ECONOMY

BoC says it will go it alone, ponders growth in Russia

NICOSIA (Combined reports) – Bank of Cyprus stuck to its story yesterday that it is not for sale, repeating its rejection of rival Marfin Popular’s bid to create the largest banking group in Cyprus and Greece. «This offer is not serious. It is a totally unacceptable offer to our shareholders,» said Charilaos Stavrakis, the deputy chief executive officer of the group headquartered in Cyprus’s capital Nicosia. «Not only is there zero premium, but it is in (Marfin) shares which, in our view, are comparatively less attractive in the long term,» said Stavrakis. He told Reuters that the Cypriot bank expects to be fully operational in Russia this year which will gear further growth. «Bank of Cyprus is now at a critical phase for further expansion. We have an ambitious strategic plan for Russia, and this is a golden opportunity for us in the years to come,» the Cypriot executive said. The bank expected to have a final formal license from Russian authorities in the next three months, he said. Bank of Cyprus has about 30,000 Russian clients in its books through the Cypriot offshore business sector. It now does business there through a representative office. In a pointed reference to Marfin being 15 percent-owned by Dubai Financial, some local officials have alluded to the need for maintaining a strong Cypriot-owned bank. Bank of Cyprus has also highlighted that its board only comprises Cypriots. «We are a private sector company but we are also Cypriots. For as long as Cyprus is semi-occupied we think there is a strong economic and political case for not having the banking system dominated by foreign interests,» said Stavrakis. Marfin, created by the merging of a Cypriot and two Greek banks in 2006, has offered 1.241 of its shares for each Bank of Cyprus share. The offer values the Cypriot group at about its current market capitalization of 6.1 billion euros. The Marfin bid, twinned with a separate offer for Greece’s Piraeus Bank, is under regulators’ scrutiny on whether it was a defensive move to ward off becoming a takeover target. MPB bid thrown out Cyprus’s Capital Markets Commission yesterday gave the thumbs-down to Marfin Popular Bank’s (MPB) public offer for Bank of Cyprus (BoC), in effect vindicating Piraeus Bank. The regulator said MPB acted in violation of regulations, called on it to withdraw the offer and imposed a fine of 10,000 Cyprus pounds. The commission’s ruling means that the only public offer valid in Cyprus is that of Piraeus Bank for MPB. The Greek Capital Market Commission, which had given precedence to the island’s counterpart body, is also expected to reject MPB’s bid for Piraeus today. Following these developments, Piraeus Bank is now seen securing ample time to consider its next moves. MPB’s chief, Andreas Vgenopoulos, said on Monday his group would proceed with its plans irrespective of legal tangles and delays. (Reuters, Kathimerini)