Local
articles | 20 April 2014

BoC winds up Ukrainian operations

Bank of Cyprus has completed the sale of its Ukrainian business and stake in Banca Transilvania ahead of schedule.

In an announcement, the bank said the sale of the Ukrainian business enhances the Group’s liquidity position and shields it from further uncertainty in Ukraine.

The sale of the Ukrainian business was achieved at a cost of 0.3 percentage points of core tier 1 capital ratio and represents real economic risk reduction at an acceptable price

The sale of shares in Banca Transilvania, it said, enhances the Bank’s core tier 1 capital ratio by 0.2 percentage points and provides an immediate improvement in liquidity of €82 millioin.

“The combined impact of both transactions is to immediately improvethe Group’s liquidity by approximately €185 million at a net impact on core tier 1 capital ratio of 0.1 percentage points,” the bank said.

“In closing these transactions ahead of plan the Group has demonstrated significant and tangible progress in its strategy of de-risking and de-leveraging the Group’s operations.”

The sale of the Bank’s loss-making operations in Ukraine to Alfa Group for €202.5 million was revised downwards by 10% from the original amount, BoC said, with an accounting loss of approximately €153 million.

An amount of €102.5 million has already been received by the Bank with the remaining amount of €100 million due to be received in March 2015.

As for BoC’s stake in Romanian Banca Transilvania, the Cypriot lender has sold 220.461.952 shares that represented 9.99% of the total issued share capital of Banca Transilvania. The sale consideration amounts to €82 million, “achieving a realised gain of approximately €47 million.”

In a statement regarding the two transactions, the Group’s CEO, John Patrick Hourican, said: “We are making good progress with the implementation of our restructuring plan and today’s announcement marks an important milestone in our efforts to return Bank of Cyprus to a position of financial strength and stability where it is capable of supporting the recovery of the Cypriot economy.”

“I am pleased that both transactions have been completed at a faster pace than anticipated and in particular that we completed the sale of our Ukrainian business at an acceptable price despite the country’s current uncertain economic and political environment. Overall, the Bank remains on track in the delivery of its broader strategic objectives, supported by a gradual improvement in the economic and operating conditions in Cyprus.”

Source: Cyprus Mail

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