On June 21, Hellenic Bank and the Cyprus Cooperative Bank signed an agreement on the transfer of the latter's operating activities to Hellenic, which essentially consolidates the sale of the "good" part of the Co-op - the largest in the history of the banking sector in Cyprus after the merger of Laiki with the Bank of Cyprus in 26.
In Hellenic from Koop, deposits for a total of 9,7 billion euros, serviced loans totaling 4,6 billion, cash in the amount of 1,6 billion and government bonds amounting to 4,1 billion pass. For the acquisition of all these assets, the bank offered to pay 74 million euros.
As a result of the transaction, the 6,7-billion balance of Hellenic will almost triple: the balance of the Cooperative Bank six months ago amounted to 13,5 billion euros. For comparison, the balance of the Bank of Cyprus at the end of the first quarter of this year reached 23,4 billion euros. In addition, Hellenic will concentrate 22% of all serviced debts in Cyprus and 31% of all deposits. The share of Hellenic's non-performing debt will decrease to less than 20% (now - 52,1%) in the next three to five years.
After the transfer of a part of the Co-op to the Hellenic Bank, the remaining part of the activity (mostly non-performing loans) will be transferred to the state administration.
It is reported that Hellenic will attract necessary funds of not less than 150 million euros by selling additional shares of BRAVO Strategies III (owned by the US investment company PIMCO) and one of Hellenic's major shareholders in the Cypriot investment fund Demetra Investment.
Note that the final completion of the transaction depends on a number of factors.
The parties must obtain the approval of European supervisory authorities and shareholders of Hellenic Bank. In addition, 29 June, the Parliament of Cyprus must vote on a number of laws related to the sale of Koop.