The island’s two biggest banks, the Bank of Cyprus and the Popular Bank, have sent a request to the Cyprus Securities and Exchange Commission asking for more time to announce their preliminary financial results for 2012.
According to CNA sources, the two banks argue that they cannot meet the February 28 deadline for submitting their preliminary financial statements because they have not as yet been informed about the final amount investment management firm Pimco believes is needed for their recapitalization. Consequently, they say, anything announced by the banks might be misleading to investors.
Global investment solutions provider PIMCO has been assigned with the due diligence (accounting and economic value assessment) that would determine the capital needs of the Cypriot banking system at the request of the Troika (European Commission, European Central Bank and the International Monetary Fund) as part of Cyprus` application for financial assistance from the EU bailout mechanism.
The Steering Committee received on Feb 2 Pimco`s final report, the Central Bank of Cyprus had said, adding the Committee will draw up a plan which will determine the capital needs of the banking sector. The results will be made public with the signing of the Memorandum of Understanding between the Republic of Cyprus and its international creditors.
Being public companies listed on the Cyprus Stock Exchange (CSE), banks are compelled, by law, to submit to CSE their preliminary financial statements for 2012 by February 28.
The legislation, which is based on the European Directive on transparency and market manipulation, does not provide for any exemption or extension of time to a public company for submitting its preliminary financial results beyond regular time.
In case the two banks do not abide by the law they will have to pay a fine of up to a few thousand euro, depending on the delay in submitting the financial statements and the size of the company.
An extension of time to the two banks can only be granted with the issuance of a relevant decree issued by the Minister of Finance.
So far, only the Hellenic Bank has announced a meeting of its Board of Directors on February 28 to examine its preliminary results for 2012.
On June 25, Cyprus applied for financial assistance in a bid to rescue its banks severely hit by the Greek sovereign debt haircut and to secure the government’s fiscal needs.
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