TIDMBOCH
RNS Number : 0461G
Bank of Cyprus Holdings PLC
27 February 2018
Announcement
Preliminary Group Financial Results for the year ended 31
December 2017
Nicosia, 27 February 2018
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014.
Key Highlights for the year ended 31 December 2017
Continued progress on Balance Sheet repair
* Eleven consecutive quarters of organic NPE reduction
* NPEs down by EUR2.2 bn (20%) yoy to EUR8.8 bn (down
by 41% since December 2014)
* NPE ratio at 47%; NPE coverage at 48%, rising to 51%
after IFRS 9 First Time Adoption (FTA)
* Continue to explore other structured solutions to
accelerate de-risking
Adequate capital position
* CET1 at 12.7% and 12.2% FL
* Total Capital ratio at 14.2%
* Allowing for transitional arrangements, estimated
capital impact of c. 9 bps from IFRS 9 FTA in 2018
Improved funding and liquidity position
* Deposits up EUR1.3 bn (+8%) yoy
* Deposits up EUR535 mn in 4Q2017 facilitating full
compliance with liquidity requirements on 1 January
2018
* Loan to deposit ratio at 82%
Operating performance
* NIM of 3.02% for FY2017; Total income of EUR907 mn
for FY2017
* Operating profit of EUR485 mn for FY2017
* Total provisions and impairments of EUR942 mn for
FY2017, resulting in EUR552 mn loss after tax
* Cost to income ratio of 47% for FY2017
2018 Target
* EPS guidance of c.EUR0.40 maintained
* CET1 >13.0% and Total capital ratio >15.0%
* EUR2 bn organic NPE reduction
------------------------------------------------------------------
Group Chief Executive Statement
"Our results this quarter and for the full year reflect
continued delivery against our core objective of balance sheet
repair. In 2018 we expect a normalised cost of risk that should
result in a return to profitability and allow an organic rebuild of
capital.
We have maintained good momentum in organic NPE reduction. This
was the eleventh consecutive quarter of material NPE reduction. We
reduced the stock of NPEs by EUR2.2 bn since the beginning of the
year and by 41% since December 2014. During 2017 we increased
coverage levels against non-performing exposures to 48%, above the
EU average and in line with our medium-term target.
EUR1.6 bn of our residual NPE balances represent restructured
exposures that are in fact performing and present zero arrears. The
remaining 'core' NPE balance of EUR7.2 bn carries a 54% provision
coverage and represents 38% of our loan balances.
We remain confident of continuing the positive progress in
reducing our NPE stock during the coming quarters. At the same
time, we continue to actively explore certain structured solutions
to further accelerate reduction and return the Bank to a more
normal position.
Deposits increased by EUR535 mn in the quarter and by EUR1.3 bn
in the year. The increase in our deposit base has ensured that we
are now in full compliance with our regulatory liquidity
requirements. However, the increase in our liquidity, coupled with
the continued balance sheet de-risking, adds negative short-term
pressure to the Bank's net interest margin. We expect the
profit-pressure created by this dynamic to be more than offset in
2018 by reduced provisioning, the positive contribution of new
lending and the repricing of deposit rates.
Our capital levels remain adequate and as at 31 December 2017
both the Bank's CET1 ratio (transitional) and the Total Capital
Ratio were in excess of regulatory requirements. Allowing for
transitional arrangements, the estimated IFRS 9 capital impact for
2018 is c.9 bps, remaining within regulatory limits.
Whilst we are pleased with the progress so far in the turnaround
at the Bank, we are in no doubt about the amount of work we still
have to do, both in respect of our legacy lending positions and
also in expanding our performing business. We are proud that we
have maintained and grown our leading lending position in the fast
growing Cyprus economy that expanded by 3.9% during 2017. New
lending in the year to 31 December 2017 was EUR2.2 bn, exceeding
new lending in 2016 by 53%, and we expect to further expand levels
of new lending during the year ahead.
Momentum in the business is good. We enter 2018 with a clear
understanding of how we will continue to execute to ensure on-going
progress against our strategic objectives and delivery against our
medium-term targets. Our expectations for 2018 are unchanged and,
at this stage, we maintain our guidance of a return to
profitability and earnings per share of 40 cents.
John Patrick Hourican
A. Preliminary Financial Results - Statutory Basis
Unaudited Consolidated Income Statement for the year ended 31
December 2017
2017 2016
------------------------------------------- ---------- ----------
EUR000 EUR000
------------------------------------------- ---------- ----------
Turnover 1,165,177 1,234,098
------------------------------------------- ========== ==========
Interest income 811,031 890,298
------------------------------------------- ---------- ----------
Interest expense (228,291) (204,116)
------------------------------------------- ---------- ----------
Net interest income 582,740 686,182
------------------------------------------- ---------- ----------
Fee and commission income 190,577 176,865
------------------------------------------- ---------- ----------
Fee and commission expense (10,179) (10,207)
------------------------------------------- ---------- ----------
Net foreign exchange gains 45,409 43,471
------------------------------------------- ---------- ----------
Net gains on financial instrument
transactions 2,964 63,373
------------------------------------------- ---------- ----------
Insurance income net of claims and
commissions 50,401 44,432
------------------------------------------- ---------- ----------
Net (losses)/ gains from revaluation
and disposal of investment properties (4,061) 4,974
------------------------------------------- ---------- ----------
Net gains on disposal of stock of
property 30,447 1,361
------------------------------------------- ---------- ----------
Other income 19,052 14,905
------------------------------------------- ---------- ----------
907,350 1,025,356
------------------------------------------- ---------- ----------
Staff costs (228,212) (287,172)
------------------------------------------- ---------- ----------
Special levy on deposits on credit
institutions in Cyprus (22,846) (19,968)
------------------------------------------- ---------- ----------
Other operating expenses (297,979) (222,987)
------------------------------------------- ---------- ----------
358,313 495,229
------------------------------------------- ---------- ----------
Gain on derecognition of loans and
advances to customers and changes
in expected cash flows 173,443 63,315
------------------------------------------- ---------- ----------
Provisions for impairment of loans
and advances to customers and other
customer credit losses (952,926) (433,609)
------------------------------------------- ========== ==========
Impairment of other financial instruments (6,459) (11,293)
------------------------------------------- ========== ==========
Impairment of non-financial instruments (58,972) (36,220)
------------------------------------------- ========== ==========
(Loss)/ profit before share of profit
from associates and joint ventures (486,601) 77,422
------------------------------------------- ---------- ----------
Share of profit from associates and
joint ventures 8,957 8,194
------------------------------------------- ---------- ----------
(Loss)/ profit before tax (477,644) 85,616
------------------------------------------- ---------- ----------
Income tax (76,681) (18,385)
------------------------------------------- ---------- ----------
(Loss)/ profit for the year (554,325) 67,231
------------------------------------------- ========== ==========
Attributable to:
------------------------------------------- ---------- ----------
Owners of the Company/ Bank (551,852) 63,656
------------------------------------------- ---------- ----------
Non-controlling interests (2,473) 3,575
------------------------------------------- ---------- ----------
(Loss)/ profit for the year (554,325) 67,231
------------------------------------------- ========== ==========
Basic and diluted (losses)/earnings
per share attributable to the owners
of the Company/ Bank (cent) (123.7) 14.3
------------------------------------------- ========== ==========
Unaudited Consolidated Balance Sheet as at 31 December 2017
2017 2016
--------------------------------------------- ----------- -----------
Assets EUR000 EUR000
--------------------------------------------- ----------- -----------
Cash and balances with central banks 3,393,934 1,506,396
--------------------------------------------- ----------- -----------
Loans and advances to banks 1,192,633 1,087,837
--------------------------------------------- ----------- -----------
Derivative financial assets 18,027 20,835
--------------------------------------------- ----------- -----------
Investments 739,293 373,879
--------------------------------------------- ----------- -----------
Investments pledged as collateral 290,129 299,765
--------------------------------------------- ----------- -----------
Loans and advances to customers 14,602,454 15,649,401
--------------------------------------------- ----------- -----------
Life insurance business assets attributable
to policyholders 518,678 499,533
--------------------------------------------- ----------- -----------
Prepayments, accrued income and other
assets 228,507 269,911
--------------------------------------------- ----------- -----------
Stock of property 1,641,422 1,427,272
--------------------------------------------- ----------- -----------
Investment properties 19,646 38,059
--------------------------------------------- ----------- -----------
Property and equipment 279,814 280,893
--------------------------------------------- ----------- -----------
Intangible assets 165,952 146,963
--------------------------------------------- ----------- -----------
Investments in associates and joint
ventures 118,113 109,339
--------------------------------------------- ----------- -----------
Deferred tax assets 383,498 450,441
--------------------------------------------- ----------- -----------
Non-current assets held for sale 6,500 11,411
--------------------------------------------- ----------- -----------
Total assets 23,598,600 22,171,935
--------------------------------------------- =========== ===========
Liabilities
--------------------------------------------- ----------- -----------
Deposits by banks 495,308 434,786
--------------------------------------------- ----------- -----------
Funding from central banks 930,000 850,014
--------------------------------------------- ----------- -----------
Repurchase agreements 257,322 257,367
--------------------------------------------- ----------- -----------
Derivative financial liabilities 50,892 48,625
--------------------------------------------- ----------- -----------
Customer deposits 17,849,919 16,509,741
--------------------------------------------- ----------- -----------
Insurance liabilities 605,448 583,997
--------------------------------------------- ----------- -----------
Accruals, deferred income and other
liabilities 444,602 335,925
--------------------------------------------- ----------- -----------
Subordinated loan stock 302,288 -
--------------------------------------------- ----------- -----------
Deferred tax liabilities 46,113 45,375
--------------------------------------------- ----------- -----------
Total liabilities 20,981,892 19,065,830
--------------------------------------------- ----------- -----------
Equity
--------------------------------------------- ----------- -----------
Share capital 44,620 892,294
--------------------------------------------- ----------- -----------
Share premium 2,794,358 552,618
--------------------------------------------- ----------- -----------
Capital reduction reserve - 1,952,486
--------------------------------------------- ----------- -----------
Revaluation and other reserves 273,708 218,678
--------------------------------------------- ----------- -----------
Accumulated losses (527,128) (544,930)
--------------------------------------------- ----------- -----------
Equity attributable to the owners
of the Company/ Bank 2,585,558 3,071,146
--------------------------------------------- ----------- -----------
Non-controlling interests 31,150 34,959
--------------------------------------------- ----------- -----------
Total equity 2,616,708 3,106,105
--------------------------------------------- ----------- -----------
Total liabilities and equity 23,598,600 22,171,935
--------------------------------------------- =========== ===========
B. Preliminary Financial Results - Underlying Basis
Unaudited Consolidated Income Statement
-------------------------------------------------------------------------------------------------------
(4q (FY)
vs 3q) yoy
EUR mn FY2017 FY2016 4Q2017 3Q2017 2Q2017 1Q2017 +% +%
-------------------------------- -------- ------ ------ ------ -------- ------ ------- --------
Net interest income 583 686 129 138 160 156 -7% -15%
Net fee and commission
income 180 167 47 45 45 43 5% 8%
Net foreign exchange
gains and net gains
on other financial
instruments 48 48 16 9 12 11 68% 0%
Insurance income net
of claims and commissions 50 44 11 14 15 10 -23% 13%
Net gains from revaluation
and disposal of investment
properties and on disposal
of stock of properties 27 6 5 12 1 9 -59% 317%
Other income 19 12 6 5 4 4 43% 64%
-------------------------------- -------- ------ ------ ------ -------- ------ ------- --------
Total income 907 963 214 223 237 233 -4% -6%
-------------------------------- -------- ------ ------ ------ -------- ------ ------- --------
Staff costs (228) (224) (60) (57) (57) (54) 5% 1%
Other operating expenses (171) (153) (43) (43) (44) (41) 0% 12%
Special levy and contribution
to Single Resolution
Fund (23) (20) (6) 1 (6) (12) - 14%
Total expenses (422) (397) (109) (99) (107) (107) 9% 6%
-------------------------------- -------- ------ ------ ------ -------- ------ ------- --------
Operating profit 485 566 105 124 130 126 -15% -14%
-------------------------------- -------- ------ ------ ------ -------- ------ ------- --------
Provision charge (779) (370) (50) (73) (592) (64) -31% 111%
Impairments of other
financial and non-financial
assets (65) (47) (27) (2) (4) (32) - 38%
Provisions for litigation
and regulatory matters (98) (18) (25) (38) (18) (17) -37% 447%
-------------------------------- -------- ------ ------ ------ -------- ------ ------- --------
Total provisions and
impairments (942) (435) (102) (113) (614) (113) -10% 116%
-------------------------------- -------- ------ ------ ------ -------- ------ ------- --------
Share of profit from
associates and joint
ventures 9 8 4 1 2 2 189% 9%
-------------------------------- -------- ------ ------ ------ -------- ------ ------- --------
(Loss)/ profit before
tax and restructuring
costs (448) 139 7 12 (482) 15 -40% -423%
-------------------------------- -------- ------ ------ ------ -------- ------ ------- --------
Tax (77) (16) (1) (4) (66) (6) -70% 352%
Loss/ (profit) attributable
to non-controlling
interests 2 (4) 3 0 (1) (0) - -169%
-------------------------------- -------- ------ ------ ------ -------- ------ ------- --------
(Loss)/ profit after
tax and before restructuring
costs (523) 119 9 8 (549) 9 17% -541%
-------------------------------- -------- ------ ------ ------ -------- ------ ------- --------
Advisory, VEP and other
restructuring costs (29) (114) (8) (7) (7) (7) 24% -74%
Net gain on disposal
of non-core assets - 59 - - - - - -100%
-------------------------------- -------- ------ ------ ------ -------- ------ ------- --------
(Loss)/ profit after
tax (552) 64 1 1 (556) 2 -26% -967%
-------------------------------- -------- ------ ------ ------ -------- ------ ------- --------
(4q (FY)
vs 3q) yoy
Key Performance Ratios FY2017 FY2016 4Q2017 3Q2017 2Q2017 1Q2017 + +
-------------------------------- -------- ------ ------ ------ -------- ------ ------- --------
Net Interest Margin -29 -45
(annualised) 3.02% 3.47% 2.57% 2.86% 3.38% 3.33% bps bps
-------------------------------- -------- ------ ------ ------ -------- ------ ------- --------
+6
Cost to income ratio 47% 41% 51% 44% 45% 46% +7 p.p. p.p.
-------------------------------- -------- ------ ------ ------ -------- ------ ------- --------
Cost to income ratio
excluding special levy
and contribution to +5
Single Resolution Fund 44% 39% 48% 45% 43% 41% +3 p.p. p.p.
-------------------------------- -------- ------ ------ ------ -------- ------ ------- --------
Operating profit return -0.4 -0.4
on average assets (annualised) 2.1% 2.5% 1.8% 2.2% 2.3% 2.3% p.p. p.p.
-------------------------------- -------- ------ ------ ------ -------- ------ ------- --------
Basic (losses)/earnings
per share attributable
to the owners of the
Company/Bank (cent) (123.72) 14.27 0.20 0.27 (124.63) 0.48 (0.07) (137.99)
-------------------------------- -------- ------ ------ ------ -------- ------ ------- --------
* p.p. = percentage points, bps = basis points, 100 basis
points (bps) = 1 percentage point
Unaudited Consolidated Balance Sheet
---------------------------------------------------------------------
EUR mn 31.12.2017 31.12.2016 +%
------------------------------------ ---------- ---------- -------
Cash and balances with central
banks 3,394 1,506 125%
Loans and advances to banks 1,193 1,088 10%
Debt securities, treasury bills
and equity investments 1,029 674 53%
Net loans and advances to customers 14,602 15,649 -7%
Stock of property 1,641 1,427 15%
Other assets 1,740 1,828 -5%
Total assets 23,599 22,172 6%
------------------------------------ ---------- ---------- -------
Deposits by banks 495 435 14%
Funding from central banks 930 850 9%
Repurchase agreements 257 257 0%
Customer deposits 17,850 16,510 8%
Subordinated loan stock 302 - -
Other liabilities 1,148 1,014 13%
------------------------------------ ---------- ---------- -------
Total liabilities 20,982 19,066 10%
------------------------------------ ---------- ---------- -------
Shareholders' equity 2,586 3,071 -16%
------------------------------------ ---------- ---------- -------
Non-controlling interests 31 35 -11%
------------------------------------ ---------- ---------- -------
Total equity 2,617 3,106 -16%
------------------------------------ ---------- ---------- -------
Total liabilities and equity 23,599 22,172 6%
------------------------------------ ---------- ---------- -------
Key Balance Sheet figures and 31.12.2017 31.12.2016 +
ratios
------------------------------------ ---------- ---------- -------
Gross loans (EUR mn) 18,755 20,130 -7%
Accumulated provisions (EUR mn) 4,204 4,519 -7%
Customer deposits (EUR mn) 17,850 16,510 8%
-13
Loan to deposit ratio (net) 82% 95% p.p.
90+ DPD ratio 37% 41% -4 p.p.
90+ DPD provisioning coverage
ratio 61% 54% +7 p.p.
NPE ratio 47% 55% -8 p.p.
NPE provisioning coverage ratio 48% 41% +7 p.p.
Quarterly average interest earning
assets (EUR mn) 19,826 19,060 4 %
-2.8
Leverage ratio 10.4% 13.2% p.p.
------------------------------------ ---------- ---------- -------
Capital ratios and risk weighted 31.12.2017 31.12.2016 +
assets
------------------------------------ ---------- ---------- -------
Common Equity Tier 1 capital ratio -1.8
(CET1) (transitional) 12.7% 14.5% p.p.
-1.7
CET1 (fully loaded) 12.2% 13.9% p.p.
Total capital ratio 14.2% 14.6% -4 bps
Risk weighted assets (EUR mn) 17,260 18,865 -9%
------------------------------------ ---------- ---------- -------
* p.p. = percentage points, bps
= basis points, 100 basis points
(bps) = 1 percentage point
B.1. Unaudited reconciliation of Income Statement for the year
ended 31 December 2017 between statutory and underlying bases
EUR mn Underlying Reclassification Statutory
Basis Basis
=========================== =========== ================= ==========
Net interest income 583 - 583
=========================== =========== ================= ==========
Net fee and commission
income 180 - 180
=========================== =========== ================= ==========
Net foreign exchange
gains and net
gains on other
financial instruments 48 - 48
=========================== =========== ================= ==========
Insurance income
net of claims
and commissions 50 - 50
=========================== =========== ================= ==========
Net gains from
revaluation and
disposal of investment
properties and
on disposal of
stock of properties 27 - 27
=========================== =========== ================= ==========
Other income 19 - 19
=========================== ----------- ----------------- ----------
Total income 907 - 907
=========================== =========== ================= ==========
Total expenses (422) (127) (549)
=========================== ----------- ----------------- ----------
Operating profit 485 (127) 358
=========================== =========== ================= ==========
Provisions (779) - (779)
=========================== =========== ================= ==========
Impairments of
other financial
and non-financial
instruments (65) - (65)
=========================== =========== ================= ==========
Provisions for
litigation and
regulatory matters (98) 98 -
=========================== =========== ================= ==========
Share of profit
from associates
and joint ventures 9 - 9
=========================== ----------- ----------------- ----------
Loss before tax
and restructuring
costs (448) (29) (477)
=========================== =========== ================= ==========
Tax (77) - (77)
=========================== =========== ================= ==========
Loss attributable
to non-controlling
interests 2 - 2
=========================== ----------- ----------------- ----------
Loss after tax
and before restructuring
costs (523) (29) (552)
=========================== =========== ================= ==========
Advisory and other
restructuring
costs (29) 29 -
=========================== ----------- ----------------- ----------
Loss after tax (552) - (552)
=========================== =========== ================= ==========
The reclassification difference between the underlying and
statutory bases relates to EUR127 mn expenses (EUR98 mn relate to
Provisions for litigation and regulatory matters and EUR29 mn to
Advisory and other restructuring costs), which for the purpose of
management reporting are monitored and reported below the operating
profit.
B.2. Balance Sheet Analysis
B.2.1 Capital Base
Shareholders' equity totalled EUR2,586 mn at 31 December 2017,
compared to EUR2,562 mn at 30 September 2017 and to EUR3,071 mn at
31 December 2016. The Common Equity Tier 1 capital (CET1) ratio
(transitional basis) improved to 12.7% at 31 December 2017,
compared to 12.4% at 30 September 2017 and 14.5% at 31 December
2016. During FY2017 the CET1 ratio was negatively affected by the
additional provision charge in 2Q2017 and the deferred tax asset
phasing-in, despite the reduction in risk- weighted assets (RWA).
Adjusting for Deferred Tax Assets, the CET1 ratio on a fully-loaded
basis totalled 12.2% at 31 December 2017, compared to 11.9% at 30
September 2017 and 13.9% at 31 December 2016. As at 31 December
2017, the Total Capital ratio stood at 14.2%, compared to 13.8% at
30 September 2017, positively affected mainly by the issuance of
GBP 30 mn Tier 2 Loan by the UK subsidiary.
The Group's minimum phased-in CET1 capital ratio requirement
stands at 9.50%, comprising of 4.50% Pillar I requirement, a 3.75%
Pillar II requirement and the capital conservation buffer (CCB) of
1.25% applicable for 2017. Following the Supervisory Review and
Evaluation Process (SREP) performed by the ECB in 2017, and based
on the confirmation received in December 2017, the Pillar II
requirement applicable from 1 January 2018 is reduced to 3.00% from
3.75%. As a result, the Group's minimum phased-in CET1 capital
ratio is reduced to 9.375% from 9.50%, comprising of a 4.50% Pillar
I requirement, a 3.00% Pillar II requirement and the CCB of 1.875%
applicable as from 1 January 2018. The ECB has also provided
revised lower non-public guidance for an additional Pillar II CET1
buffer. The Group CET1 ratio remains comfortably above this
combined Pillar II requirement and guidance.
The overall Total Capital Requirement currently stands at
13.00%, comprising of a Pillar I requirement of 8.00% (of which up
to 1.50% can be in the form of Additional Tier 1 capital and up to
2.00% in the form of Tier 2 capital), a Pillar II requirement of
3.75% (in the form of CET1), and the CCB of 1.25% applicable for
2017. Following the final 2017 SREP decision, the overall Total
Capital Requirement is reduced to 12.875% from 13.00%, comprising
of 8.00% Pillar I requirement, a 3.00% Pillar II requirement and
the CCB of 1.875% applicable as from 1 January 2018.
The Group continues to explore opportunities, subject to market
conditions, to raise up to 1.5% of Additional Tier 1 (AT1) in the
near term to further strengthen the Group's capital base. In
preparation for a potential issuance of AT1 capital instruments and
following the approval of the Cypriot courts on 29 December 2017,
the Bank proceeded with the full reduction of its capital reduction
reserve of EUR1.3 bn, in order to eliminate the Bank's accumulated
losses of EUR0.6 bn, thus creating retained earnings of EUR0.7 bn.
The reduction of capital did not have any impact on regulatory
capital or the total equity position of the Bank or the Group.
The retained earnings will provide the basis for the calculation
of distributable items under the Capital Requirements Regulation
(EU) No. 575/2013 ('CRR'). The CRR provides that coupons on AT1
capital instruments may only be paid out of distributable items.
Distributable items for the purposes of the CRR are determined, in
part, by reference to retained earnings. At 31 December 2017, the
Bank had EUR0.7 bn in distributable items. The Bank is currently
under a dividend distribution prohibition which will continue in
2018 following the final 2017 SREP decision received in December
2017. However, based on the decision, such prohibition will not
apply to the payment of coupons on any AT1 capital instruments
issued by the Bank. Both the retained earnings and distributable
items of the Bank will partly decrease as a result of the IFRS 9
implementation on 1 January 2018.
IFRS 9
The Group IFRS 9 implementation has been largely completed by 1
January 2018. The new accounting standard requires the impact on
the implementation date, 1 January 2018, to be recognised through
equity rather than the income statement. As a result, the impact on
transition, 1 January 2018, will affect the equity of the Group and
not the income statement.
The Group's IFRS 9 preliminary impact on transition, which is
subject to change due to final parameter calibrations, is assessed
to a decrease of shareholders' equity of c.EUR300 mn and is
primarily driven by credit impairment provisions. This estimated
reduction in shareholders' equity equates to a decrease in the
tangible net asset value at 31 December 2017 of EUR0.67 per
share.
The Group will implement the transitional arrangements for
regulatory capital purposes which result in only 5% of the
estimated IFRS 9 impact affecting the capital ratios during 2018.
Allowing for IFRS 9 transitional arrangements the impact is a
decrease of c.9 bps on Group capital ratios.
On a transitional basis and on a fully phased-in basis after the
period of transition is complete, the impact of IFRS 9 is expected
to be manageable and within the Group's capital plans.
Default Definition
According to the EBA guidelines that govern the CRR default
definition, issued in January 2017, the default definition will
gradually evolve to almost align with the NPE definition by 1
January 2021. The Group, in line with regulatory discussions,
intends to early adopt changes that will align the EBA CRR default
definition with the NPE definition as from 1 January 2018. This
will results in an increase in RWAs, equivalent to a decrease of
c.40 bps on CET1 ratio and a decrease of c.50 bps on total capital
ratio based on 31 December 2017 figures.
B.2.2 Funding and Liquidity
Funding
Funding from Central Banks
At 31 December 2017, the Bank's funding from central banks
totalled EUR930 mn, which relates wholly to ECB funding, compared
to ECB funding at 30 September 2017 of EUR830 mn and funding from
central banks at 31 December 2016 of EUR850 mn, which comprised
Emergency Liquidity Assistance (ELA) of EUR200 mn and ECB funding
of EUR650 mn. The ECB funding of EUR930 mn at the year-end
comprises EUR830 mn of funding through Targeted Longer-Term
Refinancing Operations (TLTRO II) and EUR100 mn of funding through
Main Refinancing Operations (MRO).
The Bank fully repaid ELA in January 2017.
Deposits
Group customer deposits totalled EUR17,850 mn at 31 December
2017, compared to EUR17,315 mn at 30 September 2017 and EUR16,510
mn at 31 December 2016. Group customer deposits increased by EUR535
mn or 3% during the quarter, with customer deposits in Cyprus
increasing by EUR393 mn or 3%. Cyprus deposits stood at EUR15,983
mn at 31 December 2017, accounting for 90% of Group customer
deposits. The Bank's deposit market share in Cyprus reached 32.8%
at 31 December 2017. Customer deposits accounted for 76% of total
assets at 31 December 2017. The Loan to Deposit ratio (L/D) stood
at 82% at 31 December 2017, down from 85% at 30 September 2017,
compared to a high of 151% at 31 March 2014. The 3 p.p. qoq
reduction in L/D ratio mainly relates to the increase in deposits
during the quarter.
Subordinated Loan Stock
In December 2017, the Bank's subsidiary in the UK issued a GBP30
mn unsecured and subordinated Tier 2 Loan.
In January 2017 the Bank accessed the debt capital markets and
issued EUR250 mn unsecured and subordinated Tier 2 Capital
Notes.
Liquidity
At 31 December 2017 the Group Liquidity Coverage Ratio (LCR)
stood at 190% (compared to 141% at 30 September 2017, and 49% at 31
December 2016) and was in compliance with the minimum regulatory
requirement of 80% (which increased to 100% on 1 January 2018).
The Net Stable Funding Ratio (NSFR ratio) was not introduced on
1 January 2018, as opposed to what was expected. The minimum
requirement of NSFR will be 100%. At 31 December 2017 the Group's
NSFR, on the basis of Basel standards, stood at 111% (compared to
107% at 30 September 2017 and 95% at 31 December 2016).
At 31 December 2017 the Bank was not in compliance with all the
local regulatory liquidity requirements set by the Central Bank of
Cyprus (CBC) with respect to its operations in Cyprus. On 1 January
2018, the local regulatory liquidity requirements were abolished,
in accordance with the Capital Requirements Regulation (CRR). In
December 2017, the CBC introduced a macroprudential measure in the
form of a liquidity add-on that was imposed on top of the LCR. The
objective of the measure is to ensure that there will be a gradual
release of the excess liquidity arising from the lower liquidity
requirements under the LCR compared to the ones under the local
regulatory liquidity requirements previously in place. The add-on
applies stricter outflow and inflow rates on some of the parameters
used in the calculation of the LCR than the ones defined in the
Commission Delegated Regulation (EU) 2015/61 as well as additional
liquidity requirements in the form of outflow rates on other items
that are not subject to any outflow rates as per the Regulation.
The measure will be implemented in two stages. The first stage
requires stricter outflow and inflow rates which are applicable
from 1 January 2018 until 30 June 2018. The second stage requires
more relaxed outflow and inflow rates compared to the initial ones,
and are applicable from 1 July 2018 until 31
December 2018. More specifically, there will be a reduction of
50% of the LCR add-on rates on 1 July 2018. The additional
liquidity requirement is expected to be implemented up to 31
December 2018. The CBC may propose to modify or extend the period
of application of this macroprudential measure depending on the
results of the follow-up of the banks' actions on how the excess
liquidity is utilised. The Bank is currently in compliance with LCR
including the LCR add-on.
B.2.3 Loans
Group gross loans totalled EUR18,755 mn at 31 December 2017,
compared to EUR19,253 mn at 30 September 2017 and EUR20,130 mn at
31 December 2016. Gross loans in Cyprus totalled EUR16,814 mn at 31
December 2017 and accounted for 90% of Group gross loans. The Bank
is the single largest credit provider in Cyprus with a market share
of 39.2% at 31 December 2017. Gross loans in the UK amounted to
EUR1,621 mn at 31 December 2017 and accounted for 9% of Group total
gross loans. New loan originations for the Group reached EUR2,231
mn for the FY2017 (of which EUR1,653 mn were granted in Cyprus and
EUR578 mn by the UK subsidiary), exceeding new lending in FY2016 by
53%.
At 31 December 2017, Group net loans and advances to customers
totalled EUR14,602 mn (30 September 2017:
EUR14,833 mn; 31 December 2016: EUR15,649 mn). At 31 December
2017, there were no net loans and advances to customers which were
classified as held for sale in line with IFRS 5, compared to net
loans and advances to customers with carrying value of EUR374 mn
which were classified as held for sale in line with IFRS 5 at 30
September 2017.
B.2.4 Loan portfolio quality
Tackling the Group's loan portfolio quality remains the top
priority for management. The Group continues to make steady
progress across all asset quality metrics and the loan
restructuring activity continues. The Group has been successful in
engineering restructuring solutions across the spectrum of its loan
portfolio.
Non-performing exposures (NPEs) as defined by the European
Banking Authority (EBA) were reduced by EUR2.2 bn or 20% during
FY2017 to EUR8,804 mn at 31 December 2017, accounting for 47% of
gross loans, compared to 48% at 30 September 2017 and 55% at 31
December 2016.
The provisioning coverage ratio of NPEs stood at 48% at 31
December 2017, compared to 49% at 30 September 2017 and 41% at 31
December 2016. When taking into account tangible collateral at fair
value, NPEs are fully covered. The 31 December 2017 NPE
provisioning coverage ratio increases from 48% to 51% upon IFRS 9
first time adoption.
31.12.2017 30.09.2017
% of gross % of gross
EUR mn loans EUR mn loans
============================== ====== ========== ====== ==========
Non-performing exposures
(NPEs) as per EBA definition 8,804 46.9% 9,164 47.6%
Of which:
- NPEs with forbearance
measures, no arrears 1,619 8.6% 1,406 7.3%
============================== ====== ========== ====== ==========
The Group has recorded significant organic NPE reductions for
eleven consecutive quarters and expects the organic reduction of
NPEs to continue during the coming quarters. In parallel the Group
continues to be actively exploring alternative avenues to
accelerate this reduction. As part of this ongoing assessment to
optimise the accelerated reduction of NPEs, the gross value of
c.EUR450 mn of the loan portfolio classified as held for sale as at
30 September 2017, is no longer classified as such as per IFRS 5.
These loans are now being considered by the Group in other
structured solutions to accelerate de-risking, potentially in the
near term, in one or more transactions.
Loans in arrears for more than 90 days (90+ DPD) were reduced by
EUR1.4 bn or 17% in FY2017. The decrease was the result of
restructuring activity, debt for asset swaps and write offs. 90+
DPD stood at EUR6,905 mn at 31 December 2017, accounting for 37% of
gross loans (90+ DPD ratio), at the same levels as at 30 September
2017 and compared to 41% at 31 December 2016. The provisioning
coverage ratio of 90+ DPD stood at 61% at 31 December 2017,
compared to 62% at 30 September 2017 and 54% at 31 December 2016.
When taking into account tangible collateral at fair value, 90+ DPD
loans are fully covered.
31.12.2017 30.09.2017
EUR mn % of gross EUR mn % of gross
Loans loans
=============================== ====== ========== ====== ==========
90+ DPD 6,905 36.8% 7,182 37.3%
Comprising:
- Loans with arrears for
over 90 days but not impaired 1,385 7.4% 1,397 7.3%
- Impaired loans 5,520 29.4% 5,785 30.0%
Of which:
- impaired with no arrears 402 2.1% 342 1.8%
- impaired with arrears
less than 90 days 162 0.9% 43 0.2%
=============================== ====== ========== ====== ==========
B.2.5. Real Estate Management Unit
The Real Estate Management Unit (REMU) on-boarded EUR164 mn of
assets, via the execution of debt for asset swaps, in 4Q2017 (up by
30% qoq) and EUR520 mn of assets in FY2017. The focus for REMU is
increasingly shifting from on-boarding of assets resulting from
debt for asset swaps towards the disposal of these assets. The
Group completed disposals of EUR54 mn in 4Q2017, compared to EUR64
mn in 3Q2017 and disposals of EUR258 mn in FY2017. In addition, in
2Q2017 the Group disposed of a property with carrying value EUR10
mn, previously classified as investment property. In January 2018,
the Group completed additional disposals of EUR8 mn. During the
year 2017 and January 2018, the Group executed sale-purchase
agreements (SPAs) with contract value of EUR335 mn and in addition
signed SPAs for disposals of assets with contract value of EUR58
mn.
As at 31 December 2017, assets held by REMU had a carrying value
of EUR1.6 bn.
Assets held by REMU FY2017 4Q2017 FY2016
(Group) (EUR mn)
---------------------- ------- ------- -------
Opening balance 1,427 1,548 542
======== ======= =======
On-boarded
assets 520 164 1,086
======== ======= =======
Sales (258) (54) (166)
======== ======= =======
Closing balance 1,641 1,641 1,427
======== ======= =======
Analysis by type and Cyprus Greece Romania Total
country
31 December 2017 (EUR
mn)
------------------------------- ------- ------- -------- ------
Residential properties 146 29 0 175
Offices and other
commercial properties 288 39 9 336
Manufacturing and
industrial properties 113 34 0 147
Hotels 78 0 - 78
Land (fields and plots) 837 6 5 848
Properties under construction 57 - - 57
------------------------------- ------- ------- -------- ------
Total 1,519 108 14 1,641
------------------------------- ------- ------- -------- ------
Cyprus Greece Romania Total
31 December 2016 (EUR
mn)
------------------------------- ------- ------- -------- ------
Residential properties 90 37 9 136
Offices and other commercial
properties 256 56 12 324
Manufacturing and industrial
properties 82 53 1 136
Hotels 74 1 - 75
Land (fields and plots) 739 6 10 755
Properties under construction 1 - - 1
------------------------------- ------- ------- -------- ------
Total 1,242 153 32 1,427
------------------------------- ------- ------- -------- ------
B.2.6 Non-core overseas exposures
The remaining non-core overseas net exposures (including both
on-balance sheet and off-balance sheet exposures) at 31 December
2017 are as follows:
EUR mn 31 December 2017 31 December 2016
--------- ----------------- -----------------
Greece 185 283
Romania 79 149
Serbia 9 42
Russia 31 44
--------- ----------------- -----------------
The Group continues its efforts for further deleveraging and
disposal of non-essential assets and operations in Greece, Romania
and Russia.
In accordance with the Group's strategy to exit from overseas
non-core operations, the operations of the branch in Romania are
expected to be terminated, subject to the completion of
deregistration formalities with respective authorities. The
remaining assets and liabilities of the branch in Romania with
third parties have been transferred to other entities of the
Group.
In addition to the above, at 31 December 2017 there were
overseas exposures of EUR168 mn in Greece (compared to exposures of
EUR169 mn in Greece as at 30 September 2017), not identified as
non-core exposures, since they are considered by management as
exposures arising in the normal course of business.
B.3. Income Statement Analysis
B.3.1 Total income
(FY)
EUR mn FY2017 FY2016 4Q2017 3Q2017 2Q2017 1Q2017 (4q vs 3q) +% yoy +%
---------------------------- -------- ------ ------ ------ ------ ------ ------------- -------
Net interest income 583 686 129 138 160 156 -7% -15%
---------------------------- -------- ------ ------ ------ ------ ------ ------------- -------
Net fee and commission
income 180 167 47 45 45 43 5% 8%
Net foreign exchange
gains and net gains
on other financial
instruments 48 48 16 9 12 11 68% 0%
Insurance income net
of claims and commissions 50 44 11 14 15 10 -23% 13%
Net gains from revaluation
and disposal of investment
properties and on disposal
of stock of properties 27 6 5 12 1 9 -59% 317%
Other income 19 12 6 5 4 4 43% 64%
---------------------------- -------- ------ ------ ------ ------ ------ ------------- -------
Non-interest income 324 277 85 85 77 77 1% 17%
---------------------------- -------- ------ ------ ------ ------ ------ ------------- -------
Total income 907 963 214 223 237 233 -4% -6%
---------------------------- -------- ------ ------ ------ ------ ------ ------------- -------
Net Interest Margin
(annualised) 3.02% 3.47% 2.57% 2.86% 3.38% 3.33% -29 bps -45bps
---------------------------- -------- ------ ------ ------ ------ ------ ------------- -------
Average interest earning
assets (EUR mn) 19,301 19,752 19,826 19,157 18,996 19,027 3% -2%
---------------------------- -------- ------ ------ ------ ------ ------ ------------- -------
* p.p. = percentage points, bps = basis points, 100 basis points
(bps) = 1 percentage point
Net interest income (NII) and net interest margin (NIM) for
FY2017 amounted to EUR583 mn and 3.02% respectively, down by 15%
compared to EUR686 mn a year earlier. The NII and NIM for 4Q2017
amounted to EUR129 mn and 2.57% respectively, compared to EUR138 mn
and 2.86% in 3Q2017. The decline reflects the cost of liquidity
compliance, lower volume on loans and pressure on lending rates,
primarily from the legacy portfolio.
Average interest earning assets for FY2017 amounted to EUR19,301
mn, down by 2% yoy, largely due to debt for asset swaps and the
elevated provision charges in 2Q2017. Average interest earning
assets for 4Q2017 amounted to EUR19,826 mn, up by 3%, compared to
EUR19,157 mn the previous quarter, due to increased liquid
assets.
Non-interest income for FY2017 amounted to EUR324 mn, mainly
comprising of net fee and commission income of EUR180 mn, net
insurance income of EUR50 mn and net foreign exchange income and
net gains on financial instruments of EUR48 mn. Non-interest income
for FY2017 increased by 17% yoy, largely driven by the increase in
gains from REMU sales and the new and increased commission charges
introduced in 4Q2016. Non-interest income for 4Q2017 was EUR85 mn,
up by 1% qoq, comprising primarily net fee and commission income of
EUR47 mn and net insurance income of EUR11 mn. The remaining
component of non-interest income for 4Q2017 was a profit of EUR27
mn (compared to EUR26 mn for the previous quarter), which includes
a net gain of EUR6 mn on the disposal of assets by REMU (compared
to EUR12 mn for the previous quarter).
Total income for FY2017 amounted to EUR907 mn, compared to
EUR963 mn for FY2016 (6% decrease yoy), with the reduction
reflecting the yoy reduction in NII. Total income for 4Q2017
amounted to EUR214 mn, compared to EUR223 mn for 3Q2017.
B.3.2 Total expenses
(FY)
EUR mn FY2017 FY2016 4Q2017 3Q2017 2Q2017 1Q2017 (4q vs 3q) + Yoy +
------------------------------ -------- ------ ------ ------ ------ ------ ------------ -------
Staff costs (228) (224) (60) (57) (57) (54) 5% 1%
Other operating expenses (171) (153) (43) (43) (44) (41) 0% 12%
------------------------------ -------- ------ ------ ------ ------ ------ ------------ -------
Total operating expenses (399) (377) (103) (100) (101) (95) 3% 6%
------------------------------ -------- ------ ------ ------ ------ ------ ------------ -------
Special levy and contribution
to Single Resolution
Fund (SRF) (23) (20) (6) 1 (6) (12) - 14%
Total expenses (422) (397) (109) (99) (107) (107) 9% 6%
------------------------------ -------- ------ ------ ------ ------ ------ ------------ -------
Cost to income ratio 47% 41% 51% 44% 45% 46% +7 p.p. +6 p.p.
------------------------------ -------- ------ ------ ------ ------ ------ ------------ -------
Cost to income ratio
excluding special levy
and contribution to
Single Resolution Fund 44% 39% 48% 45% 43% 41% +3 p.p. +5 p.p.
------------------------------ -------- ------ ------ ------ ------ ------ ------------ -------
Total expenses for FY2017 were EUR399 mn, 54% of which related
to staff costs (EUR228 mn), 41% to other operating expenses (EUR171
mn) and 5% to special levy and contribution to SRF. Total expenses
for 4Q2017 were EUR109 mn, up by 9% qoq, mainly due to the positive
impact from the reversal of the SRF contribution during 3Q2017.
Staff costs and other operating expenses amounted to EUR60 mn and
EUR43 mn respectively, compared to EUR57 mn and EUR43 mn
respectively during the previous quarter. The 5% qoq increase in
staff costs is mainly due to the effect of the current collective
agreement with the staff union and year-end actuarial
valuations.
During the quarter, the special levy and SRF contribution
amounted to EUR6 mn, comprising the special levy. The 2017 annual
SRF contribution of c.EUR6 mn was reversed during 3Q2017, following
the amendment of the Law on the Imposition of a Special Tax Credit
Law to allow the offsetting of the SRF contribution with the
special levy charge.
The cost to income ratio for FY2017 was 47%, compared to 41% for
FY2016, principally reflecting lower interest income. The cost to
income ratio for 4Q2017 was 51%, compared to 44% in 3Q2017.
B.3.3 (Loss)/profit before tax and restructuring costs
(FY)
EUR mn FY2017 FY2016 4Q2017 3Q2017 2Q2017 1Q2017 (4q vs 3q) +% yoy +%
----------------------------- -------- ------ ------ ------ ------ ------ ------------- -------
Operating profit 485 566 105 124 130 126 -15% -14%
----------------------------- -------- ------ ------ ------ ------ ------ ------------- -------
Provision charge (779) (370) (50) (73) (592) (64) -31% 111%
Impairments of other
financial and non-financial
assets (65) (47) (27) (2) (4) (32) - 38%
Provisions for litigation
and regulatory matters (98) (18) (25) (38) (18) (17) -37% 447%
----------------------------- -------- ------ ------ ------ ------ ------ ------------- -------
Total provisions and
impairments (942) (435) (102) (113) (614) (113) -10% 116%
----------------------------- -------- ------ ------ ------ ------ ------ ------------- -------
Share of profit from
associates and joint
ventures 9 8 4 1 2 2 189% 9%
----------------------------- -------- ------ ------ ------ ------ ------ ------------- -------
(Loss)/profit before
tax and restructuring
costs (448) 139 7 12 (482) 15 -40% -423%
----------------------------- -------- ------ ------ ------ ------ ------ ------------- -------
Operating profit for FY2017 was EUR485 mn, compared to EUR566 mn
for FY2016 (down by 14% yoy). The decrease mainly reflects the
lower net interest income. Operating profit for 4Q2017 was EUR105
mn, compared to EUR124 mn the previous quarter.
Provisions for FY2017 totalled EUR779 mn, up by 111% yoy,
following the additional provisions of c.EUR500 mn in 2Q2017. The
elevated provisioning levels in 2Q2017 reflect changes in the
Bank's provisioning assumptions as a result of the Group's
reconsideration of its strategy to more actively explore other
innovative strategic solutions to further accelerate balance sheet
de-risking. Provisions for 4Q2017 amounted to EUR50 mn, down by 31%
qoq.
The provisioning charge for FY2017 accounted for 4.0% of gross
loans, compared to an annualised provisioning charge of 4.1% for
9M2017. An amount of c.EUR500 mn reflecting the one-off effect of
the change in the provisioning assumptions is included in the cost
of risk, but not annualised.
At 31 December 2017, accumulated provisions, including fair
value adjustment on initial recognition and provisions for
off-balance sheet exposures, totalled EUR4,204 mn (compared to
EUR4,470 mn at 30 September 2017 and EUR4,519 mn at 31 December
2016) and accounted for 22.4% of gross loans (compared to 23.2% at
30 September 2017 and to 22.4% at 31 December 2016). The decrease
of accumulated provisions in 4Q2017 of EUR266 mn is mainly affected
by write offs during the quarter.
Impairments of other financial and non-financial assets for
FY2017 totalled EUR65 mn, compared to EUR47 mn for FY2016 (up by
38% yoy), primarily affected by impairment charges relating to
legacy exposures and legacy stock of properties in Cyprus and
Greece. The 4Q2017 charge of EUR27 mn (compared to a charge of EUR2
mn in 3Q2017) includes an impairment loss on legacy properties in
Cyprus and Greece. During 3Q2017, the charge was partly offset by a
reversal of EUR15 mn of impairment charges relating to legacy
exposures following recent developments.
Provisions for litigation and regulatory matters for FY2017
amounted to EUR98 mn, primarily relating to redress provisions for
the UK operations and a fine imposed by the Cyprus Commission for
the Protection of Competition. Provisions for litigation and
regulatory matters for 4Q2017 amounted to EUR25 mn. The charge for
3Q2017 amounted to EUR38 mn and was primarily driven by redress
provisions for the UK operations, following further analysis of the
customer remediation implications from a pilot exercise which
completed in 3Q2017.
B.3.4 (Loss)/profit after tax
(FY)
(4q vs yoy
EUR mn FY2017 FY2016 4Q2017 3Q2017 2Q2017 1Q2017 3q) +% +%
------------------------------ -------- ------ ------ ------ ------ ------ ------- -----
(Loss)/profit before
tax and restructuring
costs (448) 139 7 12 (482) 15 -40% -423%
------------------------------ -------- ------ ------ ------ ------ ------ ------- -----
Tax (77) (16) (1) (4) (66) (6) -70% 352%
Loss/(profit) attributable
to non-controlling
interests 2 (4) 3 0 (1) (0) - -169%
------------------------------ -------- ------ ------ ------ ------ ------ ------- -----
(Loss)/profit after
tax and before restructuring
costs (523) 119 9 8 (549) 9 17% -541%
------------------------------ -------- ------ ------ ------ ------ ------ ------- -----
Advisory, VEP and other
restructuring costs (29) (114) (8) (7) (7) (7) 24% -74%
Net gain on disposal
of non-core assets - 59 - - - - - -100%
------------------------------ -------- ------ ------ ------ ------ ------ ------- -----
(Loss)/profit after
tax (552) 64 1 1 (556) 2 -26% -967%
------------------------------ -------- ------ ------ ------ ------ ------ ------- -----
The tax charge for FY2017 totalled EUR77 mn compared to EUR16 mn
in FY2016. The tax charge for 4Q2017 totalled EUR1 mn compared to
EUR4 mn in 3Q2017 and EUR66 mn in 2Q2017. The elevated tax charge
in 2Q2017 reflects the reduction of Deferred Tax Assets (DTA) of
EUR62 mn, following the increase in provisions for impairment of
loans and advances to customers and evaluation of the
recoverability assessment of the DTA balance.
Loss after tax and before restructuring costs for FY2017
totalled EUR523 mn, compared to a profit after tax and before
restructuring costs of EUR119 mn for FY2016. Profit after tax and
before restructuring costs for 4Q2017 was EUR9 mn, compared to EUR8
mn for 3Q2017 and compared to a loss after tax and before
restructuring costs of EUR549 mn for 2Q2017.
Advisory, VEP and other restructuring costs for FY2017 totalled
EUR29 mn, compared to EUR114 mn for FY2016 (down by 74% yoy). The
elevated levels in the previous year relate mainly to the Voluntary
Exit Plan (VEP). Advisory and other restructuring costs for 4Q2017
were EUR8 mn, compared to EUR7mn for 3Q2017.
Net gain on disposal of non-core assets for FY2016 of EUR59 mn
related mainly to the gain on disposal of the investment in Visa
Europe.
Loss after tax attributable to the owners of the Company for
FY2017 was EUR552 mn, compared to a profit after tax of EUR64 mn
for FY2016. Profit after tax attributable to the owners of the
Company for 4Q2017 was EUR1 mn, at the same level as the previous
quarter, compared to a loss after tax of EUR556 mn for 2Q2017.
C. Operating Environment
Economic recovery in Cyprus accelerated in 2017 and the medium
term outlook is favourably driven by an improving labour market,
broadening investments and increasing resilience. Cyprus continues
to face challenges primarily in relation to public and private
indebtedness and non-performing exposures, but while more remains
to be done, considerable progress has been achieved.
Real GDP in Cyprus increased by 3.9% in 2017 according to the
Cyprus Statistical Service, compared with a 3% increase the
previous year. In the labour market, according to Eurostat, the
unemployment rate dropped to 10.5% in the third quarter of the
year, when seasonally adjusted, whilst average consumer inflation
in the year was marginally positive at 0.5% after four years of
deflation (Cyprus Statistical Service). In the public sector the
budget surplus increased significantly and the trend in the public
debt to GDP ratio appears to be reversing downward. Also, in the
banking sector funding conditions continued to improve against a
backdrop of favourable developments regarding non-performing
exposures.
The growth momentum is expected to be maintained in the medium
term. Real GDP is expected to grow by 3.6% in 2018 and by 2.9% in
2019, slowing towards 2.5% by 2022 according to the International
Monetary Fund (IMF) (Cyprus country report, December 2017). Growth
will be supported by private consumption and investment
expenditures and by an improving and robust labour market. On the
supply side, growth will be driven by favourable developments in
the tourism sector and robust performance in business services.
Tourism remains robust and continues to benefit from geopolitical
uncertainties in competing destinations. Tourist arrivals in 2017
reached 3.7 mn persons, an all-time high, and revenues reached an
estimated EUR2.7 bn or c.14% of GDP.
The budget surplus increased to 1.1% of GDP in 2017 according to
estimates by the IMF, from 0.5% the previous year. The budget is
expected to generate sizeable surpluses in the medium term (IMF).
The debt to GDP ratio is estimated at 100% in 2017, and it is
expected to decline to 76% by 2022 (IMF). At the same time debt
remains affordable with interest charges at 2.6% of GDP in
2016-2017, compared with 3.3% of GDP in 2013 (IMF). The government
used favourable conditions in debt markets to issue a new EUR850 mn
7-year bond in June 2017 yielding 2.8% to pre-finance borrowing
needs through to the end of 2018, and to smooth its repayment
schedule beyond 2018.
In the banking sector there have been significant improvements
in funding conditions and asset quality. Total deposits increased
marginally by 0.8% in the year, with resident deposits increasing
by 3.3%. Loan deleveraging continued in the year with total loans
outstanding dropping by 7.1% and loans to residents dropping by
4.8% (CBC).
Cyprus' consistent fiscal outperformance and favourable outlook
indicate a more rapid reversal in the public debt ratio and the
ratio of non-performing loans, than previously expected. The
outlook over the medium term is generally positive according to the
IMF and the European Commission, while the economy continues to
face challenges. Upside factors relate to a longer period of low
oil prices, further improvement of economic fundamentals in the
euro area and stronger investment spending as property prices are
stabilising and as projects in tourism, energy and public works are
being implemented. Downside risks to this outlook are associated
with the still high levels of non-performing loans, and public debt
ratio, and with a possible deterioration of the external
environment.
In this context of a strengthening economy and narrowing
imbalances, the Cyprus sovereign has benefited from a series of
upgrades. Most recently in October 2017, Fitch Ratings upgraded its
Long-Term Issuer Default ratings to 'BB' from
'BB-' with positive outlook. In September 2017, S&P Global
Ratings affirmed its long term sovereign rating on Cyprus at 'BB+',
only one notch below investment grade, and upgraded its outlook to
'positive' from 'stable'. In July 2017, Moody's Investors Service
upgraded the long-term issuer rating of the Cyprus sovereign to Ba3
from B1 to reflect Cyprus' economic recovery and maintained its
outlook to positive. The key drivers for rating upgrades have been
stronger economic performance than expected, progress in the
banking sector and consistent fiscal outperformance.
D. Business Overview
As the Cypriot operations account for 90% of gross loans and 90%
of customer deposits, the Group's financial performance is highly
correlated to the economic and operating conditions in Cyprus and
will consequently benefit from the country's recovery. Most
recently in October 2017, Standard and Poor's assigned the Bank
'B/B' long- and short-term issuer credit ratings with positive
outlook. The Bank currently has a long-term deposit rating from
Moody's Investors Service Cyprus Limited of Caa1 with a positive
outlook and a long-term issuer default rating from Fitch Ratings
Limited of B- with stable outlook. The key drivers for the ratings
were the improvement in the Bank's financial fundamentals mainly in
asset quality, and its funding position.
Tackling the Bank's loan portfolio quality is of utmost
importance for the Group. During the year an internal
reorganisation of the Restructuring and Recoveries Division (RRD)
was executed with the aim of boosting resources on both the Retail
and SME portfolios of RRD in order to further improve pace and
sustainability in these portfolios. Additionally, the Group has
created an incremental servicing engine powered by Pepper Cyprus
Limited, to support the Bank in resolving non-performing loans from
its SME and retail portfolios.
The strategic focus of the Group is to reshape its business
model to grow in the core Cypriot market through prudent new
lending and carefully developing the UK franchise. The Bank's
capital position remains adequate and the Group expects to continue
to be able to support the recovery of the Cyprus economy through
the provision of new lending. Growth in new lending in Cyprus is
focused on selected industries that are more in line with the
Bank's target risk profile, such as tourism, trade, professional
services, information/communication technologies, energy, education
and green projects. The Bank is currently looking to carefully
expand its UK operations, remaining consistent with the Group's
overall credit appetite and regulatory environment. With selective
presences in London and Birmingham and a predominantly retail
funded franchise, the UK strategy is to support its core
proposition in the property market, specifically targeting the
professional buy-to-let market and further expanding its mortgage
business and its savings, current accounts and trade-related
products for SMEs, professionals and Cypriot residents.
Aiming at supporting investments by SMEs and mid-caps to boost
the Cypriot economy and create new jobs for young people, the Bank
continues to provide joint financed schemes. The Bank continues its
partnership with the European Investment Bank (EIB), the European
Investment Fund (EIF), the European Bank for Reconstruction and
Development (EBRD) and the Cyprus Government.
Management is also placing emphasis on diversifying income
streams by boosting fee income from international transaction
services, wealth management and insurance. The Group's insurance
companies, EuroLife Ltd and General Insurance of Cyprus Ltd
operating in the sectors of life and general insurance
respectively, are leading players in the insurance business in
Cyprus, with such businesses providing a recurring income, further
diversifying the Group's income streams. The insurance income net
of insurance claims for FY2017 amounted to EUR50 mn, up by 13% yoy,
compared to EUR44 mn for FY2016, contributing to 16% of
non-interest income.
In order to further improve its funding structure, the Bank is
stepping up its efforts to manage the deposit mix to ensure
continued compliance with liquidity requirements, taking advantage
of the increased customer confidence towards the Bank, as well as
improving macroeconomic conditions.
E. Strategy and Outlook
The Group remains on track for implementing its strategic
objectives aiming to become a stronger, safer and a more focused
institution capable of supporting the recovery of the Cypriot
economy and delivering appropriate shareholder returns in the
medium term.
The key pillars of the Group's strategy are to:
-- Materially reduce the level of delinquent loans
-- Further improve the funding structure
-- Maintain an appropriate capital position by internally generating capital
-- Focus on the core Cyprus market and the UK operations
-- Achieve a lean operating model
-- Deliver value to shareholders and other stakeholders
KEY PILLARS PLAN OF ACTION
----------------------------------------------- ---------------------------------------------------------------------
1. Materially reduce the level of
delinquent loans * Sustain momentum in restructuring
* Focus on terminated portfolios (in Recovery Unit) -
"accelerated consensual foreclosures"
* Real estate management via REMU
* Explore alternative accelerating NPE reduction
measures such as NPE sales, securitisations etc.
----------------------------------------------- ---------------------------------------------------------------------
2. Further improve the funding structure
* Focus on shape and cost of deposit franchise
* Increase loan pool for the Additional Credit Claim
framework of ECB
* Further diversify funding sources
----------------------------------------------- ---------------------------------------------------------------------
3. Maintain an appropriate capital
position * Internally generating capital
* Potential AT1 issuance
----------------------------------------------- ---------------------------------------------------------------------
4. Focus on core markets
* Targeted lending in Cyprus into promising sectors to
fund recovery
* New loan origination, while maintaining lending
yields
* Revenue diversification via fee income from
international business, wealth, and insurance
* Careful expansion of UK franchise by leveraging the
UK subsidiary
----------------------------------------------- ---------------------------------------------------------------------
5. Achieve a lean operating model
* Implementation of digital transformation program
underway, aimed at enhancing productivity
distribution channels and reducing operating costs
over time
----------------------------------------------- ---------------------------------------------------------------------
6. Deliver returns
* Deliver appropriate medium term risk-adjusted returns
----------------------------------------------- ---------------------------------------------------------------------
The table below shows the Group's performance against the 2018
Target and the Medium Term Guidance.
Group Key Performance Actual Actual 2018 Medium-Term
Indicators(7) Dec-2016 Dec Target Guidance
2017
========================================= ========== ========= ============= ============
<40%
EUR2
bn organic
Asset Quality NPE ratio 55% 47% reduction <25%
=============== ======================== ========== ========= ============= ============
NPE coverage
ratio 41% 48% >50% >50%
======================================== ========== ========= ============= ============
Cost of Risk
(Provisioning
charge)(1) 1.7% 4.0%(1) <1.0% <1.0%
======================================== ========== ========= ============= ============
Capital CET1 Ratio 14.5% 12.7% >13%(2,3) >13%(2,3)
=============== ======================== ========== ========= ============= ============
Total Capital
Ratio 14.6% 14.2% >15%(2,3) >15%(2,3)
======================================== ========== ========= ============= ============
Profitability Total income EUR EUR >EUR800 Total
963 907 mn income
mn mn to grow
in excess
of cost(4)
=============== ======================== ========== ========= ============= ============
Cost to Income
ratio 41% 47% <50%(4)
======================================== ========== ========= ============= ============
Net fee and commission
income / total
income 17%(5) 20% >20% >20%
======================================== ========== ========= ============= ============
Balance Total assets EUR22.2 EUR23.6 EUR23 >EUR25
Sheet bn bn bn bn
=============== ======================== ========== ========= ============= ============
Earnings
per share EPS (cent) 14.27 (123.72) 40(6)
=============== ======================== ========== ========= ============= ============
(1) An amount of c.EUR500 mn reflecting the one-off effect of
the change in the provisioning assumptions is included in the cost
of risk, but is not annualised.
(2) Allowing for IFRS 9 transitional arrangements for regulatory
capital purposes (2018 - 5%, 2019 - 15%, 2020 - 30%, 2021 - 50% and
2022 - 75%).
(3) Including the impact of the adoption of the changes aligning
the EBA CRR default definition with the NPE definition.
(4) Excluding the special levy and SRF contribution.
(5) The net fee and commission income over total income for
FY2016 excludes non-recurring fees of EUR7 mn.
(6) The 2018 target for the earnings per share (EPS) does not
include the impact of trades or any unplanned or unforeseen
events.
(7) The NIM and the Net Loans to Deposits (L/D) targets have
been removed. A new target on Total Income has been included in the
key metrics
considering the focus of the Group on the total revenue
generation and the shift of income to other lines of the Income
Statement. The L/D ratio has been removed as it is not considered
representative following the efforts of the Group to comply with
the LCR ratio including the LCR add-on.
F. Definitions & Explanations
Accelerated Following the Regulation (EU) 2016/445
phase-in of the ECB of 14 March 2016 on the exercise
period of options and discretions available in
Union law (ECB/2016/4), the DTA phase-in
period was reduced from 10 to 5 years,
with effect as from the reporting of 31
December 2016. The applicable rate of
the DTA phase-in is 60% for 2017, 80%
for 2018 and 100% for 2019 (fully phased-in).
Accumulated Comprise (i) provisions for impairment
provisions of customer loans and advances, (ii) the
fair value adjustment on initial recognition
of loans acquired from Laiki Bank, and
(iii) provisions for off-balance sheet
exposures disclosed on the balance sheet
within other liabilities.
Advisory, Comprise mainly: 1) fees of external advisors
VEP and other in relation to: (i) disposal of operations
restructuring and non-core assets, (ii) customer loan
costs restructuring activities which are not
part of the effective interest rate and
(iii) the listing on the London Stock
Exchange and 2) voluntary exit plan cost.
AT1 AT1 (Additional Tier 1) is defined in
accordance with Articles 51 and 52 of
the Capital Requirements Regulation (EU)
No 575/2013.
CET1 capital CET1 capital ratio (transitional basis)
ratio (transitional is defined in accordance with the Basel
basis) II requirements.
CET1 fully CET1 fully loaded is defined in accordance
loaded with the Capital Requirements Regulation
(EU) No 575/2013.
Contribution Relates to the contribution made to the
to SRF Single Resolution Fund.
Cost to Income Cost-to-income ratio comprises total expenses
ratio (as defined) divided by total income (as
defined).
Data from The latest data was published on 14 February
the Statistical 2018.
Service of
the Republic
of Cyprus
Deferred The DTA adjustments relate to Deferred
Tax Asset Tax Assets totalling EUR384 mn and recognised
adjustments on tax losses totalling EUR3.1 bn and
can be set off against future profits
of the Bank until 2028 at a tax rate of
12.5%. There are tax losses of c.EUR8.5
bn for which no deferred tax asset has
been recognised. The recognition of deferred
tax assets is supported by the Bank's
business forecasts and takes into account
the recoverability of the deferred tax
assets within their expiry period.
Earnings The 2018 target for the earnings per share
per Share (EPS) does not include the impact of any
(EPS) unplanned or unforeseen risk reduction
trades, or macro events.
ECB European Central Bank
ELA Emergency Liquidity Assistance
Gross loans Gross loans are reported before the fair
value adjustment on initial recognition
relating to loans acquired from Laiki
Bank (calculated as the difference between
the outstanding contractual amount and
the fair value of loans acquired) amounting
to EUR668 mn at 31 December 2017 (compared
to EUR721 mn at 30 September 2017).
Group The Group consists of Bank of Cyprus Holdings
Public Limited Company, "BOC Holdings",
its subsidiary Bank of Cyprus Public Company
Limited, the "Bank" and the Bank's subsidiaries.
Leverage The leverage ratio is the ratio of tangible
ratio total equity to total assets for the relevant
period.
Loans in Loans in arrears for more than 90 days
arrears for (90+ DPD) are defined as loans past-due
more than for more than 90 days and loans that are
90 days (90+ impaired (impaired loans are those (i)
DPD) for which a provision for impairment has
been recognised on an individual basis
or (ii) for which incurred losses existed
at their initial recognition or (iii)
customers in Debt Recovery).
Loans in 90+ DPD ratio means loans in arrears for
arrears for more than 90 days (90+ DPD) (as defined)
more than divided by gross loans (as defined).
90 days (90+
DPD) ratio
(Loss)/profit (Loss)/profit after tax excludes advisory,
after tax VEP and other restructuring costs, as
and before well as net gains on disposal of non-core
restructuring assets.
costs
Market Shares Both deposit and loan market shares are
based on data from the Central Bank of
Cyprus.
Net fee and Net fee and commission income over total
commission income is the net fee and commission income
income over divided by the total income (as defined).
total income The ratio of 17% for 2016 excludes non-recurring
fees of EUR7 mn.
Net Interest Net interest margin is calculated as the
Margin net interest income (annualised) divided
by the average interest earning assets.
Interest earning assets include: cash
and balances with central banks, plus
loans and advances to banks, plus net
customer loans and advances, plus investments
(excluding equities and mutual funds)
and derivatives.
Net loans Loans and advances net of accumulated
and advances provisions.
Net loan Net loan to deposits ratio is calculated
to deposit as the net loans and advances to customers
ratio divided by customer deposits, including
loans and deposits held for sale.
Net Stable The NSFR is calculated as the amount of
Funding Ratio "available stable funding" (ASF) relative
(NSFR) to the amount of "required stable funding"
(RSF), on the basis of Basel III standards.
Its calculation is a SREP requirement.
European Banking Authority (EBA) is working
on finalising the NSFR and enforcing it
as a regulatory ratio.
Non-performing In 2014 the EBA published its reporting
exposures standards on forbearance and non-performing
(NPEs) exposures (NPEs). According to the EBA
standards, a loan is considered an NPE
if: (i) the debtor is assessed as unlikely
to pay its credit obligations in full
without the realisation of the collateral,
regardless of the existence of any past
due amount or of the number of days past
due, or (ii) the exposures are impaired
i.e. in cases where there is a specific
provision, or (iii) there are material
exposures which are more than 90 days
past due, or (iv) there are performing
forborne exposures under probation for
which additional forbearance measures
are extended, or (v) there are performing
forborne exposures under probation that
present more than 30 days past due within
the probation period. The NPEs are reported
before the deduction of accumulated provisions
(as defined).
NPE ratio NPEs ratio is calculated as the NPEs as
per EBA (as defined) divided by gross
loans (as defined).
Operating Comprises profit before total provisions
profit and impairments (as defined), share of
profit from associates and joint ventures,
tax, profit attributable to non-controlling
interests, advisory, VEP and other restructuring
costs, and net gains on disposal of non-core
assets (where applicable).
Operating Operating profit return on average assets
profit return is calculated as the operating profit
on average divided by the average of total assets
assets for the relevant period.
Phased-in In accordance with the legislation in
Capital Conservation Cyprus which has been set for all credit
Buffer (CCB) institutions, the applicable rate of the
CCB is 1.25% for 2017, 1.875% for 2018
and 2.5% for 2019 (fully phased-in).
Provision The provision charge comprises provisions
charge for impairments of customer loans, net
of gain/(loss) on derecognition of loans
and advances to customers and changes
in expected cash flows.
Provisioning Provisioning charge (cost of risk) (year
charge (cost to date) is calculated as the provisions
of risk) for impairment of customer loans and provisions
for off-balance sheet exposures, net of
gain on derecognition of loans and advances
to customers and changes in expected cash
flows divided by average gross loans (the
average balance calculated as the average
of the opening balance and the closing
balance). An amount of c.EUR500 mn reflecting
the one-off effect of the change in the
provisioning assumptions is included in
the cost of risk, but is not annualised.
Provisioning Provisioning coverage ratio for 90+ DPD
coverage is calculated as the accumulated provisions
ratio for (as defined) over 90+ DPD (as defined).
90+ DPD
Provisioning Provisioning coverage ratio for NPEs is
coverage calculated as accumulated provisions (as
ratio for defined) over NPEs (as defined).
NPEs
Quarterly Average of interest earning assets as
average interest at the beginning and end of the relevant
earning assets quarter. Interest earning assets include:
cash and balances with central banks,
plus loans and advances to banks, plus
net customer loans and advances, plus
investments (excluding equities and mutual
funds) and derivatives.
Qoq Quarter on quarter change
Special levy Relates to the special levy on deposits
of credit institutions in Cyprus.
The remaining Comprises net foreign exchange gains,
component net gains on other financial instrument
of non-interest transactions, net gains/(losses) from
income revaluation and disposal of investment
properties and on disposal of stock of
properties, and other income.
Total Capital Total capital ratio is defined in accordance
ratio with the Capital Requirements Regulation
(EU) No 575/2013.
Total expenses Total expenses comprise staff costs, other
operating expenses and the special levy
and contribution to the Single Resolution
Fund. It does not include restructuring
costs (advisory, VEP and other restructuring
costs). Restructuring costs amount to
EUR29.3 mn, EUR20.7 mn, EUR13.8 mn, EUR7.3
mn and EUR114.3 mn for the year ended
31 December 2017, the nine months ended
30 September 2017, the six months ended
30 June 2017, the three months ended 31
March 2017 and for the year ended 31 December
2016, respectively.
Total income Total income comprises net interest income
and non-interest income. It does not include
net gains on disposal of non-core assets.
Net gains on disposal of non-core assets
was
EUR0 mn and EUR59 mn for the year ended
31 December 2017 and for the year ended
31 December 2016, respectively.
Total provisions Total provisions and impairments comprise
and impairments provision charge (as defined), plus provisions
for litigation and regulatory matters
plus impairments of other financial and
non-financial assets.
Underlying Statutory basis adjusted for certain items
basis as detailed in the Basis of Presentation.
Write offs Loans together with the associated provisions
are written off when there is no realistic
prospect of future recovery. Partial write-offs,
including non-contractual write-offs,
may occur when it is considered that there
is no realistic prospect for the recovery
of the contractual cash flows. In addition,
write-offs may reflect restructuring activity
with customers and are part of the terms
of the agreement and subject to satisfactory
performance.
Yoy Year on year change
Basis of Presentation
This announcement covers the results of Bank of Cyprus Holdings
Public Limited Company, "BOC Holdings" or "the Company", its
subsidiary Bank of Cyprus Public Company Limited, the "Bank" and
together with the Bank's subsidiaries, the "Group", for the year
ended 31 December 2017.
At 31 December 2016, the Bank was listed on the CSE and the
Athens Exchange. On 18 January 2017, BOC Holdings, incorporated in
Ireland, was introduced in the Group structure as the new holding
company of the Bank. On 19 January 2017, the total issued share
capital of BOC Holdings was admitted to listing and trading on the
LSE and the CSE. As a result of this corporate change, the
comparative information for 2016 and as at 31 December 2016 are
presented for the Bank together with its subsidiaries.
Financial information presented in this announcement is being
published for the purposes of providing preliminary Group financial
results for the year ended 31 December 2017. The financial
information in this preliminary announcement is not audited and
does not constitute statutory financial statements of BOC Holdings
within the meaning of section 340 of the Companies Act 2014. The
Group statutory financial statements for the year ended 31 December
2017 are expected to be delivered to the Registrar of Companies of
Ireland within 28 days of 30 September 2018 (as at the date of this
report, such statutory financial statements have not been reported
on by independent auditors of BOC Holdings). The Board of Directors
approved this financial information on 26 February 2018. BOC
Holdings' most recent statutory financial statements for the
purposes of Chapter 4 of Part 6 of the Companies Act 2014 of
Ireland for the period 11 July 2016 to 31 December 2016, upon which
the auditors have given an unqualified audit report (with emphasis
of matter on material uncertainty related to going concern), were
published on 27 April 2017 and have been annexed to the annual
return and delivered to the Registrar of Companies of Ireland.
Statutory basis: Statutory information is set out on pages 4-5.
However, a number of factors have had a significant effect on the
comparability of the Group's financial position and results.
Accordingly, the results are also presented on an underlying
basis.
Underlying basis: The statutory results are adjusted for certain
items (as described on page 8) to allow a comparison of the Group's
underlying performance, as set out on pages 6-7.
The financial information included in this announcement is not
audited by the Group's external auditors.
This announcement and the presentation for the Preliminary Group
Financial Results for the year ended 31 December 2017 have been
posted on the Group's website www.bankofcyprus.com (Investor
Relations/Financial Results).
Definitions: The Group uses a number of definitions in the
discussion of its business performance and financial position which
are set out in section F.
The Preliminary Group Financial Results for the year ended 31
December 2017 are presented in Euro (EUR) and all amounts are
rounded as indicated. A comma is used to separate thousands and a
dot is used to separate decimals.
Forward Looking Statements
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. These
forward-looking statements include, but are not limited to,
statements relating to the Group's intentions, beliefs or current
expectations and projections about the Group's future results of
operations, financial condition, liquidity, performance, prospects,
anticipated growth, provisions, impairments, 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 EU Member States, interest
rate and foreign exchange fluctuations, legislative, fiscal and
regulatory developments and information technology, litigation and
other operational risks. 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 from 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.
Contacts
For further information please contact:
Investor Relations
+ 357 22 122239
investors@bankofcyprus.com
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. The Bank of Cyprus
Group operates through a total of 123 branches, of which 121
operate in Cyprus, 1 in Romania and 1 in the United Kingdom. Bank
of Cyprus also has representative offices in Russia, Ukraine and
China. The Bank of Cyprus Group employs 4,355 staff worldwide. At
31 December 2017, the Group's Total Assets amounted to EUR23.6 bn
and Total Equity was EUR2.6 bn. The Bank of Cyprus Group comprises
Bank of Cyprus Holdings Public Limited Company, its subsidiary Bank
of Cyprus Public Company Limited and its subsidiaries.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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