The nominal value of the Loan Portfolio, as at the cut-off date for this transaction, was €361 million (£289 million), BoC said.

The sale and transfer of the portfolio is expected to be completed by October 31.

The transaction will enhance the group’s liquidity and will have a small positive impact on Common Equity Tier 1 capital due to the release of risk weighted assets, the lender said.

The loan portfolio is not related to the group’s wholly owned subsidiary, Bank of Cyprus UK Ltd, but is part of the wider UK loan portfolio transferred to the group following the acquisition of certain operations of Laiki Bank in March 2013.

The sale is in line with the bank’s restructuring plan and part of the strategy of deleveraging through the disposal of non-core operations and of focusing on core businesses and strengthening its capital and liquidity position.

The transaction complements the on going deleverage of UK loans from the wider UK portfolio transferred from Laiki.

An additional €325 million (£261million) of gross loans have been deleveraged at par value since March 2013, through redemptions or refinancing from third parties.

BoC had to absorb part of the now defunct Laiki after it was decided to shut it down as part of the terms of the island’s €10 billion bailout.

Source: Cyprus Mail