Thursday, June 16, 2016
Bank of Cyprus moving towards London listing regardless of Brexit outcome
Bank of Cyprus Public Company Ltd, the country’s largest lender, doesn’t intend to change its plans to list on the London Stock Exchange if the U.K. votes to leave the European Union in a June 23 referendum, Chief Executive Offer John Hourican said.
“While the City of London may suffer something over time following a Brexit, the London infrastructure on global financial markets sits slightly separate to the U.K.’s destiny,” Hourican said in an interview in Nicosia.
The plan to list on the LSE remains on schedule for the second half of the year and the move will give the lender’s stock the best chance of success, the CEO said.
Bank of Cyprus “on-boarded” just under 300 million euros of assets in the first quarter under its debt-for-assets swap program, the CEO said. Under the program, borrowers incapable of servicing loan obligations can provide the lender with an asset in exchange for the debt.
The bank has been successful in the limited number of sales of such assets to date, maintaining values and selling at appropriate prices, Hourican said.
Bank of Cyprus is already benefiting from renewed growth of the Cypriot economy with loans in arrears for more than 90 days falling 9 percent, or by 1 billion euros, in the first quarter, Hourican said. The economy expanded 2.7 percent in the first quarter.
Once Bank of Cyprus lists in London the stock will become more liquid. As the Bank continues to slowly but surely dispose of bad loans I anticipate a re-rating at some point. Banks are really out of favor right now but Cyprus is already bombed out and is emerging from its crash and showing decent growth. There are several catalysts like a reunification of the island between Greeks and Turks and the development of the extensive offshore natural gas reserves.