Bank of Cyprus Public : Press reports regarding capital securities

Announcement

Press reports regarding capital securities

Nicosia, 27 January 2015

Bank of Cyprus Public Company Ltd ("the Bank") wishes to refer to various press reports in connection with a letter sent by it to the Capital Securities Association.

For the avoidance of any doubt, the Bank sets out below the exact content of the letter sent to the Capital Securities Association, which is self explanatory.

Group Profile

Founded in 1899, Bank of Cyprus Group is the leading banking and financial services group in Cyprus. The Group provides 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 Group operates through a total of 262 branches, of which 126 operate in Russia, 130 in Cyprus, 1 in Romania, 4 in the United Kingdom and 1 in the Channel Islands. Bank of Cyprus also has representative offices in Russia, Ukraine and China. The Bank of Cyprus Group employs 6.639 staff worldwide. At 30 September 2014, the Group's Total Assets amounted to €27,5 bn and Total Equity was €3,8 bn.

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Nicosia,23rd January 2015
Messrs
Phivos Mavrovouniotis,Chairman Stavros Yiallourides,Vice Chairman CapitaiSecurities Association Limassol

Bank of Cyprus Group

Group Headquarters

P.O.Box 21472

CY-1599 Nicosia www.bankofcyprus.com

Email: [e-mail]
Dear Sirs,
Following various exchanges between us as well as the meeting we had on 19
December 2014, where the Capitai Securities issue was discussed and various proposals were presented by the Capitai Securities Holders,we would like to inform you that the proposal has been examined by the Bank with due care and in good faith towards the Capitai Securities Holders.
lt is with regret that we inform you that any proposals relating to any collective or generai compensation schemes cannot be accepted or effected by the Bank as there is no adequate legai basis that will support such actions. Moreover,the Bank is not in a financial condition to proceed in any such actions. As you are aware,the various legai issues relating to this matter are currently before the Courts of the Republic. Notwithstanding the legai aspects of the matter, the Bank is not currently in a financial position to satisfy the proposals made.
As you are ali well aware, the Bank's financial condition has been severely affected as a result of the March 2013 events.The facts and circumstances are well known and it cannot be disputed that the viability of the Bank itself is stili in great danger, primarily resulting from decisions of third parties (either European or Cypriot institutional bodies). The main victim of these decisions is primarily the Bank itself. The Bank currently faces and is expected to face many challenges, and the support that should be given to the Bank would be most valuable not only to the Bank but would also alleviate the economie crisis in Cyprus contributing to the welfare of ali Cypriots.
The Bank is fully aware of the social aspects of the matter as well as the severe economie conditions that many Cypriots, including many Capitai Securities Holders are now facing. In line with its long historical social responsibility,the Bank together with other parties adopts and will continue to adopt in various actions that help in

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alleviating the pain and economie problems of any socially affected and vulnerable categories of people.

Capitai Securities Holders may certainly pursue any claims before the Courts and the

Bank will fully abide by any such court decisions.

The Bank appreciates your cooperation and support aiming towards the recovery of the Bank and the prosperity of ali its stakeholders (including the Capitai Securities

Holders) in the interests of both the Bank and the Cyprus economy as a whole.

Yours faithfully,

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Group Chairman

Michael Spanos

Senior lndependent Director

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