Investor Presentaiton

Provisioning Methodology Valuation of collateral - A Conservative approach for prudent calculation of provisions The valuation is a combination of: New valuations, from independent valuers for (i) New loans and a 2nd valuation for amounts > 3mn, (ii) performing accounts with exposures over 3 mn every 3 years (iii) Non performing/ restructured accounts with LTV > 50% All other cases monitored though the appropriate CBC indices and revalued only in cases where there is a material decline in a specific property Introduction of commercial property price index of the CBC for the monitoring of commercial buildings and land CBC guidelines are applied to marketable securities in order to ensure the appropriate valuation Foreign property mortgaged for facilities in Cyprus is revalued at specified intervals Restructuring / Recoveries cases follow separate valuation guidelines Key highlights of provisioning methodology Assumptions and Key drivers: Older valuations are adjusted/indexed to market values based on RICS's property price index to reflect current market conditions Conservative assumptions for taxes and expenses on the repossession and subsequent sale of the collateral The timing of recovery from mortgages has been estimated to be 3 years with the exception for specific cases where a different period has been used based on specific facts and circumstances. Projection of future property prices based on an internal model reviewed by auditors and external advisors, based on various parameters such as GDP growth, macroeconomic scenario for future changes in property values and other economic fundamentals. The cumulative average future change in property values during this period has been capped at 0% in accordance with the Loan Impairment and Provisioning Directives of 2014 and 2015 of the CBC. Bank of Cyprus 56 KOINO WKYMPιW

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