Roundup: Bank of Cyprus shares resume trading in stock exchanges in Cyprus, Athens

0 Comment(s)Print E-mail Xinhua, December 17, 2014
Adjust font size:

Bank of Cyprus (BOC) made yet another step towards recovery on Tuesday when its shares resumed trading in the Cyprus Stock Exchange (CSE) and the Athens Stock Exchange (ATHEX), 21 months after the lender was resolved in a messy bail-out of Cyprus.

However, its 8.9 billion ordinary shares came under pressure on the first day of trading as former small depositors who unwillingly had become shareholders when their money was converted into equity shed off their shares.

BOC's shares were listed at 0.24 euro, the issue price, but opened at 0.23 euro as the session began in the Cyprus Stock Exchange. The price gradually slid to a 0.17 euro low before rebouncing to 0.18 euro at closing, recording a day loss of 21.74 percent on the opening price and 24 percent of the issue price.

The price in ATHEX trading closed at 0.177 euro, recording a loss of 23.03 percent of the opening price.

CSE sources said that dealings in Tuesday's trading were in small bundles of shares, suggesting that the sellers were mostly people seeking cash money to meet urgent obligations.

They were people whose deposits were seized in the March, 2013 internal recapitalization of the bank and converted into equity.

CSE director general Nontas Metaxas said that the trading of BOC shares helped the day's volume reach about 2 million euros, more than 10 times the volume of daily trading for many months. Of this, 1.8 million euros came from BOC shares trading.

The CSE sources said a large portion of the bank's shares was not available for trading as many equity holders failed to make in time all necessary paperwork to have their names listed.

About 47 percent of BOC shares belong to former large creditors, many of them Russians, whose deposits were impaired by 47.5 percent to recapitalize the bank.

The rest of the shares belong to investors around US billionaire Wilbur Ross, who acquired the largest portion of new shares issued in a capital increase in September, the European Bank for Reconstruction and Development and the Renova investment group run by Russian billionaire Viktor Vekselberg.

BOC shares were last traded on March 15, 2013, before the lender shed off its extensive operations in Greece and closed down its Ukraine branches as part of a restructuring of the Cypriot banking system at the instigation of Cyprus's European partners.

The Eurogroup meeting in Brussels on March 16, 2013, officially suggested for the first time the recapitalization of Cypriot banks by impairment bank deposits.

The Eurogroup originally proposed seizing 6.7 percent for insured deposits up to 100,000 euros and 9.9 percent for all deposits above that limit.

The Cypriot parliament turned down the proposal and the Eurogroup came back ten days later with a new measure impairing all large deposits of the Bank of Cyprus only, which finally came up to 47.5 percent.

The bail-in, as the internal recapitalization conversion of deposits into equity came to be known, and also the winding down of the second largest lender and its folding into BOC, was part of a 10-billion-euro bailout of Cyprus by the Eurogroup and the International Monetary Fund.

BOC's CEO, Irish banker John Hourigan said in an interview on the occasion of its return to CSE that the lender is now in a much better shape after its recapitalization in September and has showed signs of stabilizing in asset quality and deposit base.

He said that there was no significant outflow of capital despite easing most restrictions in transfers abroad and there is also an inflow of some deposits from Greek banks. Endite

Follow China.org.cn on Twitter and Facebook to join the conversation.
Print E-mail Bookmark and Share

Go to Forum >>0 Comment(s)

No comments.

Add your comments...

  • User Name Required
  • Your Comment
  • Enter the words you see:   
    Racist, abusive and off-topic comments may be removed by the moderator.
Send your storiesGet more from China.org.cnMobileRSSNewsletter