€1 billion share capital increase in Bank of Cyprus

€1 billion share capital increase in Bank of Cyprus

 

By Kyriacos Kyriacou – Nicosia

Last year, bank of Cyprus, the island`s largest lender  was recapitalised with depositor money, as part of the €10 billion bailout Cyprus received from the EU/IMF, under which 47.5 per cent of deposits over €100,000 was converted to shares.  Efforts to safe the bank continue until today, when the Extraordinary General Meeting (EGM) of the shareholders of Bank of Cyprus approved by a majority vote the increase through the placing and the open offer of the share capital by € 1 billion.

The EGM was attended by 1.496 shareholders, either in person or by proxy, who represented 1.950.622.863 shares, that is 41,016% of the total issued share capital. The shareholders approved all four resolutions put forward by the Board of the Bank with percentages 87% in favor and 13% against.

The resolutions include the Retail Offer of new ordinary shares of the Bank at a subscription price of €0,24 per share for raising of up to €100 million and the lifting of the age limit of 74 years for Board Directors. The closing of the placing and open offer remains subject to the approval of the reduction of the nominal value of the ordinary shares of the Bank by the District Court of Nicosia and the filing of this court approval with the Department of the Registrar of Companies and Official Receiver.

“Extremely positive”

Chairman of Board of Directors of Bank of Cyprus Group Christis Hassapis, said that the approval of the share capital increase by the shareholders, was an extremely positive event for the Bank and also for the stability of the broader banking system of Cyprus. “It comes at an opportune time when conditions in international debt markets are still favourable and ahead of regulatory stress tests. The capital increase will strengthen the bank and allow it to continue with the restructuring of its balance sheet, the deleveraging of its loan book and the repositioning of its operations with a primary focus on the domestic economy,” he said.

The CEO of Bank of Cyprus Group John Hourican, added that this significant new investment, which is the biggest single foreign direct investment into Cyprus, ensures that Bank of Cyprus becomes one of the best capitalised banks in Europe.

Deposits and loans decrease 

Meantime, it was announced today that total deposits in Cyprus banks in July 2014 exhibited a net decrease of €153,3 million, as compared with a net decrease of €370,3 million in June 2014, according to data released Thursday by the Central Bank of Cyprus (CBC). The annual growth rate stood at -4,6% as compared with -5,7% in June 2014. The outstanding amount of deposits reached €46,6 billion in July 2014. Total loans in July 2014 exhibited a net decrease of €435,0 million, as compared with a net increase of €438,7 million in June 2014. The annual growth rate stood at -7,3% as compared with -8,4% in June 2014. The outstanding amount of loans reached €61,1 billion in July 2014.