Bank of Cyprus sells Ukrainian subsidiary
Bank of Cyprus, the island’s largest lender, yesterday announced the sale of its loss-making PJSC Ukrainian subsidiary to Russia’s Alpha Group, as part of a restructuring drive. It said an agreement was reached with ABH Ukraine, part of the Alpha Group, to sell its holding of 99.77 percent for 225 million euros. The sale is subject to approval from regulatory authorities in Cyprus and Ukraine. “The proceeds of the sale will enhance the bank’s liquidity position,” said Bank of Cyprus. BoC said the accounting loss from the sale was approximately 158 million euros, representing the difference of the consideration received and the net book value of the business. It said the deal was a “good transaction in order to deleverage and de-risk its balance sheet.” The sale would also “eliminate future potential risks relating to its Ukrainian investment, particularly given the political and economic environment prevailing currently in Ukraine.” PJSC Bank of Cyprus was acquired by BoC in 2008. It operates a network of 42 branches, focusing both on individuals and businesses in Ukraine. As of September 30, 2013, the bank had total assets and equity of around 245 million euros and 70 million respectively. BoC this week released 950 million euros in six-month certificates of deposit it had locked in following the haircut. The CDs were due to mature yesterday.
Destination award.
Costa Navarino, a resort on the southwestern tip of the Peloponnese, has been shortlisted for the Tourism for Tomorrow Awards of the World Travel & Tourism Council in the “Destination” category.
Romania-eurozone.
Romania will spend four or five years improving its economic competitiveness before joining the eurozone, even though it is set to qualify for euro entry this year, President Traian Basescu said in Berlin yesterday. “We will undoubtedly fulfill all of the Maastricht criteria this year,” Bases- cu said, referring to the conditions – such as on debt and inflation – that European Union member states must meet before adopting the currency. But he said Romania would first focus on privatization to change the profile of its economy, now 45 percent public sector.
Lira troubles.
Turkish households and firms are hoarding dollars, suggesting they have little faith the lira will be spared a further emerging markets sell-off despite a massive rate hike this week. It is adding to pressure on Prime Minister Recep Tayyip Erdogan as elections near. The central bank raised interest rates by around 500 basis points at an emergency meeting on Tuesday despite Erdogan’s vocal opposition, stunning markets and causing a spike in the battered currency. But the lira has since erased much of those gains, returning to where it was just before the rate hike. It is still some way from Monday’s record low of 2.39, however, trading at 2.2735 to the dollar.