Citing unnamed senior sources at BoC, the Cyprus News Agency said the lender will also create a real estate fund that will administer the lender’s 250 properties in Greece. The BoC brass also voiced optimism that people will be surprised in the first quarter of 2014 by the bank’s new structure. With the creation of Bank of Cyprus Holdings, the stricken lender will tackle the concentration observed in certain sectors of the economy, especially that of real estate. The lender said the process of cutting staff is moving ahead while it was planning to close 30 branches by the end of July.
BoC is also close to selecting a consultant to oversee its restructuring. The executives said its UK subsidiary was not up for sale, unlike its holdings in Russia and Ukraine, which BoC cannot afford to maintain. To prevent financial collapse and be eligible for aid, Cyprus was forced to close down Laiki Bank – its second biggest — and convert sizeable deposits in BoC into equity tohelp recapitalise that bank.
As part of the aid package, Laiki and BoC were also forced to sell their Greek branches, while deposits the banks had in that country were exempt from the bail-in, to avoid contagion to Greece. BoC, which is assuming some of Laiki’s assets, was also forced to assume Laiki’s emergency liquidity assistance (ELA) liability, a funding lifeline provided from the European Central Bank.
Source: Cyprus Mail