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LEGAL UPDATES
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Bank of Cyprus: Recapitalisation and exit from resolution
02.08.2013
Area(s) of Practice: Banking and Secured Financing
 The recapitalisation ensures that the BoC well exceeds its minimum capital adequacy ratio. Based on the latest financial information, BoC's Common Equity Tier 1 ratio is  estimated to stand at around 12%.  
 The Central Bank of Cyprus, in its capacity as the Resolution Authority, will notify the BoC today that it is no longer in resolution as of today’s date and that the duties of the  Board of Directors are henceforth exercised by the transitional Board of Directors until the bank holds its Annual General Meeting.
 Following the recapitalisation, 12% of deposits that were previously blocked will be released (5% in total).
 The balance will be split evenly into three separate time deposits of six, nine and twelve months, respectively. BoC will have the option to renew the time deposits once for the  same time duration. These deposits will receive a rate of interest which will be higher than the corresponding market rates offered by the BoC.
 The share structure of BoC will be amended so that all shareholders hold ordinary shares. The new structure will be compliant with the European Capital Requirements   Regulation. 
 Legacy Laiki depositors will be compensated through shares in BoC, amounting to around 18% of share capital in the combined group.
 The recapitalisation of BoC and its exit from resolution are key milestones in the rejuvenation of BoC’s financial standing which will underpin its resilience and ability to   support the Cyprus economy and thus assist in stabilizing the financial sector in Cyprus.
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