Bank of Cyprus to open Moscow branch end July

…EUR 300 mln loans in pipeline

 

Bank of Cyprus Group Pcl (BOCY) will open its first branch in Moscow by end of July 2007, thus becoming the first banking group from the Hellenic world to set up fully fledged operations in Russia.

BOC Group CEO Andreas Eliades told reporters during the presentation of the first half results, where the bank exceeded market expectations and delivered yet another record 58% YoY growth in profit to EUR 230 mln that the official opening of the Russia operations will be made in October, but fully fledged operations are starting from now.

Last week Bank of Cyprus officially launched its full operation in Bucharest, Romania with confirmed loan portfolio of EUR 82 mln, while the leasing operations in Romania had commenced four months earlier.

“We have more than EUR 300 mln loans in the pipeline,” said Eliades, adding that the Bank has aggressive plans to penetrate the booming and highly lucrative Russian and Romanian markets.

Bank of Cyprus Deputy Group CEO and Cyprus CEO Charilaos Stavrakis meanwhile said that the Group is currently assessing 3-4 options in the Ukraine and in the next few months will announce an acquisition there.

“By the end of 2007, we shall have a presence in all three markets and by early 2008 we shall announce specific growth targets for the next three years,” said Eliades.

Bank of Cyprus has a target that by 2011 about 70% of its loan portfolio will be out of Cyprus.

 

Bullish forecast

Eliades would not be drawn to discuss the full year profit forecast, but he admitted that foreign analysts were justified to issue higher forecasts above the Management’s full year target of EUR 415 mln profits.

“I don’t wish to discuss targets for the full year now, but we shall do so after the summer break,” said Eliades.

The majority of analysts polled by the Financial Mirror expect the Bank of Cyprus to deliver EUR 465 mln and up profit for 2007. Based on the most recent price of EUR 13.20 on the Cyprus Stock Exchange, the Bank’s forward p/e ratio comes to 16.5 times.

 

Shareholder support

Bank of Cyprus Management continues to enjoy the steady and unreserved support of the Bank’s more than 70.000 shareholders. At the most recent AGM, the Bank received more than 60% support for its decision to insist on remaining independent and pursuing a balanced growth strategy abroad.

BOC Group Chief General Manager Yiannis Kypri revealed that 26.5% of the Bank’s capital is currently held by foreign institutional investors, up from 3% two years ago, while another 2% of the Bank’s capital is held by Greek institutional investors. This is in addition to the 8% stake held by the Marfin Popular Bank in the share capital of Bank of Cyprus.

Eliades would not comment on recent sales by MPB, adding that “our job is to deliver profits and ensure a healthy and sustainable growth of our operations. As to who is buying and selling our shares or where the prices is heading, that is not for us to comment.”