WIXLIB

AnnouncementGroup Financial Results for the quarter ended 31 March 2021Nicosia, 25 May 20211

Key Highlights for the quarter ended 31 March 2021COVID-19 Developments Cypriot economy gradually recovering Continuing to support this recovery; new lending of 487 mn, up 30% qoq Cyprus ranks 4th in the EU in COVID-19 vaccine doses administered per 100 people1 48% of adult population in Cyprus already vaccinated with first dose2 and on track to reach target of 65% byend of June 2021Positive Organic Performance Total income of 136 mn, down 3% qoq, Operating profit of 45 mn broadly flat qoq Cost of risk of 66 bps, improved by 33 bps qoq Organic profit after tax of 14 mn, up 12 mn qoq Profit after tax of 8 mn, vs loss after tax of 49 mn in 4Q2020Operating Efficiency Total operating expenses3 of 82 mn, down 9% qoq, driven by seasonality Cost to income ratio3 at 60%, down 4 p.p. qoqGood Capital, Strong Liquidity CET1 ratio of 14.6%4,5 and Total Capital ratio of 18.3%4,5 Successful refinancing of Tier 2 in April 2021 at a significantly lower coupon rate; Total Capital ratio expectedto increase to 19.2%4,5,6 Deposits at 16.3 bn, broadly flat qoq; Significant surplus liquidity of 4.9 bn (LCR at 284%)Balance Sheet Repair Continuing 0.5 bn NPE sale (Helix 2 Portfolio B) signed in January 2021 NPEs at 1.7 bn4 ( 0.7 bn net4) Gross NPE ratio at 16%4 stable qoq4 (7% net4); organic NPE reduction impacted by lockdown Coverage maintained at 59%4 95% of performing loans7 under expired payment deferrals with an instalment due by 14 May 2021, presentedno arrears1.According to ECDC ta as at 21 May 2021. 20% have completed their vaccination regime (Source: Ministry of Health)3.Excluding special levy and contributions to SRF and DGF4.Pro forma for Helix 2 (Portfolio A and B). Calculations on a pro forma basis assume legal completion of the transaction5.Allowing for IFRS 9 and temporary treatment for certain FVOCI instruments transitional arrangements6.On the basis of 31 March 2021 figures. The Total Capital ratio pro forma for Helix 2 is expected to increase to 19.5%, including28 bps relating to the outstanding Existing Notes (remaining after the Tender Offer) of 43 mn. The Existing Notes areredeemable at the option of the Bank (subject to applicable regulatory consents) in January 2022.7.As at 31 March 20212

Group Chief Executive Statement“The first quarter of the year has again been a period characterised by on-going pandemic-related disruption. Despite thesignificant progress made both within Cyprus and globally with the vaccine roll-out programme, the day-to-day operatingenvironment continues to be challenging, and the first quarter saw restrictions remaining in place within Cyprus. As such,our priority during the period has continued to be focused on providing support to our customers, colleagues and community.Although the pace of economic recovery in Cyprus temporarily slowed in the first quarter as result of the restrictions, wehave continued to support the country’s return to growth, extending 487 mn of new loans in the period, the strongestquarter in new lending since the pandemic struck a year ago.This lending performance, allied to the recent relaxation of restrictions and the progress of the vaccination programmesboth in Cyprus and abroad support our confidence in the economic recovery gathering pace. As at 21 May 2021, 48% ofthe adult population in Cyprus have been vaccinated with the first dose, on track with the target of reaching 65% by the endof June. Also, Cyprus ranks 4th in the EU in COVID-19 vaccine doses administered per 100 people. As a bank we remainready to do all we can to ensure Cyprus recovers quickly and emerges strongly from the crisis.During the first quarter of the year, we generated total income of 136 mn and a positive operating result of 45 mn. Costof risk was reduced by 33 bps to 66 bps. We delivered an underlying profit of 14 mn and the overall result for the quarterwas a profit after tax of 8 mn. At the same time, we reduced our total operating expenses (excluding levies andcontributions) by 9 mn or 9% on the prior quarter to 82 mn, reflecting our on-going efforts to contain costs.The Bank’s capital position remains good and comfortably in excess of our regulatory requirements. As at 31 March 2021,our capital ratios (on a transitional basis) were 18.3% for the Total Capital ratio and 14.6% for CET1 ratio, both pro formafor NPE sales. Our liquidity position also remains strong and we continue to operate with almost 5 bn surplus liquidity andan LCR at 284%. Deposits on our balance sheet remained broadly flat in the quarter at 16.3 bn.In April 2021, we successfully refinanced our Tier 2 capital, further optimising the capital structure of the Group. Theissuance of 300 mn Tier 2 Capital Notes is expected to increase the Group’s Total Capital ratio pro forma for NPE salesby c.100 bps to 19.2%. The transaction has also enhanced the diversification of our investor base, and the significantreduction in the coupon to 6.625% confirms market recognition of the significant progress made in evolving the Group’sfinancial profile.Balance sheet repair has continued in the first quarter of the year. As previously noted, in January 2021, despite thechallenging environment, we reached agreement for the sale of a further 500 mn NPE portfolio, continuing to deliver onone of the Group’s strategic priorities of improving asset quality through the reduction of NPEs. Overall, since the peak in2014, we have now reduced the stock of NPEs by 13.3 bn or 89% to 1.7 bn and the NPE ratio by 47 percentage points,from 63% to 16%, pro forma for NPE sales. This remained stable qoq as organic NPE reduction was impacted by thelockdown. Whilst we expect this to recover in the coming quarters, we continue to actively explore strategies to acceleratede-risking including further portfolio sales, and remain on track with achieving a single digit NPE ratio by the end of 2022.At the same time, we continue to closely monitor the performance of loans which had been granted payment deferrals inthe previous year, and we remain cautiously optimistic based on their performance to date.As the leading bank in Cyprus, it is both our focus and purpose to help support the country’s return to growth, and weremain confident about the future and committed to playing our part in that. Despite the challenges of the last year havingpersisted in the quarter, we, as a Bank, have continued to make progress, and remain absolutely committed to our strategicinitiatives of completing de-risking, revenue enhancement and cost reduction through business transformation in order todeliver shareholder returns in the medium term.”Panicos Nicolaou3

A. Group Financial Results – Underlying BasisUnaudited Interim Condensed Consolidated Income Statement mn1Q20211Q20204Q2020(1q vs 4q) %yoy %Net interest income768580-5%-10%Net fee and commission incomeNet foreign exchange gains and net losses onfinancial instrument transactions anddisposal/dissolution of subsidiaries andassociatesInsurance income net of claims andcommissionsNet gains/(losses) from revaluation anddisposal of investment properties and ondisposal of stock of propertiesOther -19%Total income136145142-3%-6%Staff costs(50)(49)(50)1%2%Other operating expensesSpecial levy and contributions to SingleResolution Fund (SRF) and DepositGuarantee Fund (DGF)(32)(35)(41)-21%-6%(9)(9)(6)48%-1%Total -(3)--8(26)(49)--Operating profitLoan credit lossesImpairments of other financial and nonfinancial assetsProvisions for litigation, claims, regulatory andother mattersTotal loan credit losses, impairments andprovisionsProfit/(loss) before tax and non-recurringitemsTaxLoss/(profit) attributable to non-controllinginterestsProfit/(loss) after tax and before nonrecurring items (attributable to the ownersof the Company)Advisory and other restructuring costs –organicProfit/(loss) after tax – organic (attributableto the owners of the Company)Provisions/net loss relating to NPE sales,including restructuring expenses1Restructuring costs – Voluntary Staff Exit Plan(VEP)DTC levyProfit/(loss) after tax (attributable to theowners of the Company)4

B. Group Financial Results – Underlying Basis (continued)Unaudited Consolidated Income Statement – Key Performance RatiosKey Performance Ratios2Net Interest Margin (annualised)Cost to income ratioCost to income ratio excluding special levy andcontributions to SRF and DGFOperating profit return on average assets(annualised)Basic earnings/(losses) per share attributable tothe owners of the Company - organic ( cent)Basic earnings/(losses) per share attributable tothe owners of the Company ( cent)1Q20211Q20204Q2020(1q vs 4q) %yoy %1.63%1.95%1.75%-12 bps-32 bps67%64%69%-2 p.p. 3 p.p.60%58%64%-4 p.p. 2 p.p.0.8%1.0%0.8%--0.2 641. ‘Provisions/net (loss)/profit relating to NPE sales, including restructuring expenses’ refer to the net loss on transactions completed during each year/period, net loan creditlosses on transactions under consideration, as well as the restructuring costs relating to these trades. For further details please refer to Section A.2.4. 2. Including the NPEportfolios classified as “Non-current assets and disposal groups held for sale”. p.p. percentage points, bps basis points, 100 basis points (bps) 1 percentage pointCommentary on Underlying BasisThe financial information presented in this Section provides an overview of the Group financial results for the quarter ended31 March 2021 on the ‘underlying basis’ which the management believes best fits the true measurement of the performanceand position of the Group, as this presents separately the exceptional and one off items.Reconciliations between the statutory basis and the underlying basis are included in section F.1 ‘Reconciliation of incomestatement between statutory and underlying basis’ and in Section G. ‘Definitions and Explanations’, to facilitate thecomparability of the underlying basis to the statutory information.With respect to the ‘Balance Sheet Analysis’, please note the following in relation to the disclosure of pro forma figures andratios with respect to Project Helix 2 (as explained in the paragraph below). All relevant figures are based on 31 March2021 financial results, unless otherwise stated. Numbers on a pro forma basis are based on the 31 March 2021 underlyingbasis figures and are adjusted for Project Helix 2, and assume its completion, which remains subject to required customaryregulatory and other approvals. Where numbers are provided on a pro forma basis this is stated.Project Helix 2 refers to the agreement the Group reached in August 2020 with funds affiliated with Pacific InvestmentManagement Company LLC (“PIMCO”), for the sale of a portfolio of loans with gross book value of 0.9 bn (Helix 2 PortfolioA), as well as to the agreement the Group reached with PIMCO in January 2021 for the sale of an additional portfolio ofloans with gross book value of 0.5 bn (Helix 2 Portfolio B). Further details are provided in Section A.1.5 ‘Loan portfolioquality’.5