The Bank of Cyprus said on Monday it has completed the sale and transfer of its UK loan portfolio of mainly residential and commercial real estate-backed facilities worth EUR 325 mln, to Mars Capital Finance, which is a mortgage lender and administrator regulated by the Financial Conduct Authority of the UK, and to Camael Mortgages.
“This will enhance the Group’s liquidity and will have a small positive impact on the Group’s Common Equity Tier 1 capital due to the release of risk weighted assets,” the bank said in an announcement, but did not disclose the value of the deal.
It added that the sale of the loan portfolio is in line with the Group’s restructuring plan and part of the strategy to deleverage through the disposal of non-core operations and focus on core businesses while, at the same time, strengthen its capital and liquidity position.”
The bank announced in mid-September that it had agreed to sell its ex-Laiki portfolio, known as ‘Project Avenue’ and worth £289 mln (EUR 361 mln) to Mars Capital Finance and to Camael Mortgages.
An additional £261 mln (EUR 325 mln) of gross loans have been deleveraged at par value since March 2013, through redemptions or refinancing from third parties.
HSBC acted as financial adviser to the disposal of the loan portfolio.
In August, Bank of Cyprus concluded a deal to sell a real estate package in Romania, saying it would enhance its liquidity by EUR 95 mln.
The bank said it was selling the assets related to Societatea Companiilor Hoteliere Grand S.R.L. (“GHES”), owner of the JW Marriott Bucharest Grand Hotel property to Strabag SE, an Austrian company.
It added that the accounting loss from the transaction would be around EUR 1 mln, but there is a positive impact of EUR 7 mln on the Group’s capital position, after taking into account the reduction in risk weighted assets.
The bank has been disposing of non-core assets, including banking operations in the Ukraine, other assets held by now-defunct Popular Laiki and is considering selling its 80% Russia affiliate, Uniastrum.
Merging of the Bank of Cyprus and ex-Laiki operations has also saved the group some EUR 5 mln in annual rents, while other dormant properties in Cyprus, Greece and the UK are up for sale.
The Group’s jewel insurance businesses, EuroLife and General Insurance Co., will probably stay, as buyers are sought for the CNP Assurance business, 51% controlled by the French Insurance giant that also wants to dispose of its loss-making Cyprus operations.
