articles | 24 December 2017

Astrobank to take over USB Bank

Astrobank is very close to taking over USB Bank, in a move that would contribute to the consolidation of the Cyprus’ fragmented banking system, sources told the Cyprus News Agency (CNA).

The take-over will be concluded whilst it receives the green light by the Central Bank of Cyprus.

Speaking to CNA George Appios, Astrobank’s executive director, refrained from confirming or denying the information, noting that among the bank’s top priorities is to grow its balance sheet, including through acquisitions.

“Growth is a top priority in our strategy, and that could be achieved organically, through acquiring loan packages or even through acquisition of another bank,” Appios told CNA.

Therefore, he said, “growth through acquisitions, is among the bank’s strategy because I believe there is a need for consolidation in our banking system in general.”

He recalled that consolidation in the EU banking sector is among the targets set by the EU Single Supervisory Mechanism, while the consolidation of the Cyprus banking sector is among the targets set by the Central Bank of Cyprus.

Astrobank, a former Greek Piraeus Bank subsidiary, emerged after Lebanese Maurice Sehnaouri, heading a group of international investors, covered the bank’s €40 million capital raise in December 2016. Sehnaoui’s Holding M. Sehnaoui Sal. is Astrobanks largest share-hodler with 17.71% followed by Piraeus Bank with 17.64%.

Furthermore, Sehnaoui is a share-holder and presides the Board of Directors of the Lebanese BLC Bank SAL, who is the majority shareholder of USB Bank. Sehnaoui served as chairman of USB Bank’s Board of Directors until February 2017.

The take-over of USB Bank will create a bigger banking institution achieving economies of scale, in a period marked by low profitability and an increased regulatory and compliance burden which especially affects small banks.

The two banks have 13 branches in Cyprus each.

According to the 2016 annual report, Astrobank’s total assets amounted to €1.2 billion, with loans amounting to €556 million. The bank’s customer deposits stood at €1.07 billion.

According to its 2016 annual report USB Bank had total assets amounting to €687 million while loans amounted to €325 million. Customer deposits stood at €603 million.

Source: Cyprus Mail

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