Last checked at 17 Mar 2022 09:37
Announcement
Restrictive measures of the Council of the European Union and other sanctions against Russia in response to the crisis in Ukraine / War in Ukraine - Economic consequences / risks and uncertainties
Nicosia, 17 March 2022
Following the imposition of restrictive measures by the Council of the European Union and other jurisdictions against Russia and Belarus, and various Russian and Belarusian entities and individuals, in response to the crisis in Ukraine, Bank of Cyprus Holdings Public Limited Company ("BOC Holdings" and, together with its subsidiaries, the "Group") provides the following update.
The Group does not have any banking operations in Russia or Ukraine, following the sale of its operations in Ukraine in 2014 and in Russia in 2015. The Group has a legacy net exposure of c.€10 mn1 in Russia which is being run down.
The Group has no exposure to Russian bonds or banks which are the subject of sanctions. The Group currently has credit balances in nostro accounts held with subsidiaries of European banks in Russia amounting to c.€13 mn2.
The Group has limited direct exposure to loans related to Russia, Ukraine and Belarus, representing c.0.4%1 of total assets or c.1%1 of net loans. The net book value of these loans stood at c.€110 mn as at 31 December 2021, of which c.€94 mn are performing, whilst the remaining c.€16 mn were classified as NPEs well before the current crisis. The portfolio is granular and secured mainly by real estate properties in Cyprus.
Customer deposits related to Russian, Ukrainian and Belarusian customers account for only 6%1 of total customer deposits. This exposure is not material, given the Group's strong liquidity position. The Group operates with a significant surplus liquidity of over €6 bn1 (LCR ratio of c.300%1).
Although the Group's direct exposure to Russia, Ukraine or Belarus is limited, the crisis in Ukraine may have an adverse impact on the Cypriot economy, mainly due to a negative impact on the tourism and professional services sectors, increasing energy prices resulting in inflationary pressures, and disruptions to global supply chains. In the event that a significant decrease in the number and volume of transactions occur as a result of the crisis, this may adversely impact transactional net fee and commission income for the Group, particularly in international banking services.
Overall, the Group expects limited impact from its direct exposure, while any indirect impact will depend on the duration and severity of the crisis and its impact on the Cypriot economy, which remains uncertain at this stage.
The Group will continue to closely monitor the situation, taking all necessary and appropriate measures to minimise the impact on its operations and financial performance, as well as to manage all related risks and comply with the applicable sanctions.
For further information, please contact Investor Relations at investors@bankofcyprus.com.
1. As at 31 December 2021
2. As at 16 March 2022 (RUB:EUR 109.1)
Group Profile
The Bank of Cyprus Group is the leading banking and financial services group in Cyprus, providing a wide range of financial products and services which include retail and commercial banking, finance, factoring, investment banking, brokerage, fund management, private banking, life and general insurance. At 31 December 2021, the Bank of Cyprus Group operated through a total of 90 branches in Cyprus, of which 10 operated as cash offices. Bank of Cyprus also has representative offices in Russia, Ukraine and China. At 31 December 2021, the Group's Total Assets amounted to €25.0 bn and Total Equity was €2.1 bn. The Bank of Cyprus Group employed 3,407 staff worldwide. The Bank of Cyprus Group comprises Bank of Cyprus Holdings Public Limited Company, its subsidiary Bank of Cyprus Public Company Limited and its subsidiaries.