Bank of Cyprus Credit Ratings and Financial Position
Limited economic effects on BOCH from Russia-Ukraine war
Direct Impact
•
.
No banking operations in Ukraine/Russia since 2015; <€1 mn net legacy exposure
as at 31 March 2023
Limited direct exposure to loans (c. €87 mn of which c.€80 mn is performing) related
to Russia and Belarus; granular portfolio and secured mainly by real estate
properties in Cyprus; none of which are under sanctions
Exposure to Russia and Belarus
Actions taken by the Bank to address legacy shortcomings
Since 2014, the Bank has engaged in a very demanding and rigorous anti-
financial crime remediation programme
The Bank fully adheres to all relevant UN, EU, USA, UK sanction
frameworks
• The Bank has implemented additional measures to monitor the
complicated sanctions environment in 2022 including systemic
enhancements, specialised training, revision of risk appetite and
continuous support by US lawyers specialised on sanctions
c.4%1
c.1%
of
deposits
of net
loans
Recent Progress
•
Indirect Impact
The economic effects result from higher inflation and a slowdown in activity, with
tourism sector most impacted; Tourism sector recovering to pre-pandemic
levels. Stronger than anticipated tourist arrivals in 2022 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 GDP² of which some relate to Russia/Ukraine
and thus adversely impacted; no credit risk exposure as sector not levered
By passport origin, defined as the country of passport of the Ultimate Beneficial Owner
1)
2)
In accordance with 2021 structure of the economy
Eliminating
Professional
Intermediaries
Customer
Terminations
and Rejections
44
1.601
currently
0
Intermediaries in 2014
Intermediaries
25.909 customers terminated/suspended (*)
12.028 potential new customers rejected
exclusively on Compliance (KYC/AML) grounds in years
2012-2022
(*) customers have multiple accounts
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