Annual Report 2003
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ANNUAL REPORT 2003 CYPRUS . ∂UROPE BANK OF CYPRUS GROUP GROUP PROFILE Founded in 1899, the Bank of Cyprus Group (the Our firm commitment continues to be: Group) is the leading financial services group in the maximisation of shareholder value, Cyprus, with a dynamic presence in Greece and through rational expansion in conjunction operations in the United Kingdom, Australia and with a coordinated effort to exploit the the Channel Islands. opportunities that arise in the evolving The Group offers a wide range of financial financial environment, in order to achieve products and services, which include banking increased profitability and efficiency, services, finance, factoring, general and life the provision of an upgraded level of customer insurance, brokerage, investment banking, service in terms of speed and quality, offering mutual fund management and custody services. the best possible solutions to customers’ Bank of Cyprus Ltd (the Bank) holds a leading ever-increasing needs, through innovative position in Cyprus. Since 1991, the Bank financial products and services, and commenced its dynamic expansion in Greece. the recognition of the value of our human Today, the Bank of Cyprus Group is the seventh resources, the further development of their largest financial services group in the wider skills and their continuous education and Greek market (based on deposits and advances). training using modern and effective Due to its expansion to countries with methods in order to achieve our common sizeable Cypriot or Greek communities or goals and objectives. business ties, the Bank is well established as the international bank of the Hellenism. The Group has an established banking presence in the United Kingdom. The Group’s international presence was further enhanced in 2000 with the operation of a wholly owned subsidiary bank in Australia. The Bank of Cyprus Group currently operates through a total of 275 banking outlets, of which 178 operate in Cyprus, 82 in Greece, six in the United Kingdom, eight in Australia and one in the Channel Islands. Bank of Cyprus also has Representative Offices in South Africa, Canada, USA, Russia and Romania. The Group employs 5 703 staff worldwide. The Bank of Cyprus shares are listed on the Cyprus Stock Exchange (CSE) and the Athens Exchange (ATHEX). The Bank is the largest listed company on the CSE in terms of market capitalisation. The Bank has a well-diversified shareholder base and the number of its shareholders exceeds 69 000. 1 BANK OF CYPRUS GROUP DIRECTORS AND EXECUTIVES Board of Directors of Bank of Cyprus Ltd Solon A. Triantafyllides (Group Holding Company) CHAIRMAN Christos S. Pantzaris VICE-CHAIRMAN Andronicos Agathocleous Andreas Pittas Dimitris P. Ioannou Polys G. Polyviou Vassilis G. Rologis George A. David Costas Z. Severis Andreas Artemis Theodoros Aristodemou Anna Diogenous Demetrios Z. Pierides George M. Georgiades Evdokimos Xenophontos Andreas Jacovides Christakis G. Christofides Christos Mouskis Group Executive Management Christos S. Pantzaris CHIEF EXECUTIVE OF BANK OF CYPRUS Evdokimos Xenophontos GROUP CHIEF GENERAL MANAGER Group General Managers George Charalambous SENIOR GENERAL MANAGER BANKING OPERATIONS CYPRUS AND GROUP CREDIT RISK Antonis Jacouris GENERAL MANAGER CREDIT RISK Yiannis Kypri GENERAL MANAGER FINANCE Vassos Shiarly GENERAL MANAGER BANKING OPERATIONS CYPRUS Charalambos C. Charalambides GENERAL MANAGER Charilaos G. Stavrakis GENERAL MANAGER INTERNATIONAL BANKING SERVICES Andreas Eliades GENERAL MANAGER BANK OF CYPRUS GREECE Group Financial Controller Christis Hadjimitsis Secretary Yiannis Kypri Legal Advisers Chryssafinis & Polyviou Auditors Ernst & Young Chartered Accountants Registered Office Group Headquarters 51 Stassinos Street, Ayia Paraskevi, Strovolos P.O. Box 24884, CY-1398 Nicosia, Cyprus Telephone: 22842100, Fax: 22336258 2 BANK OF CYPRUS GROUP FINANCIAL HIGHLIGHTS 2003) 2002) 2001) Key profitability indicators (Cí million) Net interest income 199) 176) 160) Profit before provisions 101) 90) 92) (Loss)/profit after tax (29) (21) 47) Key balance sheet indicators (Cí million) Total assets 9 062) 8 126) 7 681) Shareholders’ funds 523) 506) 541) Loans and advances to customers 5 689) 5 044) 4 414) Customer deposits 7 390) 6 836) 6 277) Per share data (cents) (Losses)/earnings per share (6,5) (4,9) 10,7) Dividend per share _) _) 13,0) Capital adequacy Tier 1 capital 8,5%) 7,7%) 7,8%) Total 13,2%) 11,6%) 11,9%) Number of employees 5 703) 5 518) 5 312) Credit rating (31/03/2004) Long term) Short term Moody’s ∞3) P-2) Fitch Ratings ∞-) F-2) Contribution to indices CSE General Index FTSE/CySE Index ) FTSE-Med 100 Index ) 3 BANK OF CYPRUS GROUP OUR VISION Our vision is to be the preferred financial services organisation in Cyprus, Greece, the Hellenic community of the United Kingdom and wherever there are Greeks across the world, where: our customers experience the highest quality of service, and our people feel proud to belong, thus strengthening the Group’s position, and maximising the value created for our shareholders and society. OUR STRATEGIC PRIORITIES Our efforts to implement our vision focus on the following set priorities: the strengthening of our leading position in Cyprus, the improvement of our profitability, our dynamic expansion in Greece and our establishment as the Bank that offers the best customer service, the strengthening of our leading position in the Cypriot and Greek communities of the United Kingdom, and our establishment as the Bank of the Hellenism in Australia. 4 BANK OF CYPRUS GROUP OUR STRATEGIC OBJECTIVES Our main strategic objectives are: In the United Kingdom, the organic expansion of the Group, we aim at: the continuous improvement of our maintaining our leading market position in products and services in all areas of activity the Cypriot and Greek communities, and the enhancement of our performance in further developing our services to order to offer better customer service and to businesses with Cypriot or Greek ties, increase the Group’s long term profitability, particularly focussing on the Retail and the utilisation of technology across the SME sectors, whole range of our services with maximising our efficiency and containing flexibility, and our costs, and the further training and development of increasing our revenues. our staff. In Australia, In Cyprus, we aim at: where the core of our operations is based, attracting new, high quality customers, we aim at: providing a high level of customer service reducing the level of non-performing loans, and enriching the range of products and increasing the profitability of our operations, services offered, to cover the banking needs maintaining our leading market position in of, primarily, the Cypriot and Greek banking (deposits and advances), communities, and strengthening our market share in the Group’s further improving our infrastructure. other areas of activity, with particular emphasis on exploiting cross-selling opportunities, and attracting customers that are now entering the market, as well as small and medium sized enterprises (SMEs). In Greece, the focus of our dynamic expansion, we aim at: growing our customer base with a parallel increase in our market share to around 5% in deposits and advances by the end of 2007, steadily approaching the size of the largest Greek banking groups, maintaining a balance between our rate of expansion, profitability and liquidity, sustaining the flexibility of our organisational structure in order to offer specialised products for all sectors where our customers operate and to promptly respond to emerging opportunities, and increasing our loan portfolio, with emphasis on the consumer and SME sectors. 5 BANK OF CYPRUS GROUP THE IMPLEMENTATION OF OUR OBJECTIVES At Group level: possible level of service in each market we are implementing international best segment and to efficiently exploit the growth practices for the monitoring and control of opportunities of each sector, and credit and other risks. The Group is fully aware we are dynamically penetrating the leasing, of the guidelines of the Basle Committee factoring and insurance markets and we are (Basle II) and of the European Union directives utilising the Bank’s branches as sales points (CAD 3) and, in co-operation with the Central for the whole range of products offered by Bank of Cyprus, is preparing to adopt the Group. contemporary risk monitoring and measurement methods for all types of risk, and In the United Kingdom: we complement our branch network with a we are simplifying procedures and controlling full range of alternative distribution channels staff and other costs, in the main markets where we operate. we are further developing our operations through our co-operation with other In Cyprus: reputable British financial institutions, we are taking measures for the collection of we are strengthening our ties with the Group, overdue accounts and the strengthening of thus taking advantage of the available the collateral held, synergies. To this end, we are planning the we are implementing (since 2002) a merger of the operations of our subsidiary, programme for the containment of operating Bank of Cyprus (London), with those of the costs and the control of recruitments, Bank of Cyprus branch in the United Kingdom, we are continuously adjusting and improving we are placing particular emphasis on building our pricing policy in banking, a personal relationship with our customers, and we are achieving the best returns and we are restructuring our branch network in profitability