REG - Bank of Cyprus Hldgs - Interim Financial Report 2022 - 1
31/08/2022 07:16
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RNS Number : 7196X Bank of Cyprus Holdings PLC 31 August 2022
Ιnterim Financial Report 2022
Contents Page
Board of Directors and Executives 1
Forward Looking Statements and Notes 2
Interim Management Report 5
Consolidated Condensed Interim Financial statements
Interim Consolidated Income Statement 37
Interim Consolidated Statement of Comprehensive Income 38
Interim Consolidated Balance Sheet 39
Interim Consolidated Statement of Changes in Equity 40
Interim Consolidated Statement of Cash Flows 42
Notes to the Consolidated Condensed Interim Financial Statements
1. Corporate information 44
2. Unaudited financial statements 44
3. Summary of significant accounting policies 44
4. Going concern 48
5. Economic and geopolitical environment 49
6. Significant and other judgements, estimates and assumptions 50
7. Segmental analysis 57
8. Net losses on financial instruments 63
9. Staff costs and other operating expenses 64
10. Credit losses on financial instruments and impairment net of reversals of 65
non‑financial assets
11. Income tax 66
12. Earnings per share 67
13. Investments 68
14. Derivative financial instruments 69
15. Fair value measurement 71
16. Loans and advances to customers 76
17. Stock of property 76
18. Prepayments, accrued income and other assets 77
19. Non‑current assets and disposal groups held for sale 78
20. Funding from central banks 79
21. Customer deposits 80
22. Debt securities in issue and Subordinated liabilities 81
23. Accruals, deferred income, other liabilities and other provisions 82
24. Share capital 82
25. Pending litigation, claims, regulatory and other matters 84
26. Contingent liabilities and commitments 91
27. Cash and cash equivalents 91
28. Analysis of assets and liabilities by expected maturity 92
29. Risk management ‑ Credit risk 93
30. Risk management ‑ Market risk 116
31. Risk management ‑ Liquidity and funding risk 121
32. Capital management 125
33. Related party transactions 126
34. Group companies 129
35. Investments in associates and joint venture 131
36. Events after the reporting period 131
Independent Review Report to the Bank of Cyprus Holdings Public Limited 132
Company
Additional Risk and Capital Management Disclosures 134
Definitions and explanations of Alternative Performance Measures Disclosures 155
Board of Directors and Executives as at 30 August 2022
Board of Directors of Bank of Cyprus Holdings Public Limited Company Efstratios‑Georgios Arapoglou
CHAIRMAN
Lyn Grobler
VICE‑CHAIRPERSON
Arne Berggren
Panicos Nicolaou
Ioannis Zographakis
Maria Philippou
Nicos Sofianos
Paula Hadjisotiriou
Constantine Iordanou
Eliza Livadiotou
Executive Committee Panicos Nicolaou
CHIEF EXECUTIVE OFFICER
Dr. Charis Pouangare
DEPUTY CHIEF EXECUTIVE OFFICER & CHIEF OF BUSINESS
Eliza Livadiotou
EXECUTIVE DIRECTOR FINANCE & LEGACY
Demetris Th. Demetriou
CHIEF RISK OFFICER
Irene Gregoriou
EXECUTIVE DIRECTOR PEOPLE & CHANGE
George Kousis
ACTING EXECUTIVE DIRECTOR TECHNOLOGY & OPERATIONS
Company Secretary Katia Santis
Legal Advisers as to matters of Irish Law Arthur Cox
Legal Advisers as to matters of English and US Law Sidley Austin LLP
Legal Advisers as to matters of Cypriot Law Chryssafinis & Polyviou LLC
Statutory Auditors PricewaterhouseCoopers
One Spencer Dock
North Wall Quay
Dublin 1
D01 X9R7
Ireland
Registered Office 10 Earlsfort Terrace
Dublin 2
D02 T380
Ireland
BANK OF CYPRUS HOLDINGS GROUP Interim Financial Report 2022
Forward Looking Statements and Notes
Forward Looking Statement and Notes
This document contains certain forward looking statements which can usually be
identified by terms used such as 'expect', 'should be', 'will be' and similar
expressions or variations thereof or their negative variations, but their
absence does not mean that a statement is not forward looking. Examples of
forward‑looking statements include, but are not limited to, statements
relating to the Bank of Cyprus Holdings Group's (the Group) near term and
longer term future capital requirements and ratios, intentions, beliefs or
current expectations and projections about the Group's future results of
operations, financial condition, expected impairment charges, the level of the
Group's assets, liquidity, performance, prospects, anticipated growth,
provisions, impairments, business strategies and opportunities. By their
nature, forward‑looking statements involve risk and uncertainty because they
relate to events, and depend upon circumstances, that will or may occur in the
future. Factors that could cause actual business, strategy and/or results to
differ materially from the plans, objectives, expectations, estimates and
intentions expressed in such forward‑looking statements made by the Group
include, but are not limited to: general economic and political conditions in
Cyprus and other European Union (EU) Member States, interest rate and foreign
exchange fluctuations, legislative, fiscal and regulatory developments and
information technology, litigation and other operational risks, adverse market
conditions, the impact of outbreaks, epidemics or pandemics, such as the
COVID‑19 pandemic and ongoing challenges and uncertainties posed by the
COVID‑19 pandemic for businesses and governments around the world. Russian
invasion of Ukraine has led to heightened volatility across global markets and
to the coordinated implementation of sanctions on Russia, Russian entities and
nationals. The Russian invasion of Ukraine has already caused significant
population displacement, and if the conflict continues, the disruption will
likely increase. The scale of the conflict and the speed and extent of
sanctions, as well as the uncertainty as to how the situation will develop,
may have significant adverse effects on the market and macroeconomic
conditions, including in ways that cannot be anticipated. This creates
significantly greater uncertainty about forward‑looking statements. Should
any one or more of these or other factors materialise, or should any
underlying assumptions prove to be incorrect, the actual results or events
could differ materially from those currently being anticipated as reflected in
such forward looking statements. The forward‑looking statements made in this
document are only applicable as at the date of publication of this document.
Except as required by any applicable law or regulation, the Group expressly
disclaims any obligation or undertaking to release publicly any updates or
revisions to any forward looking statement contained in this document to
reflect any change in the Group's expectations or any change in events,
conditions or circumstances on which any statement is based.
Further Information
In accordance with Rule 26.1 of the Irish Takeover Rules, a copy of this
document will be available on the Company's website at
https://www.bankofcyprus.com/en‑gb/group/investor‑relations/possible‑offer/
by no later than 12.00 (noon) (Irish/UK time) on the business day following
publication of this document. The content of the website referred to in this
document is not incorporated into, and does not form part of, this document.
This document is not intended to, and does not, constitute or form part of any
offer, invitation or the solicitation of an offer to purchase, otherwise
acquire, subscribe for, sell or otherwise dispose of, any securities, or the
solicitation of any vote or approval in any jurisdiction, pursuant to this
document or otherwise. Any offer will be made solely by certain offer
documentation which will contain the full terms and conditions of any offer,
including details of how it may be accepted.
This document has been prepared in accordance with and in compliance with the
applicable laws of Ireland, Cyprus and England and information disclosed may
not be the same as that which would have been prepared in accordance with the
laws of other jurisdictions.
The distribution of this document in jurisdictions other than Ireland, Cyprus
and the United Kingdom and the availability of any offer to shareholders of
the Company who are not resident in Ireland, Cyprus or the United Kingdom may
be affected by the laws of relevant jurisdictions. Therefore, any persons who
are subject to the laws of any jurisdiction other than Ireland, Cyprus or the
United Kingdom or shareholders of the Company who are not resident in Ireland,
Cyprus or the United Kingdom will need to inform themselves about, and
observe, any applicable requirements.
Jurisdiction
The Company is a public limited company incorporated in Ireland with relevant
securities listed and admitted to trading on the Main Market of the London
Stock Exchange and on the Cyprus Stock Exchange. As a result, any transaction
to acquire the Company which constitutes a "takeover bid" (as defined in
Directive 2004/25/EC (the "Takeover Bids Directive")) will be subject to the
shared jurisdiction of the Irish Takeover Panel and the Cyprus Securities
Exchange Commission in line with the procedures set out in Article 4 of the
Takeover Bids Directive, as implemented in Ireland and Cyprus. Any transaction
to acquire control of the Company which proceeds otherwise than by way of
takeover bid will be subject to the jurisdiction of the Irish Takeover Panel
under the Irish Takeover Rules. Prior to a determination being made as to the
manner in which any transaction to acquire the Company would be implemented,
the possible offer is subject to the jurisdiction of both the Irish Takeover
Panel and the Cyprus Securities Exchange Commission. There is no certainty
that any formal offer to acquire the Company will be made nor as to the terms
on which any offer might be made.
Responsibility Statement
The Directors of the Company accept responsibility for the information
contained in this document. To the best of their knowledge and belief (having
taken all reasonable care to ensure such is the case), the information
contained in this document is in accordance with the facts and does not omit
anything likely to affect the import of such information.
Disclosure requirements of the Irish Takeover Rules
Under Rule 8.3(a) of the Irish Takeover Rules, any person who is 'interested'
(directly or indirectly) in 1% or more of any class of 'relevant securities'
of the Company must make an 'opening position disclosure' by no later than
3.30pm (Irish/UK time) on 2 September 2022. An 'opening position disclosure'
must contain the details specified in Rule 8.6(a) of the Irish Takeover Rules,
including details of the person's interests and short positions in any
'relevant securities' of the Company. Relevant persons who deal in any
'relevant securities' of the Company prior to the deadline for making an
'opening position disclosure' must instead make a dealing disclosure as
described below.
Under Rule 8.3(b) of the Irish Takeover Rules, any person 'interested'
(directly or indirectly) in 1% or more of any class of 'relevant securities'
of the Company must disclose all 'dealings' in such 'relevant securities'
during the 'offer period'. The disclosure of a 'dealing' in 'relevant
securities' by a person to whom Rule 8.3(b) applies must be made by no later
than 3.30 pm (Irish/UK time) on the business day following the date of the
transaction. A dealing disclosure must contain the details specified in Rule
8.6(b) of the Irish Takeover Rules, including details of the dealing concerned
and of the person's interests and short positions in any 'relevant securities'
of the Company.
In addition, Lone Star must make an 'opening position disclosure' by no later
than 12.00 (noon) (Irish/UK time) on 2 September 2022 and disclose details of
any 'dealings' by it or any person 'acting in concert' with it in 'relevant
securities' of the Company by no later than 12.00 (noon) (Irish/UK time) on
the business day following the date of the transaction.
All 'dealings' in 'relevant securities' of the Company by Lone Star, or by any
party acting in concert with Lone Star, must also be disclosed by no later
than 12 noon (Irish/UK time) on the 'business' day following the date of the
relevant transaction. If two or more persons co‑operate on the basis of an
agreement, either express or tacit, either oral or written, to acquire for one
or more of them an interest in relevant securities, they will be deemed to be
a single person for these purposes.
Disclosure tables, giving details of the companies in whose 'relevant
securities' 'opening positions' and 'dealings' should be disclosed, can be
found on the Irish Takeover Panel's website at www.irishtakeoverpanel.ie.
'Interests' in securities arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an 'interest' by
virtue of the ownership or control of securities, or by virtue of any option
in respect of, or derivative referenced to, securities.
Terms in quotation marks in this section are defined in the Irish Takeover
Rules, which can also be found on the Irish Takeover Panel's website. If you
are in any doubt as to whether or not you are required to disclose a dealing
or an opening position under Rule 8, please consult the Irish Takeover Panel's
website at www.irishtakeoverpanel.ie or contact the Irish Takeover Panel on
telephone number +353 1 678 9020.
Disclosure requirements of the Cypriot Takeover Bids Law
In addition to the requirements under Rule 8 of the Irish Takeover Rules as
outlined above, under section 26 of the Cypriot Takeover Bids Law, during the
'period of the takeover bid':
a) Lone Star and every person holding a percentage of five
per cent (5%) or more of the voting rights of the Company or Lone Star, must
announce immediately, in accordance with the provisions of the Cypriot
Takeovers Bids Law, every acquisition of securities in the Company or Lone
Star made by themselves or by persons acting in their own name but on their
behalf or in concert with them or by undertakings controlled by them, as well
as the acquisition price and any voting rights already held in that company;
and
b) every person acquiring a percentage equal to half per
cent (0.5%) or greater of the voting rights of the Company or Lone Star, must
make an announcement for this acquisition in accordance with the provisions of
the Cypriot Takeovers Bids Law, as well as every subsequent acquisition of
securities of these companies by themselves or by persons acting in their own
name but on their behalf or in concert with them or by undertakings controlled
by them, as well as the acquisition price and any voting rights already held
in that company.
Terms in quotation marks in this section are defined in the Cypriot Takeover
Bids Law, which can also be found on the website of the Securities and
Exchange Commission of Cyprus at www.cysec.gov.cy.
Profit Forecast / Asset Valuations / Quantified Financial Benefit Statement
The financial results for the period ended 30 June 2022 provided in this
document constitute a profit estimate for the purposes of the Irish Takeover
Rules and are subject to Rule 28.5. Other than the foregoing, no statement in
this document is intended to constitute a profit forecast for any period, nor
should any statements be interpreted to mean that earnings or earnings per
share will necessarily be greater or lesser than those for the relevant
preceding financial periods for the Company. No statement in this document
constitutes an asset valuation or quantified financial benefit statement.
Non‑IFRS performance measures
Bank of Cyprus Holdings Public Limited Company's (the Company) management
believes that the non‑IFRS performance measures included in this document
provide valuable information to the readers of the Interim Financial Report as
they enable the readers to identify a more consistent basis for comparing the
Group's performance between financial periods and provide more detail
concerning the elements of performance which management are directly able to
influence or are relevant for an assessment of the Group. They also reflect an
important aspect of the way in which the operating targets are defined and
performance is monitored by the Group's management. However, any non‑IFRS
performance measures in this document are not a substitute for IFRS measures
and readers should consider the IFRS measures as the key measures of the 30
June position. Refer to 'Definitions and explanations on Alternative
Performance Measures Disclosures' on pages 155 to 169 of the Interim Financial
Report for the six months ended 30 June 2022 for further information,
reconciliations with Consolidated Condensed Interim Financial Statements and
calculations of non‑IFRS performance measures included throughout this
document and the most directly comparable IFRS measures.
The Interim Financial Report for the six months ended 30 June 2022 is
available on the Group's website www.bankofcyprus.com (Group/Investor
Relations) (the Group's website).
The Interim Financial Report for the six months ended 30 June 2022 of the
Group is originally issued in English. The Greek translation of the Interim
Financial Report for the six months ended 30 June 2022 will be available on
the Group's website from 31 August 2022. In case of a difference or
inconsistency between the English document and the Greek document, the English
document prevails.
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