Financial Analysis and Currency Deposits
Limited economic effects on BOCH from Russia-Ukraine war
Direct Impact
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No banking operations in Ukraine/Russia since 2015; <€1 mn net legacy
exposure as at 30 Jun 2022
No exposure to Russian bonds nor to banks which are the subject of sanctions
Limited direct exposure to loans (c.€108 mn of which c.€95 mn is performing)
related to Russia, Belarus and Ukraine; granular portfolio and secured mainly
by real estate properties in Cyprus; none of which are under sanctions
Only c.3% of the Group's 2021 net F&C income is from Russian, Ukrainian
and Belarusian Ultimate Beneficiary Owners
Exposure to Russia, Belarus & Ukraine
5%
of deposits
c.1%
of net loans
only c.3%
of 2021 net
F&C income
Indirect Impact
• The economic effects are expected to come from higher inflation and a
slowdown in activity, with tourism sector likely most impacted
Tourism sector recovering to pre-pandemic levels. Stronger than
anticipated tourist arrivals from markets other than Russia (like UK, Greece,
Germany)
Cyprus is not an importer of Russian oil/gas though it is indirectly affected
by pricing pressures in the international energy markets. Cyprus mainly
imports oil from other countries (like Greece, Italy, the Netherlands), though a
steady increase in contribution from renewables is noted
• Services accounting for c. 10% of GDP1 of which some relate to
Russia/Ukraine and thus expected to be adversely impacted; no credit risk
exposure as sector not levered
• Between 2018-2020, Cyprus recorded net FDI outflow to Russia; Special
Purpose Entities make a large contribution to Cypriot FDI; these entities have
similar inward and outward income due to the structure of their financial
assets and liabilities
Shipping in Cyprus is German dominated, so there will be no impact on this
sector from the sanctions on Russian ships
1)
In accordance with 2020 structure of the economy
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