€20 million for 5.4 per cent stake in Cypriot financial institution
LONDON, 1-10-2015 — /EuropaWire/ — The European Bank for Reconstruction and Development (EBRD) has entered into an agreement to acquire an equity stake in Hellenic Bank Public Company Ltd (Hellenic Bank), the second largest commercial bank inCyprus, investing €20 million in newly-issued shares. The EBRD will hold 5.4 per cent of the bank’s share capital and voting rights.
Hellenic Bank is a systemically important bank and its growth will contribute to the country’s economic recovery.
Hellenic Bank is privately-owned and listed on the Cyprus Stock Exchange. During the 2013/14 financial crisis Hellenic Bank remained without government support, depositors’ bail-in or European Central Bank funding. However, the Cypriot banking sector is still suffering from a high level of non-performing loans (NPLs) and a contraction in lending.
Lucyna Stańczak-Wuczyńska, EBRD Director for Financial Institutions and EU Banks, said: “By becoming a shareholder in Hellenic Bank the EBRD is taking a further important step to stabilise the Cypriot banking sector. Our focus will be on NPL restructuring, balance sheet repair and operational efficiencies. Successful NPL management will allow the bank to return to profitability and further develop its business model for the benefit of private and corporate clients.”
Bert Pijls, Chief Executive Officer of Hellenic Bank, said: “I am pleased and honoured to welcome the EBRD as a new shareholder and I am looking forward to expanding our cooperation in other areas of mutual interest. The EBRD’s investment indicates its trust in the prospects of Hellenic Bank while at the same time it is a vote of confidence in the Cypriot economy by a major and very well-respected international institution. The additional capital raised aims to support Hellenic Bank’s growth and contribute to the resolution of non-performing loans.”
The EBRD started investing in Cyprus last year for a temporary period envisaged to last until 2020. The Bank is focusing on investments in the financial sector, supporting privatisations and private concessions and providing finance to projects of individual private companies. The EBRD’s goal is to support the recovery of the country’s economy following a deep financial crisis.
For all media enquiries, email email@example.com