BOCY concludes Uniastrum sale in Russia
Bank of Cyprus announced that it has completed the sale of the majority of its Russian operations through the subsidiary BOC Russia (Holdings) Ltd., comprising its holdings of 80% in CB Uniastrum Bank LLC, and 80% in its leasing subsidiary, Leasing Co. Uniastrum Leasing LLC, as well as other Russian loan exposures, to Artem Avetisyan, the majority shareholder in Bank Regional Credit.
As already stated in the Group’s announcement in July, the decision to sell the Russian operations is part of the Group’s strategy to focus on core businesses and markets and disposing of operations that are considered as non-core. With the disposal of this major overseas banking subsidiary, the Group has reached another milestone in its deleveraging and de-risking strategy, and has eliminated future potential risks relating to its Russian banking operations, including any liquidity risks.
The Group concluded its negotiations with Avetisyan, as a result of which certain revisions to the agreement reached on July 17 were made. This sale allows the Group to derisk its balance sheet by EUR 600 mln and allows the release of risk weighted assets of EUR 550 mln. The sale improves the Group’s regulatory capital position, with a positive impact of 30 basis points on the Common Equity Tier 1 capital ratio. The transaction results in an accounting loss of EUR 23 mln, comprising a loss of 28 mln caused by the technical unwinding of a foreign currency translation reserve and a profit of 5 mln against the net book value of the assets.
The remaining net exposure (on and off balance sheet) of the Group in Russia is EUR 155 mln, comprising 135 mln on-balance sheet and 20 mln offbalance sheet exposures. This compares to EUR 148 mln, comprising 114 mln on-balance sheet and 34 mln offbalance sheet exposures as per the announcement on July 17, and is expected to be reduced over time. As a result the remaining exposure includes 42 mln arising from the deferred component of an asset swap arrangement.