The Co-operative Cyprus Bank on Monday accepted the Hellenic Bank’s bid, ending months of negotiations and paving the way for the creation of Cyprus’ second biggest bank.
The go-ahead was given by CCB shareholders at an EGM late on Monday afternoon. The CCB is effectively state owned.
In a written statement, issued after the conclusion of the EGM, the CCB said its shareholders had decided to approve the bid of Hellenic Bank submitted within the framework of the invitation for expression of interest.
“Completion of the transaction is subject to the necessary supervisory approval,” it added.
Earlier Hellenic Bank submitted a capital plan regarding the extra capital required for the deal to go through — reportedly €150m. This was a condition imposed by the Council of Ministers, which on Friday, gave its in principle approval of Hellenic’s bid. Reports said that the capital plan did not give a breakdown of the shareholders.
Under the deal, Hellenic, currently the island’s third largest bank, will take over the CCB’s liabilities (deposits) of €9.7 billion and assets of €10.3 billion, including loans, bonds and cash as well as NPLs of €500 million. Hellenic will absorb 1100 of the CCB’s 2650 staff and keep 72 of the 170 branches. Assets of the CCB of €8.3b will be signed over to the state while the CCB’s NPLs will be transferred to an asset management agency that will be set up
The deal is subject to the approval of the European Commission. Both the government and the CCB have defended the agreement as an essential step that will put an end to uncertainty and bolster the island’s banking sector.
But opposition parties have stepped up their criticism accusing both the government and the CCB of a sell-out and mismanagement.
AKEL has said it will ask the attorney general to conduct an investigation.