Cypriot banks looking for way to exit Greek markets

Cypriot banks are examining ways of reducing their exposure to the Greek economy, including their total withdrawal from Greece, according to reports.

The Cypriot edition of Kathimerini reported that the Bank of Cyprus and Greece?s Alpha Bank are considering exchanging loan portfolios – so that Alpha takes over Bank of Cyprus?s loans in Greece and vice versa ? and that Marfin Investment Group (MIG) is considering taking over Cyprus Popular Bank?s Greek operations.

Greek markets account for about 40 percent of Cypriot banks? operations and their branches in Greece operate as subsidiaries, which means any losses are recorded on the books of the lenders on Cyprus.

In a statement on the Cyprus Stock Exchange on Monday, Bank of Cyprus admitted that it was looking at an assets exchange but did not identify a specific Greek lender.

?Further to press articles reporting that Bank of Cyprus Group is proceeding with an asset exchange with another bank, the Bank of Cyprus Group announces that, as part of its plans for the strengthening of its capital position and its balance sheet, it is considering a number of options,? the lender said.

?One of these possible options is the exchange of assets and liabilities with one of the Greek banks operating in Cyprus. Currently all the possible options for the strengthening of the capital position of the Group are being examined and there is nothing specific to be announced at this stage.?