Bank of Cyprus ELA drops to 8.68 bln in July

Financial Mirror (Cyprus) - - FRONT PAGE -

The de­pen­dence of the bailed-in Bank of Cyprus (BOCY) on the Emer­gency Liq­uid­ity As­sis­tance (ELA) recorded a fur­ther de­crease to 8.68 bln eu­ros in July from 8.78 bln the pre­vi­ous month, con­tin­u­ing a down­ward trend recorded in re­cent months, ac­cord­ing to fig­ures re­leased by the Cen­tral Bank of Cyprus.

The is­land’s big­gest lender has been strug­gling to cope with a forced merger with now-de­funct Laiki Pop­u­lar, slash­ing its work­force and cut­ting back on over­seas op­er­a­tions, and the sale of as­sets to re­duce its debt.

A re­cent cap­i­tal in­crease of 1 bln eu­ros by the bank was sup­ported by the Euroer­pan Bank of Re­con­struc­tion and Devel­op­ment (EBRD) to the tune of 120 mln and Amer­i­can fi­nancier Wil­bur Ross who has grouped in­vestors for an amount of 400 mln eu­ros.

In May, ELA amounted to 9.23 eu­ros whereas in April it was 9.40 eu­ros.

Fur­ther­more, the de­pen­dence of the Cypriot bank­ing sys­tem on mon­e­tary pol­icy in­stru­ments (Eurosys­tem) recorded a de­crease of 550 mln eu­ros in July, fall­ing to 850 mln from 1.40 bln eu­ros the pre­vi­ous month.

The sig­nif­i­cant re­duc­tion in bank­ing sys­tem fund­ing from the ECB is mainly due to the fact that the gov­ern­ment re­paid on July 1 an amount of 950 mln eu­ros out of 1.98 bln eu­ros of a sov­er­eign bond held by the Bank of Cyprus, thus en­abling the bank to re­pay part of its de­pen­dence both on ELA and the Eurosys­tem.

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