New Bank of Cyprus shareholders, uninsured depositors of over €100,000 47.5% of whose capital was used for a bail – in, hold 81% of the bank’s share capital, while former Laiki Bank owns 18% and former share holders make up less than 1%.
According to a Bank of Cyprus press release, issued here today, the interim Board of Directors will be holding an Annual General Meeting of shareholders at the first half of September 2013.
The Bank announces that “its recapitalisation process through a bail-in of depositors (a deposit-to-equity conversion) has been completed and that as of 30 July 2013 the Bank is no longer under resolution”.
On 30 July 2013, it is added, “the Central Bank of Cyprus, in its capacity as Resolution Authority, has issued a decision in accordance with the provisions of the Bailing-in of Bank of Cyprus Public Company Limited Decree of 2013 (as amended) (the “Decree”) whereby an additional 10% of the bailed-in eligible deposits has been converted to equity, which raises the total percentage of eligible deposits converted to equity to 47.5%”.
The holders of ordinary shares and debt securities as of 29 March 2013 issued by the Bank have contributed to the recapitalisation of the Bank through the absorption of losses in accordance with the Decree and pursuant to the relevant provisions of the Resolution of Credit and Other Institutions Law, 2013, the press release continues.
Furthermore, it notes that “the Central Bank of Cyprus has issued the Bank of Cyprus Share Capital Issue for Compensation of Cyprus Popular Bank Ltd Decree of 2013 whereby the Bank has issued equity to Cyprus Popular Bank Public Co Ltd (Laiki Bank) for the acquisition of certain assets and liabilities, including insured deposits, pursuant to the Sale of Certain Operations of Cyprus Popular Bank Public Co Ltd Decrees of 2013”.
Based on the estimates of the Central Bank of Cyprus and following the bail-in of depositors and the issuance of equity to legacy Laiki Bank, the Bank is adequately capitalized, the press release says.
Furthermore, former Laiki Bank “is the only shareholder owning more than 5% of the Bank’s share capital, with a holding of around 18% of the bank’s share capital”.
“Bailed-in depositors hold around 81% of the Bank’s share capital, while the outstanding ordinary shares as of 29 March 2013 and the ordinary shares arising from the conversion of outstanding debt securities as of 29 March 2013 now account for less than 1% of the share capital of the bank”.
It points out that “the recapitalisation and the ongoing restructuring of the Bank will result in a well-capitalised and resilient bank, able to serve the needs of its customers and support the Cyprus economy”.
“With the absorption of the Cypriot operations of Laiki Bank, the Bank cements its position as the leading financial institution in Cyprus”, the press release continues, concluding that “the above developments mark a new era for the Bank of Cyprus”.
As part of a €10 billion rescue package for Cyprus, Bank of Cyprus, the island`s largest lender, entered a resolution process, with an initial 60% of deposits over €100,000 blocked for capital to equity conversion to recapitalize the bank.
However, the final figure was reduced at 47.5% following the completion of an independent evaluation of the Bank`s balance sheet, after it absorbed the "good part" of Laiki Bank which will be wound down.
