 165 47 77 74 73 8 35 (5) 49 8 36 567 Total expenses (157) (22) (19) (12) (31) (6) (44) (8) (19) (14) (33) (5) (370) Operating profit/(loss) 8 25 58 62 62 42 2 (9) (13) 30 (6) (5) 197 Loan credit losses of customer loans net of gains/(losses) on derecognition of loans and (5) (1) (9) (11) (1) 1 (120) (1) (2) (149) changes in expected cash flows Impairment of other financial and non financial instruments (34) (4) (1) (3) (42) Provision for litigation, claims, regulatory and other matters Profit/(loss) before tax (6) (1) (7) 3 24 49 51 41 3 (129) (47) 30 (10) (5) (11) (1) Tax (0) (3) (6) (6) (5) (0) 16 6 (5) 1 (5) (1) (8) Profit attributable to non controlling interest 3 3 Profit/(loss) after tax - organic (attributable to the owners of the Company) 1 3 21 43 45 36 3 (113) (41) 25 (9) (7) (12) (6) 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) 1) Bank of Cyprus Holdings 67#68Group Financial Results for the year ended 31 December 2020 31.12.18 31.12.19 30.09.20 31.12.20 Helix 2 Cyprus 15,070 12,678 11,704 11,476 Russia 24 8 Risk Weighted Assets- Regulatory Capital Risk Weighted Assets by Geography (€ mn) Reconciliation of Group Equity to CET1 € mn Group Equity per financial statements Less: Intangibles² Less: Deconsolidation of insurance and other entities 31.12.20 pro forma³ 31.12.20 2,075 (255) 11,221 (27) (190) United Kingdom 84 48 48 23 23 23 Add: Regulatory adjustments (IFRS 9 and other items) 116 Less: Revaluation reserves and other unrealised items (251) Romania 38 29 22 26 26 CET 11 1,723 Greece 144 121 108 105 105 Risk Weighted Assets 11,635 Other 13 6 6 5 5 CET1 ratio 1 14.8% RWAs 15,373 12,890 11,888 11,635 (255) 11,380 CET1 ratio pro forma for Helix 23 15.2% RWA intensity 70% 61% 55% 54% 53% Equity and Regulatory Capital (€ mn) Risk Weighted Assets by type of risk (€ mn) 31.12.19 30.09.20 31.12.20 31.12.18 31.12.19 30.09..20 31.12.20 Helix 2 Credit risk 13,833 11,547 10,545 10,503 (255) 31.12.20 pro form a ³ 10,248 Total equity excl. non-controlling interests 2.260 2,106 2,051 CET1 capital 1,909 1,735 1,723 Market risk 2 Tier I capital 2,129 1,955 1,943 Operational risk 1,538 1,343 Total 15,373 12,890 1,343 11,888 1,132 11,635 1,132 Tier II capital 190 195 193 (255) 11,380 Total regulatory capital (Tier I + Tier II) 2,319 2,150 2,136 1) Allowing for IFRS 9 and temporary treatment for certain FVOCI instruments 2) As per amendments introduced with Regulation 2020/873 3) Calculations on a pro forma basis assume legal completion of both Helix 2 Portfolio A and Helix 2 Portfolio B Bank of Cyprus Holdings 68#69SREP and MREL requirements SREP requirements for 2020: CET1 ratio at 9.7% Group Financial Results for the year ended 31 December 2020 SREP requirements for 2020 Total Capital ratio at 14.5% 11.0% O-SII1 14.0% 0.5% 14.5% 1.0% O-SII CCB 2 1 10.5% 0.5% 1.0% 9.7% CCB2 2.5% 2.5% 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% AT1/ 1.5% 1.5% Total Pillar 1 4.5% 4.5% 4.5% Pillar 1 4.5% Pillar 1 of 8% 4.5% 2019 2020 2019 2020 MREL requirements 2020 post ECB announcement 1) • • . • In Feb 2021, the Bank received notification from the Single Resolution Board (SRB) of the draft decision for the binding minimum requirement for own funds and eligible liabilities (MREL) for the Bank, determined as the preferred resolution point of entry. As per the draft decision, the minimum MREL requirement is set at 23.32% of RWAs and 5.91% of leverage ratio exposure (LRE) and must be met by 31 Dec 2025. Furthermore, the Bank must comply by 1 Jan 2022 with an interim requirement of 14.94% of RWAs and 5.91% of LRE. The own funds used by the Bank to meet the combined buffer requirement (CBR) will not be eligible to meet its MREL requirements expressed in terms of RWAs. Once the above-mentioned decision becomes final (expected within Mar 2021), these requirements will replace those that were previously applicable The MREL ratio of the Bank as at 31 Dec 2020, calculated according to SRB's eligibility criteria currently in effect and based on the Bank's internal estimate, stood at 15.36% of RWAS (and at 14.92% of RWAs as at 1 Jan 2021) and at c.10% of LRE (and at c.10% of LRE as at 1 Jan 2021). Pro forma for NPE sales, the MREL ratio of the Bank as at 31 Dec 2020, calculated on the same basis, stood at 15.81%³ of RWAs (and at 15.36%³ of RWAs as at 1 Jan 2021). The MREL ratio expressed as % of RWAs does not include the capital used to meet the CBR amount, currently at 3.5% and expected to increase to 4% on 1 Jan 2022 The MREL requirement is in line with the Bank's expectations and funding plans The Group is currently evaluating opportunities for a potential Tier 2 capital transaction given the terms and maturity profile of the Bank's existing €250 mn 10NC5 Tier 2 notes, subject to market conditions and applicable regulatory authorisations. Separately the Group continues to evaluate opportunities to initiate its MREL issuance as part of its overall capital and funding strategy 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 2) 3) 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 Calculations on a pro forma basis assume legal completion of both Helix 2 Portfolio A and Helix 2 Portfolio B 69#70Buffer to MDA Restrictions Level & Distributable Items¹ Maximum Distributable Amount for BOCH CET1 Ratios 14.8% Group Financial Results for the year ended 31 December 2020 385 bps c..11.0% L-1.3% } 9.7% Unfilled AT1 + T2 capacity • The Bank and BOCH having obtained approval by their shareholders, the ECB and the Court of Cyprus and Irish High Court respectively, implemented a capital reduction process in Oct 2020, which resulted in the reclassification of c.€619 mn and €700 mn of share premium to distributable reserves respectively ⚫ No prohibition applies to the payment of coupons on any AT1 capital instruments issued by the Company and the Bank² • Significant CET1 MDA buffer³ (31 Dec 2020): c.385 bps (c.€448 mn) CET1 31 Dec 2020 31 Dec 20203 MDA Threshold CET1 Ratio (%) CET1 Req Unfilled AT1 & T2 Bucket Distance [ ] bps to MDA 72 1) 2) 3) Distributable Items definition per CRR 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, which will continue to be in effect in 2021, 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 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 increased by 0.5% every year thereafter, until being fully implemented 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 70#71Analysis of Deposits Deposits by Currency (€ bn) 16.69 16.25 16.30 16.38 16.53 1.29 0.29 0.10 0.29 0.10 1.28 1.31 -0.27-0.10 1.24 0.28 0.12 1.20 0.29 0.11 Other Currencies 15.01 14.58 14.62 14.74 14.93 GBP USD EUR Mar 20 Jun 20 Sep 20 Dec 20 Dec 19 Deposits by Type (€ bn) Group Financial Results for the year ended 31 December 2020 Dec 20 7% 2% 1% 90% 16.69 16.25 16.30 16.38 16.53 7.59 7.44 7.62 7.91 8.15 39% Current & demand 49% 1.57 1.65 1.76 1.82 1.97 accounts Savings accounts 7.53 7.16 6.92 6.65 6.41 12% Time deposits Dec 19 Mar 20 Jun 20 Sep 20 Dec 20 Deposits by customer Sector (€ bn) 16.69 16.25 16.30 16.38 16.53 Retail 4% 27% 10.15 SME 9.98 10.15 10.22 10.54 Global Corporate 0.69 0.80 0.71 0.77 0.68 0.79 0.64 0.83 5% 5.05 0.60 0.85 Corporate 64% 4.79 4.68 4.69 4.54 Dec 19 Mar 20 Jun 20 Sep 20 Dec 20 Bank of Cyprus Holdings 71#72Reduction in Overseas Non-Core Exposures Overseas non-core exposures (€ mn) 312 31 240 79 11 23 9 35 183 174 19 7 16 25 23 6220 152 12 10 21 193 164 139 135 128 121 Dec 17 Greece Serbia Bank of Cyprus Holdings Dec 18 Dec 19 Romania Russia UK Jun 20 Sep 20 Dec 20 Group Financial Results for the year ended 31 December 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 31 Dec 2020, there were €270 mn of overseas exposures in Greece (€270 mn at 30 September 2020) not identified as non-core exposures 72#73APPENDIX Glossary & Definitions Bank of Cyprus Holdings Group Financial Results for the year ended 31 December 2020 73#74Group Financial Results for the year ended 31 December 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 74#75Group Financial Results for the year ended 31 December 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 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 comprise: (i) gross loans and advances to customers measured at amortised cost before the residual fair value adjustment on initial recognition (including loans and advances to customers classified as non-current assets held for sale) and (ii) loans and advances to customers classified and measured at FVPL adjusted for the aggregate fair value adjustment 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 €230 mn at 31 December 2020 (compared to €243 mn at 30 September 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 €326 mn at 31 December 2020 (compared to €334 mn at 30 September 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 Bank of Cyprus Holdings 75 75#76Glossary & Definitions IB, W & M International Banking, Wealth and Markets Group Financial Results for the year ended 31 December 2020 IBU Legacy exposures Loan credit losses (PL) (previously 'Provision charge') Loan to Value ratio (LTV) Market shares Net Proceeds Net fee and commission income over total income Net interest margin (NIM) Net loans and advances to customers Net loan to deposit ratio New lending 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 41.9% at 31 December 2020, compared to 41.5% at 30 September 2020, 41.7% at 30 June 2020, 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 Fee and commission income less fee and commission expense divided by total income (as defined). 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 76#77Group Financial Results for the year ended 31 December 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, 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 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. (v) Performing forborne exposures under probation that present more than 30 days past due within the probation period. Exposures include all on and off balance sheet exposures, except those held for trading, and are categorised as such for their entire amount without taking into account the existence of collateral. The following materiality criteria are applied: •When the problematic exposures of a customer that fulfil the NPE criteria set out above are 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 problematic part of the exposure is classified as non-performing. •Material arrears/excesses are defined as follows: -Retail exposures: Total arrears/excesses amount greater than €100 -Exposures other than retail: Total arrears/excesses are greater than €500 and the amount in arrears/excess in relation to the customer's total exposure is at least 1%. NPEs may cease to be considered as non-performing only when all of the following conditions are met: (i) The extension of forbearance measures does not lead to the recognition of impairment or default. (ii) One year has passed since the forbearance measures were extended. (iii) Following the forbearance measures and according to the post-forbearance conditions, there is no past due amount or concerns regarding the full repayment of the exposure. (iv) No unlikely-to-pay criteria exist for the debtor. (v) The debtor has made post-forbearance payments of a non-insignificant amount of capital (different capital thresholds exist according to the facility type). New default definition effective from 1 January 2021 From 1 January 2021 two regulatory guidelines come into force that affect NPE classification and Days-Past-Due calculation. Specifically, the RTS on the Materiality Threshold of Credit Obligations Past Due (EBA/RTS/2016/0), and the Guideline on the Application of the Definition of Default under article 178 (EBA/RTS/2016/07). Bank of Cyprus Holdings 77#78Group Financial Results for the year ended 31 December 2020 Glossary & Definitions NPEs (continued) As a result of the above, the following changes will come into effect: 1.New Days-past-Due (DPD) counter: The new counter will begin counting DPD as soon as the arrears or excesses of an exposure reach the materiality threshold (rather than the first day of presenting any amount of arrears in excesses). Similarly, the counter will be set to zero when the arrears or excesses drop below the materiality thresholds. Payments to the exposure that do not impact the materiality of the remaining arrears / excesses will not impact the counter. New default definition effective from 1 January 2021 1.The NPE exit criteria will change and will now include: (i) a 3 month probation period for non-forborne exposures (ii) the exit of non-performing forborne accounts will become aligned with the distressed restructuring exit criteria i.e. a period of one year has passed since the latest of the following events: a. The restructuring date b. The date the exposure is classified as non-performing c. The payment of interest and capital for at least 12 months 2. As per the new definition of default, the 20% materiality threshold and the NPE due to >90 DPD will no longer apply for non-retail exposures i.e. any non-performing exposure of the customer, for any reason, will result in a non-performing classification at customer level. NPE coverage ratio (previously 'NPE Provisioning coverage ratio') NPE ratio NPES sales Non-legacy Phased-in Capital Conservation Buffer (CCB) NSFR OMV Operating profit 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. 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). 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 June 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). p.p. Bank of Cyprus Holdings percentage points 78#79Glossary & Definitions Group Financial Results for the year ended 31 December 2020 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 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 in August 2020 (Portfolio A) and to the portfolio of loans with a gross book value of €545 mn as at 30 September 2020 for which an agreement for sale was reached in January 2021 (Portfolio B). 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. Risk adjusted yield RRD RWAs RWA Intensity Special levy Stage 2 & Stage 3 Loans Tangible Collateral 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 Total expenses Bank of Cyprus Holdings 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 €1 mn for 4Q2020 (compared to €3 mn for 3Q2020, €3 mn for 2Q2020, €3 mn for 1Q2020 and €8 mn for 4Q2019). Restructuring costs relating to NPE sales amounted to c.€1.5 mn for 4Q2020 (compared to Nil for 3Q2020, €1 mn for 2Q2020, €3 mn for 1Q2020 and €10 mn for 4Q2019). Restructuring costs relating to the Voluntary Staff Exit Plan amounted to €6 mn for 4Q2020 and FY2020 (compared to €81 mn for 4Q2019 and FY2019). 79#80Glossary & Definitions Total income Total loan credit losses, impairments and provisions T2 Underlying basis Write offs Yoy Bank of Cyprus Holdings Total income comprises net interest income and non-interest income (as defined). Group Financial Results for the year ended 31 December 2020 Total loan credit losses, impairments and provisions comprises loan credit losses (as defined), plus impairments of other financial and non-financial assets, plus provisions for litigation, claims, regulatory and other matters. 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