articles | 17 August 2014

Bank of Cyprus ELA drops to €8.68 bln in July 2014

The dependence of Bank of Cyprus on the Emergency Liquidity Assistance (ELA) recorded a further decrease to €8.68 bln in July from €8.78 bln the previous month, according to the Central Bank of Cyprus.

The island’s biggest lender has been struggling to cope with a forced merger with now-defunct Laiki, slashing its workforce and cutting back on overseas operations, and the sale of assets to reduce its debt. 

A recent capital increase of €1 billion by the bank was supported by the European Bank of Reconstruction and Development (EBRD) to the tune of €120 million and American financier Wilbur Ross who has grouped investors for an amount of €400 million. 
In May, ELA amounted to €9.23 billion whereas in April it was €9.40 billion. 

Furthermore, the dependence of the Cypriot banking system on monetary policy instruments (Eurosystem) recorded a decrease of €550 million in July, falling to €850 million from €1.40 billion the previous month. 

The significant reduction in banking system funding from the ECB is mainly due to the fact that the government repaid on July 1 an amount of €950 million out of €1.98 billion of a sovereign bond held by the Bank of Cyprus, thus enabling the bank to repay part of its dependence both on ELA and the Eurosystem.

Source: Financial Mirror

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