The decision by British voters to leave the EU has led to delays in plans by Bank of Cyprus (BoC) to list on the London Stock Exchange (LSE), according to press reports.
“As far as I know there will be no surprises… there have been some delays but the listing could still take place before the end of the year,”a BoC official told the press.
The lender officially announced its intention to list on the LSE on March 31 this year.
“A premium listing on the LSE fulfils one of the Bank’s objectives of listing on a major European stock exchange,” the announcement said.
“The listing and, subject to meeting the eligibility criteria, potential inclusion in the FTSE UK Index series will enhance the Group’s visibility and share liquidity.”
At the official level the decision for a premium London listing remains unchanged. However, major shareholders have expressed concern after the Brexit vote and are expected to raise it in the next board meeting.
Investors are particularly concerned about the volatility of sterling and the impact it will have on the prices of shares in terms of euros and dollars.
Chief Executive Officer John Hourican has repeatedly said to the press that the bank is “closely monitoring” developments, while a final decision is expected to be announced after the board meeting due on August 30.
“We will have to wait and see how things will evolve. The issue is not clear yet and will be raised in board meetings,” a member of the board told the Cyprus Weekly.
Uncertainty to continue
Board members will be making decisions largely in the dark, however, as the Brexit process is expected to take years and the UK government’s Brexit plan is not yet known. Almost two months after the UK referendum, there is still no clarity about either the timing of Brexit or the way in which it will be implemented.
Open questions for the financial markets, which will also affect BoC’s considerations, include whether the UK will retain access to the single market, and therefore continue to have access to the ‘EU passport’ for financial services, whether it will only be part of the customs union, which does not include single market access, or whether it will go for the ‘hard Brexit’ option, meaning only membership of the World Trade Organisation (WTO).
Even the Leavehq.com website said in an article about trading relations that “the UK could not survive as a trading nation,” with only WTO membership.
One option if the LSE does not work is Euronext.
In an interview with the Cyprus Weekly in late June, Hourican said: “We want to make sure that Cyprus and the Bank of Cyprus is positioned appropriately and in a large liquid exchange which is appropriate for this bank and the future strategy. The choices on that were always Euronext or theLSE.”