The European Bank for Reconstruction and Development (EBRD) has sold its 5.1% stake in the Bank of Cyprus.
According to an official announcement by the EBRD which described the Bank of Cyprus as the country’s largest lender, "The 22,401,744 shares were offered through an accelerated bookbuild offering to institutional investors on the Athens Stock Exchange (ATHEX)."
The announcement noted that the EBRD first invested in the Bank of Cyprus in 2014 to support its restructuring and stabilisation in the wake of the global financial crisis and the eurozone downturn. "The lender has since returned to profitability – averaging around 20 per cent return on equity over 2023-2024 – and reduced its non-performing loan exposure ratio from around 60 per cent to just 2.5 per cent," it said.
The EBRD’s stake sale will help to increase the liquidity of Bank of Cyprus shares on ATHEX, the body noted in its statement.
The EBRD’s Director of EU Banks and Structured Finance, Kristina Zagar, commented, “We are proud to have supported the Bank of Cyprus in its transformation journey. Since our investment, the bank has successfully strengthened its credit processes and revived lending to the real economy. It has evolved into a resilient and robust business on the back of improved governance, clear strategic vision and consistent delivery on developing a future-ready and sustainable business model. Its recent relisting on ATHEX, following its London delisting, shows the bank has come full circle in its transformation.”
Also according to the announcement, "The EBRD invested around €600 million in Cyprus in 2014-20, primarily to support financial sector recovery after the crisis. The EBRD concluded its mandate in Cyprus at the end of 2020 but continues to manage its portfolio in the country."
The last legacy shareholder
It is worth mentioning that the EBRD was the last legacy shareholder of Bank of Cyprus, holding a stake (5.1%) since 2014.
As InBusinessNews has been informed, there has been significant interest in the shares from institutional investors and the final buyers are mainly long-term investors (long only funds).
A source at the Bank of Cyprus stressed that "the significant interest shows the confidence of foreign institutional investors in the Bank of Cyprus and the Cypriot economy."
According to the same source, the transaction price is considered very good because a large percentage of the last legacy shareholder was sold at a price that is approximately 1.2x Tangible Book value.
(Sources: InBusinessNews, EBRD)
