Cyprus Business Now

The CFA Society Cyprus, a local chapter of the CFA Institute, on Thursday, presented its priorities regarding developments in the Cypriot economy and its key action pillars through strategic partnerships and collaborations in a meeting held at the Presidential Palace.

According to an announcement, the meeting took place in a highly constructive atmosphere and was attended by CFA Society Cyprus President Alkis Hadzitophis, Vice President Zenon Papafilippou, and member Constantinos Kourouyiannis, representing the CFA Society Cyprus Board of Directors.

On behalf of the government, Deputy Minister to the President Irene Piki and the Economic Advisor to the President Chris Patsalides were present.

At the centre of the meeting was the urgent issue of the Pan-European Personal Pension Product (PEPP) in the Cypriot market, with a focus on the initiatives and actions undertaken by the CFA Society Cyprus to promote it as a supplementary retirement provision.

Significant discussions were also held on developments in the field of green transition and ESG (Environmental, Social, and Governance).

Moreover, the members of the CFA Cyprus Board of Directors analysed the important efforts of the CFA Institute in educating investors and other economic entities.

In addition, CFA Cyprus expressed its willingness to leverage its high level of knowledge and training in ESG matters by providing advisory support to the government in this specific area.

Furthermore, as a member of the global CFA community and in collaboration with the CFA Institute office in Brussels, CFA Society Cyprus highlighted its readiness to provide all possible assistance and expertise concerning the harmonisation of Cyprus with the required investment obligations at the European level.

Lastly, CFA Cyprus provided an update on its initiatives to combat financial illiteracy through special seminars in secondary schools.

It should be noted that CFA Society Cyprus is the local chapter of the CFA Institute, headquartered in Virginia, USA, with over 190,000 members worldwide.

Its primary goal is to promote the value of financial advice in matters related to proper financial planning at both corporate and individual levels. It also provides expertise aimed at improving the functioning of regulatory authorities and the government.

The Bank of Cyprus announced this week that it has received offers totalling €204 million from current holders of Additional Tier 1 Capital Category 1 (AT1) bonds. These offers are part of a bond exchange program initiated by the bank, where existing AT1 bonds worth €220 million will be replaced with a new bond.

Last week, the Bank of Cyprus extended an invitation to holders of the existing AT1 bonds, which have an early redemption date set for December 2023.

The invitation encouraged bondholders to submit their bonds for repurchase at a price equivalent to 103 per cent of their nominal value.

Additionally, the bank offered to pay accrued interest on the bonds, up until the settlement date of June 21, 2023.

“The company received valid offers for a total nominal amount of approximately €204 million, or approximately 93 per cent of the Existing Capital Bonds, which were accepted,” the bank stated in its announcement.

It further noted that existing bonds with a total nominal value of approximately €16 million will remain outstanding.

“As a result, the company will recognise a cost of approximately €7 million in its second-quarter 2023 capital, while the corresponding obligation to pay future coupons for the respective bonds is terminated,” it stated.

“The successful completion of the offer, along with the expected issuance on June 21, 2023, of the Fixed Rate Reset Perpetual Additional Tier 1 Capital Securities (ISIN: XS2638438510) (the ‘New Capital Bonds’) in the amount of €220 million, indicates the active management of the capital base of the Group, with the refinancing of Existing Capital Bonds at a lower interest rate, maintaining the optimal capital structure of the Group,” the bank added.

According to the announcement, the issuance of the New Capital Bonds will continue to contribute to the Group’s Total Capital Adequacy Ratio of approximately 220 basis points.

The issuance is expected to be eligible for the Minimum Requirement for Own Funds and Eligible Liabilities (MREL).

“Moreover, the issuance of the New Capital Bonds will reflect a significant improvement in the company’s credit margin of approximately 350 basis points compared to the credit margin of the Existing Capital Bonds, reflecting the successful transition of the Group to a well-capitalised, diversified, and sustainably profitable banking and financial institution,” the announcement concluded.

The Cyprus Stock Exchange (CSE) ended Thursday, June 22 with losses.

The general Cyprus Stock Market Index was at 118.24 points at 13:40 during the day, reflecting a decrease of 0.03 per cent over the previous day of trading.

The FTSE / CySE 20 Index was at 71.54 points, remaining unchanged from the previous day.

The total value of transactions came up to €212,087.

In terms of the sub-indexes, the main, alternative and investment firm indexes rose by 0.08 per cent, 0.64 per cent, and 1.79 per cent respectively. The hotel index fell by 0.94 per cent.

The biggest investment interest was attracted by the Bank of Cyprus (-2.91 per cent), Hellenic Bank (+0.52 per cent), Logicom Public (+3.67 per cent), Demetra Holdings (+1.89 per cent), and KEO PLC (+2.7 per cent).