As a result, ELA has been reduced to €5.9 billion from its €11.4 billion peak in April 2013, and ECB funding has been cut by €1.5 billion to €500mn since the start off the year.
The payments followed an early government repayment of €750 million of a bond held by Bank of Cyprus.
The bond was the recapitalization bond of Laiki Bank that was transferred to Bank of Cyprus in March 2013 following the acquisition of certain assets and liabilities of Laiki Bank. It was pledged as collateral with the ECB.
The Ministry of Finance repaid the bond on June 9, 2015, leading to an accounting profit of about €33 million. The bank’s net interest income will be impaired by the early repayment of the bond because of the upfront recognition of the accounting gain.
The remaining €340 million of the bond will be replaced on its maturity on July 1, 2015 by a new bond for the same nominal amount, with pricing based on the Cyprus government yields prevailing at the time.