Investor Presentaiton
€ mn
B. Preliminary Group Financial Results - Underlying Basis (continued)
B.3. Income Statement Analysis (continued)
B.3.2 Total expenses
FY2021
FY2022
4Q2022
3Q2022
2Q2022
1Q2022
god +%
yoy +%
(restated¹)
Staff costs
(190)
(202)
(44)
(46)
(50)
(50)
-6%
-6%
Other operating expenses
(153)
(145)
(45)
(35)
(37)
(36)
25%
5%
Total operating expenses
(343)
(347)
(89)
(81)
(87)
(86)
8%
-1%
Special levy on deposits and
(38)
(36)
(11)
(10)
(7)
(10)
17%
6%
other levies/contributions
Total expenses
(381)
(383)
(100)
(91)
(94)
(96)
9%
-1%
Cost to income ratio²
54%
66%
44%
53%
61%
66%
-9 p.p.
-12 p.p.
Cost to income ratio excluding
special levy on deposits and
49%
60%
38%
47%
57%
59%
-9 p.p.
-11 p.p.
other levies/contributions²
1. Comparative information was restated following a reclassification of approximately €1 million loss relating to disposal/dissolution of subsidiaries and associates from
'Net foreign exchange gains and net gains/(losses) on financial instruments' to 'Other income'
2. Including the NPE portfolios classified as "Non-current assets and disposal groups held for sale", where relevant.
p.p. = percentage points, bps = basis points, 100 basis points (bps) = 1 percentage point
Total expenses for FY2022 were €381 mn (compared to €383 mn for FY2021), down 1% yoy, 50% of which related to staff
costs (€190 mn), 40% to other operating expenses (€153 mn) and 10% to special levy on deposits and other
levies/contributions (€38 mn). Total expenses for 4Q2022 were €100 mn, compared to €91 mn for 3Q2022, up 9%
The increase is driven by the 25% qoq increase in other operating expenses.
Total operating expenses for 4Q2022 were €89 mn (compared to €81 mn for 3Q2022) up 8% qoq driven by inflationary
pressures and seasonally higher other operating expenses. Total operating expenses totalled €343 mn for FY2022,
compared to €347 mn for FY2021 (down by 1% yoy), remaining under control on the back of successful completion of
efficiency actions, despite elevated inflation.
Staff costs for FY2022 were €190 mn, compared to €202 mn for FY2021, down 6% yoy, resulting from the Voluntary Staff
Exit Plans that took place during 2022. Staff costs for 4Q2022 amounted to €44 mn down 6% qoq mainly due to saving
from the completion of the VEP in July 2022 partially offset by the impact of the introduction of new pay grading structure
and long-term incentive plan. The VEP led to the reduction of the Group's full time employees by 16%, at a total cost of
€104 mn of which €101 mn was recorded in the consolidated income statement in 3Q2022. Following the completion of the
VEP, the gross annual savings are estimated at c.€37 mn or 19% of staff costs with a payback period of 2.7 years. The
estimated savings of the VEP are expected to be partially offset by the renewal of the collective agreement in 2023.
In addition, in January 2022 the Group through one of its subsidiaries completed a Voluntary Staff Exit Plan (VEP), through
which a small number of its employees were approved to leave at a total cost of €3 mn, recorded in the consolidated income
statement in 1Q2022 as a non-recurring item in the underlying basis.
The Group employed 2,889 persons as at 31 December 2022 compared to 2,955 persons as at 30 September 2022 and
3,438 persons as at 31 December 2021.
In July 2021, the Bank reached agreement with the Cyprus Union of Bank Employees for the renewal of the collective
agreement for the years 2021 and 2022. The agreement related to certain changes including the introduction of a new pay
grading structure linked to the value of each position of employment, and of a performance-related pay component as part
of the annual salary increase, both of which have been long-standing objectives of the Bank and are in line with market
best-practice. The impact of the renewal was an increase in staff costs for 2022 by 3-4% per annum, in line with the impact
of renewals in previous years.
During December 2022 the Group has granted to eligible employees share awards under a long-term incentive plan ("2022
LTIP" or the "2022 Plan"). The 2022 Plan involves the granting of share awards and is driven by scorecard achievement,
with measures and targets set to align pay outcomes with the delivery of the Group's strategy. The employees eligible for
2022 LTIP are the members of the Extended EXCO. The 2022 LTIP stipulates that performance will be measured over a 3
year period and financial and non-financial objectives to be achieved. At the end of the performance period, the performance
outcome will be used to assess the percentage of the awards that will vest.
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