Bank of Cyprus ELA drops to 8.68 bln in July

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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.