Cyprus Mail

No decision yet on capital increase: BoC

No decision has been taken by the board to raise the lender’s share capital, the Bank of Cyprus (BoC) said on Thursday, responding to media reports.

In a stock market announcement, the bank, which recapitalised by seizing part of clients’ deposits last year, said it has appointed external advisors to help to help it assess the strategic options available to the group.

“The advisors will assess, among others, the progress of implementing the restructuring plan, analyse the funding and capital structure of the group, identify options that could accelerate the implementation of the restructuring plan in tandem with the further strengthening of the group, including a possible capital increase, and provide recommendations to the board.”

“The bank will issue an announcement when and if a relevant decision is taken by its board of directors,” the statement said.

BoC issued a similar statement on Wednesday regarding its Russian branch.

It followed an interview with the Financial Times of CEO John Hourican who said he would “seek a new owner” for Uniastrum Bank.

“Bank of Cyprus has no role being a retail bank in Russia as it doesn’t really help us at our main Cyprus bank – it is a different brand and has a very different clientele,” Hourican said.

The bank said no formal decision has been taken to sell Uniastrum and the group was taking “various actions to improve the company’s performance. This remains its core strategy today.”

The statement came to reinforce some observers’ view about a rift between Hourican and the board, a suggestion previously denied by BoC chairman Christis Hassapis.

“The timing of any exit, by the group, from its Russian operations will be determined at a future date by the board of directors, after considering options that would enhance value for the group’s shareholders,” the statement said.

In the second quarter of the year, BoC disposed of its Ukrainian operations, an investment in Romania and loans in Serbia, reducing its risk profile and improving its core equity by a further 0.3 percentage points.

The lender reported its first profit in seven quarters last Friday, saying it was on track on deleveraging and improving the quality of its loan portfolio.

First-quarter profit after tax was €31 million after a €103 million loss in the last quarter of 2013.

Profit after tax and before restructuring costs and discontinued operations came in at €72 million compared with a €38 million loss in the last quarter of last year.

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