Shareholders approve Bank of Cyprus €1bn issue

GMT 22:05 2014 Thursday ,28 August

Arab Today, arab today Shareholders approve Bank of Cyprus €1bn issue

Bank of Cyprus branch in the capital Nicosia
Nicosia - AFP

Shareholders in Bank of Cyprus, the island's largest lender, Thursday approved a one-billion-euro ($1.34-billion) capital increase from private placement to help it survive following a haircut on deposits last year.
BoC announced that 87 percent of shareholders present at an EGM (extraordinary general meeting) approved the capital issue, placing 4.16 billion new ordinary shares at a price per share of 24 euro cents.
The placement attracted institutional investors from Europe, North America and Russia, including a number of international investors introduced by WL Ross & Co LLC and the European Bank for Reconstruction and Development.
The increase will take the bank's core Tier 1 capital to 15.1 percent from its present level of 11.3 percent.
BoC said the capital injection will help it restructure more quickly, withstand upcoming EU bank stress tests and help stimulate a recovery of the recession-hit Cyprus economy.
CEO John Hourican said in a statement it is the biggest ever single foreign direct investment into Cyprus and “ensures that Bank of Cyprus becomes one of the best capitalised banks in Europe”.
“It also enables us to accelerate the implementation of the bank’s restructuring plan. We remain committed to supporting the Cypriot economic recovery, serving our customers and delivering value for our shareholders,” he added.
Cyprus agreed in March 2013 to a 10-billion-euro rescue package with the European Commission, European Central Bank and International Monetary Fund to bail out its troubled economy and oversized banking system.
The deal included the closure of the island's second-largest bank, Laiki, and a 47.5 percent "haircut" on deposits above 100,000 euros at BoC – the first eurozone bank forced to impose a bail-in.
Many of those large BoC depositors were Russian and in return they got shares in the lender, with several Russians now represented on the board.

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