Announcement
Bank of Cyprus Holdings Public
Limited Company
Annual Financial Report for the year
ended 31 December 2023
Nicosia, 28 March 2024
Bank of Cyprus Holdings Public
Limited Company ('BOC Holdings' or the 'Company') announces today
that its Board of Directors has approved its annual financial
report including the audited financial statements of the Bank of
Cyprus Group, comprising BOC Holdings, its subsidiary Bank of
Cyprus Public Company Limited and its subsidiaries (the 'Group')
for the year ended 31 December 2023 (the 'Annual Financial
Report').
A copy of the Annual Financial Report
will be submitted to the National Storage Mechanism and will be
shortly available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
The Annual Financial Report will
also be available on the Group's website www.bankofcyprus.com
(Group/Investor Relations).
For further information, please
contact Investor Relations at investors@bankofcyprus.com.
Additional Information
The following information is
extracted from the Company's Annual Financial Report and,
together with the Company's announcement 'Group
Financial Results for the year ended 31 December 2023
dated 28 March 2024, constitutes the material
required under Regulation 33(5)(b)(ii) of the Irish Transparency
(Directive 2004/109/EC) Regulations 2007 to be communicated to the
media in unedited full text. This material is not a substitute for
reading the Company's Annual Financial Report in full. Terms in
this section Additional Information shall have the meanings given
to them in the Annual Financial Report.
Group Profile
The Bank of Cyprus Group is the leading banking and financial
services group in Cyprus, providing a wide range of financial
products and services which include retail and commercial banking,
finance, factoring, investment banking, brokerage, fund management,
private banking, life and general insurance. At 31 December 2023,
the Bank of Cyprus Group operated through a total of 64 branches in
Cyprus, of which 4 operated as cash offices. The Bank of Cyprus
Group employed 2,830 staff worldwide. At 31 December 2023, the
Group's Total Assets amounted to €26.6 bn and Total Equity was €2.5
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.
Additional Information (continued)
Principal risks and
uncertainties - Risk management and mitigation
The following information is extracted from pages 36 to 37 of
the Annual Financial Report.
As part of its business activities,
the Group faces a variety of risks. The Group identifies, monitors,
manages and mitigates these risks through various control
mechanisms. Credit risk, liquidity and funding risk, market risk
(arising from adverse movements in foreign currency exchange rates,
interest rates, security prices and property prices), insurance and
re insurance risk and operational risk, are some of the key
significant risks the Group faces. In addition, key risks
facing the Group include geopolitical risk, legal risk, regulatory
compliance risk, information security and cyber risk, digital
transformation and technology risks, climate related and
environmental risks, and business model and strategic
risk.
Information relating to the
principal risks the Group faces and risk management is set out in
Notes 44 to 47 of the Consolidated Financial Statements and in the
'Risk and Capital Management Report', both of which form part of
the Annual Financial Report for the year ended 31 December 2023,
and in the 'Pillar III Disclosures 2023' which is published on the
Group's website. In addition, in relation to legal risk arising
from litigations, investigations, claims and other matters, further
information is disclosed in Note 38 of the Consolidated Financial
Statements.
Additionally, the Group is exposed
to the risk of changes in the value of property which is held
either for own use or as stock of property or as investment
property. Stock of property is predominately acquired in exchange
for debt and is intended to be disposed of in line with the Group's
strategy. Further information is disclosed in Note 27 of the
Consolidated Financial Statements.
Details of the financial instruments
and hedging activities of the Group are set out in Note 21 of the
Consolidated Financial Statements. Further information on financial
instruments is also presented in Notes 44 and 45 of the
Consolidated Financial Statements.
The Group's activities are mainly in
Cyprus therefore the Group's performance is impacted by changes in
the Cyprus operating environment, as described in the 'Operating
environment' section of this Directors' Report and changes in the
macroeconomic conditions and geopolitical developments as described
in the 'Risk and Capital Management Report' which forms part of the
Annual Financial Report for the year ended 31 December
2023.
In addition, details of the
significant and other judgements, estimates and assumptions which
may have a material impact on the Group's financial performance and
position are set out in Note 5 of the Consolidated Financial
Statements.
As the war in Ukraine continues and
the latest military conflict in the Middle east rages on,
considerable uncertainly is added to the outlook for the global
economy and the wider impact will depend on how these conflicts
evolve in the future. The Group has limited direct exposure to both
Ukraine and Russia as well as to Israel, and is continuously
monitoring the current affairs and remains vigilant to take
precautionary measures as required.
The risk factors discussed above and
in the reports referenced above should not be regarded as a
complete and comprehensive statement of all potential risks and
uncertainties. There may be risks and uncertainties of which the
Group is not aware of, or which the Group does not consider
significant, but which may become significant. There are
challenging conditions in global markets due to the high interest
rate environment,
Additional Information (continued)
Principal risks and
uncertainties - Risk management and mitigation
(continued)
inflationary pressures, the
geopolitical developments, the growing threat from cyberattacks and
other unknown risks. As a result the precise nature of all risks
and uncertainties that the Group faces cannot be predicted with
accuracy as many of these risks are outside of the Group's
control.
The Pillar 3 Disclosures Report (unaudited) of the Group,
required with respect to the requirements of the Capital
Requirement Regulation (EU) No 575/2013, is
published on the
Group's website www.bankofcyprus.com
(Group/Investor
Relations).
Related party
transactions
The following information is extracted from pages 418 to 426
of the Annual Financial Report, unless otherwise
indicated.
Related parties of the Group include
associates and joint ventures, key management personnel, members of
the Board of Directors and their connected persons. Connected
persons for the purpose of this disclosure include spouses,
minor/dependent children and companies in which the directors/key
management personnel, hold directly or indirectly, at least 20% of
the voting shares in a general meeting, or act as executive
director or exercise control of the entities in any way.
Related parties also include
entities providing key management personnel services to the Group
where relevant.
(a) Transactions
with subsidiaries
The Company is the holding company
of the Group. The Company enters into transactions with its
subsidiaries in the normal course of business. Balances and
transactions between the Company and its subsidiaries are disclosed
in Note 17 of the Company's financial statements. Transactions with
the subsidiaries have been eliminated on consolidation.
(b) Transactions
with associates
From time to time, the Group
provides to and receives from its associates certain banking and
financial services. These are not material to the Group and all the
transactions are made on normal business terms as for comparable
transactions with customers of a similar standing.
(c) Compensation of
the Board of Directors and key management
personnel
For disclosures made in accordance with the provisions of IAS
24 Related Party Disclosures and sections 305 and 306 of the
Companies Act 2014, in respect of the compensation of the Board of
Directors and key management personnel, please refer to Note 50 (c)
of the Consolidated Financial Statements.
(d) Transactions
with Directors and key management personnel
For information on the deposits, loans and advances and other
credit balances held by the members of the Board of Directors and
key management personnel and their connected persons, as at the
balance sheet date and other relevant information as required by
the Companies Act 2014, please refer to Note 50 (d) of the
Consolidated Financial Statements.
Additional Information (continued)
Related party
transactions (continued)
Loans to Directors
The following information is
presented in accordance with the Companies Act 2014. For the
purposes of the Companies Act 2014 disclosures, 'Directors' means
the current Board of Directors of the Company and any past
Directors who were members of the Board of Directors of the Company
during the year.
All transactions with members of the
Board of Directors and their connected persons are made on normal
business terms as for comparable transactions, including interest
rates, with customers of a similar credit standing.
There were 12 Directors in office
during the year (2022: 12 Directors), three of whom availed of
credit facilities (2022: four Directors). Two of the Directors who
availed of credit facilities had balances outstanding at 31
December 2023 (2022: four of the Directors who availed of credit
facilities had balances outstanding).
For their balances outstanding, please refer to Note 50 (d) of
the Consolidated Financial Statements.
The value of arrangements at the
beginning and end of the current and preceding financial years as
stated below, expressed as a percentage of the net assets of the
Group at the beginning and end of the current and preceding
financial years is less than 1% in accordance with section 307 of
the Companies Act 2014. No amounts have been waived during the year
ended 31 December 2023.
Key management personnel in office during the year (and their
connected persons)
There were 20 key management
personnel in office during the year (2022: 21 key management
personnel), 20 of whom availed of credit facilities (2022: 20 key
management personnel). All of the key management personnel who
availed of credit facilities had balances outstanding at 31
December 2023 and 31 December 2022.
A number of loans and advances have
been extended to key management personnel on the same terms as
those applicable to the rest of the Group's employees and to their
connected persons on the same terms as those of customers of a
similar credit standing.
Where no amount is shown in the
tables below, this indicates a credit balance, a nil balance, or a
balance of less than €500.
For further details of transactions with key management
personnel and their connected persons, please refer to Note 50 (d)
of the Consolidated Financial Statements.
For further information on related party transactions please
refer to Note 50 of the Consolidated Financial
Statements.
Statement of Directors'
Responsibilities
The following information is extracted from pages 48 to 49 of
the Annual Financial Report.
The Directors are responsible for
preparing the Annual Financial Report and the financial statements
in accordance with International Financial Reporting Standards
(IFRS) adopted
Additional Information (continued)
Statement of Directors'
Responsibilities (continued)
by the EU and with those parts of
the Companies Act 2014 applicable to companies reporting under
IFRSs, the EU (Credit Institutions: Financial Statements)
Regulations 2015 and, in respect of the consolidated financial
statements, Article 4 of the International Accounting Standards
(IAS) Regulation. Company law requires the Directors to prepare
Group and Company financial statements for each financial
year.
Under Irish law the Directors shall
not approve the financial statements unless they are satisfied that
they give a true and fair view of the Group's and Company's assets,
liabilities and financial position as at the end of the financial
year and of the profit or loss of the Group and the Company for the
financial year and otherwise comply with the Companies Act
2014.
In preparing these financial
statements, the Directors are required to:
- select suitable accounting policies and apply them
consistently;
- make judgements and estimates that are reasonable and
prudent;
- state whether the financial statements have been prepared in
accordance with IFRSs adopted by the EU and ensure that they
contain the additional information required by the Companies Act
2014; and
- prepare the financial statements on a going concern basis
unless it is inappropriate to presume that the Group and the
Company will continue in business.
The Directors are responsible for
keeping adequate accounting records that are sufficient to show and
explain the Company's transactions, to disclose with reasonable
accuracy at any time the assets, liabilities and financial position
of the Company and enable them to ensure that the financial
statements comply with the provisions of the Companies Act 2014 and
Article 4 of IAS Regulation. The Directors, through the use of
appropriate procedures and systems, have also ensured that measures
are in place to secure compliance with the Company's and the
Group's obligations to keep adequate accounting records. These
accounting records are kept at the Company's registered office at
10 Earlsfort Terrace, Dublin 2, D02 T380, Ireland and at 51
Stasinos Street, 2002, Strovolos, Nicosia, Cyprus.
In compliance with section 283 of
the Companies Act 2014, the information and returns relating to the
business dealt with in the accounting records for 2023 have been
sent to the registered office of the Company. The Directors are
also responsible for safeguarding the assets of the Group and the
Company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
Under applicable law and the
requirements of the UK's FCA Listing Rules issued by the LSE, the
Directors are also responsible for preparing a Directors' Report
and reports relating to Directors' remuneration and corporate
governance. The Directors are also required by the Transparency
(Directive 2004/109/EC) Regulations 2007, as amended Part 2
(Transparency Requirements) of the Central Bank (Investment Market
Conduct) Rules 2019 and the Disclosure Guidance and Transparency
Rules of the UK's Financial Conduct Authority to include a
Directors' report containing a fair review of the development and
performance of the business and the position of the Group and a
description of the principal risks and uncertainties facing the
Group.
The Directors are responsible for
the maintenance and integrity of the corporate and financial
information included on the Company's website. Legislation in
Ireland governing the preparation and dissemination of financial
statements may differ from legislation in other
jurisdictions.
Additional Information (continued)
Statement of Directors'
Responsibilities (continued)
The Directors confirm that, to the
best of each Director's knowledge and belief:
- they have complied with the above requirements in preparing
the financial statements;
- the financial statements, prepared in accordance with IFRSs as
adopted by the EU, give a true and fair view of the assets,
liabilities and financial position of the Group and the Company and
of the profit or loss of the Group and the Company;
- the Directors' report contained in the Annual Financial Report
2023 includes a fair review of the development and performance of
the business and the position of the Group and the Company,
together with a description of the principal risks and
uncertainties that they face; and
- the Annual Financial Report 2023 and the financial statements,
taken as a whole, is fair, balanced and understandable and provide
the information necessary for shareholders to assess the Group's
position and performance, business model and strategy.
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 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 Group's near term, medium 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, information technology, litigation and
other operational risks, adverse market conditions, the impact of
outbreaks, epidemics or pandemics and geopolitical developments.
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.
Changes in our reporting frameworks and accounting standards,
including the recently announced reporting changes and the
implementation of IFRS 17 'Insurance Contracts', which may have a
material impact on the way we prepare our financial statements and
(with respect to IFRS 17) may negatively affect the profitability
of Group's insurance business.