BOC: Pre-emptive capital raise covers capital shortfall

The pre-emptive €1 billion capital raise ensured that the Bank of Cyprus absorbed the capital shortfall that emerged from the ECB comprehensive assessment carried out by the European Central Bank, the Bank of Cyprus has said in a press release.

Stress test revealed a capital shortfall amounting to €919 million in the adverse scenario. The gap was covered by the €1 billion capital raise resulting in an overall surplus of €81 million.

“The positive result of the Comprehensive Assessment reaffirms the solid capital position of the Bank, even under the most extreme, severe theoretical stress conditions. It also reflects the pro- activeness of the Group in raising adequate capital in advance of the Comprehensive Assessment,” BoC Board of Directors Chairman Cristis Hassapis said in a statement.

He added that the result “is another milestone for the Bank and will further strengthen the confidence of depositors and other stakeholders towards the Bank.”

“A stronger Bank will be better positioned to support the economic recovery in Cyprus, leading to increased prosperity in the country,” he concluded.

On his part John Patrick Hourican, the Bank`s CEO, said that “the well – timed and deliberate actions taken during 2014, and in particular the pre-emptive €1 bn share capital increase, have ensured a positive result in the ECB’s Comprehensive Assessment.”

“The share capital increase has generated a significant capital buffer, ensuring that the Bank could weather even the adverse stress scenario envisaged by the authorities,” he stressed.