Bank of Cyprus repays emergency funding in full

Bank of Cyprus repays emergency funding in full

Bank of Cyprus, which was forced to recapitalize by seizing customer savings in 2013, said on Thursday that it has fully repaid emergency liquidity assistance (ELA) to the island’s central bank.

The lender said it had repaid 11.4 billion euros in total.

Most of it was a legacy of Laiki, a lender that was shut down during the financial crisis that gripped Cyprus in March 2013.

Both banks switched to using ELA provided by the Cypriot central bank in 2012 and 2013 after being cut off from the European Central Bank’s funding window.

Under terms of a 10-billion-euro EU/IMF bailout for Cyprus, Bank of Cyprus was forced to acquire operations of Laiki, including its ELA debt, and convert into equity a portion of deposits held by its own clients to recapitalize the lender.

Bank of Cyprus has undertaken extensive deleveraging of non-core assets since 2013 and successfully raised equity in 2014 as it sought to shore up its finances.

The last outstanding ELA debt was repaid on Thursday, the bank said in a statement, adding that it had repaid 3.8 billion euros of ELA during 2016 and early 2017.

“This should further strengthen stakeholders’ confidence that the bank is becoming a stronger, safer and a more focused institution capable of delivering appropriate shareholder returns over the medium term,” Bank of Cyprus chief executive John Patrick Hourican said in a statement.


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