Investor Presentaiton
B. Preliminary Group Financial Results - Underlying Basis (continued)
B.2. Balance Sheet Analysis (continued)
B.2.3 Funding and Liquidity (continued)
Debt securities in issue (continued)
In June 2021, the Bank executed its inaugural MREL transaction issuing €300 mn of senior preferred notes (the "SP Notes").
The SP Notes were priced at par with a fixed coupon of 2.50% per annum, payable annually in arrears and resettable on
24 June 2026. The maturity date of the SP Notes is 24 June 2027 and the Bank may, at its discretion, redeem the SP Notes
on 24 June 2026, subject to meeting certain conditions as specified in the Terms and Conditions, including applicable
regulatory consents. The SP Notes comply with the criteria for MREL and contribute towards the Bank's MREL
requirements.
Liquidity
At 31 December 2022, the Group Liquidity Coverage Ratio (LCR) stood at 291% (compared to 300% at 30 September 2022
and to 298% at 31 December 2021), well above the minimum regulatory requirement of 100%. The LCR surplus as at 31
December 2022 amounted to €7.2 bn (compared to €6.8 bn at 30 September 2022 and €6.3 bn at 31 December 2021),
well positioned to benefit from further interest rate increases. The increase in liquidity surplus in 4Q2022 reflects primarily
the increase in customer deposits and the cash consideration received with Helix 3 completion.
At 31 December 2022, the Group Net Stable Funding Ratio (NSFR) stood at 168% (compared to 160% at 30 September
2022 and 147% at 31 December 2021), well above the minimum regulatory requirement of 100%.
B.2.4 Loans
Group gross loans totalled €10,217 mn at 31 December 2022, compared to €10,913 mn at 30 September 2022 and
€10,856 mn at 31 December 2021, reduced by 6% since the beginning of the year attributed mainly to the completion of
Project Helix 3.
New lending granted in Cyprus reached €444 mn for 4Q2022 (compared to €489 mn for 3Q2022, €537 mn for 2Q2022 and
€622 mn for 1Q2022) and totalled a record of €2,092 mn for FY2022 (compared to €1,792 mn for FY2021) up by 17% yoy,
whilst maintaining strict lending criteria. The yoy increase is driven by the increase in lending activity across all sectors, with
corporate being the main driver. New lending in 4Q2022 comprised €234 mn of corporate loans, €165 mn of retail loans (of
which €122 mn were housing loans), €44 mn of SME loans and €1 mn of shipping and international loans.
At 31 December 2022, the Group net loans and advances to customers totalled €9,953 mn (compared to €10,088 mn at 30
September 2022 and €9,836 mn at 31 December 2021, excluding those classified as held for sale), increased by 1% since
the beginning of the year.
The Bank is the largest credit provider in Cyprus with a market share of 40.9% at 31 December 2022, compared to 41.1%
at 30 September 2022 and 38.8% at 31 December 2021, increased by 2 p.p. yoy despite the derecognition of Helix 3
portfolio following completion.
B.2.5 Loan portfolio quality
The Group has continued to make steady progress across all asset quality metrics. As the balance sheet de-risking is
largely complete, the Group's priorities remain unchanged; maintaining high quality new lending with strict underwriting
standards and preventing asset quality deterioration following the ongoing macroeconomic uncertainty.
The loan credit losses for 4Q2022 totalled €11 mn (excluding 'Provisions/net (loss)/profit relating to NPE sales'), compared
to €13 mn for 3Q2022 and totalled €47 mn for FY2022, compared to €66 mn for FY2021. Further details regarding loan
credit losses are provided in Section B.3.3 'Profit before tax and non-recurring items'.
The elevated inflation combined with the rising interest rate environment are expected to weigh on the purchasing power
of the Bank's customers. Despite these persisting pressures there are no signs of asset quality deterioration to date. While
defaults have been limited, the additional monitoring and provisioning for sectors vulnerable to the deteriorated
macroeconomic environment remain in place to ensure that potential difficulties in the repayment ability are identified at an
early stage, and appropriate solutions are provided to viable customers.
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