A solution to the Cyprus problem, by way of the talks being held under UN auspices in Geneva this week, could pave the way for “even greater” investment opportunities, Finance Minister Harris Georghiades said after a meeting with the new shareholders of Piraeus Bank Cyprus.
The Minister said in comments after a meeting with the delegation headed by Lebanese investor Maurice Sehnaoui that the prospects of a solution and what this could mean for the economy were discussed.
“It was also their observation that a solution to the Cyprus problem would offer even more significant opportunities. But at the same time, their decision to realise this important investment was not based and did not predetermine a solution of the Cyprus problem.,” Georghiades said.
“We have noted a number of very important opportunities that we should preserve and enhance,” he said, conveying the government’s commitment to ensure a stable, safe and attractive economic environment that will allow the safeguarding and utilisation of investment opportunities.
Responding, Sehnaoui said his team considers the investment opportunities in Cyprus in the current period as being “very big, especially after the economic crisis [of 2013] out of which Cyprus exited even stronger.”
“The ability of the Cyprus economy to overcome the problems is amazing,” he said, adding that the tourism sector, financial activities and investments continue to be in a positive trend, contributing to the recovery of the economy, despite the initial forecasts of its collapse.
Sehnaoui concluded that “there are many investment possibilities in Cyprus” and that better days lie ahead for the economy.
“Contributing factors include the exploitation of the natural wealth of the country and the strong ties it enjoys as a European Union member state with other countries that want Cyprus to become an intermediate platform.”
Sehnaoui, who has a controlling stake in Cyprus-based USB Bank through parent company BLC Bank SAL, and other investors acquired a majority stake in Piraeus Bank Cyprus in a deal that involved a EUR 40 mln capital increase.
The Greek parent Piraeus Bank did not partake in the capital increase and has now reduced its stake in the Cyprus subsidiary to 17.7%.
The deal, initially announced last July, is part of the Greek bank’s efforts to deleverage its overseas assets, but it will maintain a holding in the Cyprus bank that employs 310 staff in 19 branches and boasts a healthy balance sheet. It has EUR 600 mln in loans and 1 bln in deposits, while the cash injection will improve its capital liquidity ratio to 15%.
Piraeus, which acquired the Greek assets of the three Cypriot banks (Bank of Cyprus, Marfin Laiki Popular and Hellenic Bank) for a mere EUR 500 mln when the bailout agreement was imposed by the Eurogroup of Eurozone members in 2013, had recently sold its Egyptian subsidiary, which was managed by the bank’s Cyprus Chairman Constantinos Loizides.
