Bank of Cyprus intends to apply to the state for temporary capital support totaling around 500 million euro, a press release issued here Wednesday said.
According to the press release, in light of the deadline of 30 June 2012 set by the European Banking Authority (EBA) for the recapitalisation of banks, Bank of Cyprus Group (Group) took a number of actions to cover its capital needs of 1.560 mn euro as estimated by EBA.
However, although the Group with its actions has covered a significant part of the above amount and it continues its efforts to further strengthen its capital base through the effective management of risk weighted assets and other measures, it expects that it will not fully cover the capital needs estimated by EBA by 30 June 2012.
As a result, the Group has informed the Central Bank of Cyprus and the Ministry of Finance that it will apply to the state for temporary capital support of about 500 mn.euro.
Given the relatively small amount of capital support, the Group aims for the support to be in the form of non-equity capital (special securities), in line with similar cases in other European Union member states where banks received support in the form of non-equity capital.
It is noted that that the Group’s capital base remains healthy and according to preliminary estimates, the Group’s Tier 1 capital as at 30 June 2012 is estimated to be around 2 bn euro and the Tier 1 ratio at around 8%.
The Group notes that the effort to sell and/or to establish strategic partnerships in the insurance business sector has not been concluded and will be continued, while for the quarter ending on 30 June 2012, the Group intends to proceed with significantly higher provisions for its loan portfolio, primarily in Greece and in Cyprus, due to the ongoing negative economic conditions in these countries.
The Group also intends to include in its financial results losses from further impairment of the new Greek government bonds in accordance with the recent position of the main international audit firms.
At 31 March 2012, the Group’s Total Assets amounted to 38,66 bn euro and the Shareholders’ Funds were 2,85 bn euro. The Bank of Cyprus shares are listed on the Cyprus and Athens Stock Exchanges.