Marfin Popular blasts Bank of Cyprus’s refusal on international cooperation

Marfin Popular Bank issued a statement yesterday condemning what it called the hasty rejection by the Bank of Cyprus of Marfin’s proposal earlier this week for the two banks to team up in their international operations. Marfin accused BoC officials of being unaware of its proposals as they «refuse to talk with us,» while promising «a pleasant surprise for our shareholders both in terms of figures and quality of profits,» which would leave BoC officials exposed. Marfin became a major shareholder in BoC in March, snapping up an 8.07 percent stake from rival Piraeus Bank. On Tuesday, Marfin’s chief executive, Andreas Vgenopoulos, spoke to shareholders in Nicosia: «We would want to pursue a strategic cooperation agreement, providing, in the immediate future, for the merger of the international activities of the two banks. It would, in the future, provide for the full merger of the two banks when market conditions allow it,» Vgenopoulos said, without giving a time frame. Marfin said a merger could create the second-largest Greek bank with 58 billion euros in assets. Marfin shareholders approved the motion, which contains the proviso that its board will enter discussions only if BoC’s board gets a corresponding mandate from its own shareholders to negotiate. In adding such a condition, Marfin was effectively throwing down the gauntlet to the BoC board to talk to its shareholders, many of whom have stakes in both banks. The Cypriot bank has rebuffed overtures for a merger or cooperation, and reiterated that rejection on Tuesday. Marfin, created from the three-way merger of one Cypriot and two Greek banks, has in the past floated the idea of the two banks cooperating internationally. Dubai Financial owns just over 17.5 percent of Marfin. BoC is poised to start banking operations in Russia, and Marfin recently acquired a bank in Ukraine. Both banks are also active in Britain and Australia, which have large Greek and Cypriot communities. Marfin unsuccessfully courted BoC earlier this year with a stock-only public offer for a full merger that was ruled invalid by the Cyprus securities regulator. That was prior to Marfin’s snapping up the Piraeus Bank stake and becoming the largest single shareholder in BoC, Cyprus’s biggest bank. Asked whether Marfin would, as a shareholder, raise the issue at BoC’s next annual meeting in the event of a rejection, Vgenopoulos told a shareholder, «Of course we will. You don’t lose anything by talking… who are they (BoC’s board) to refuse to talk? Is the bank theirs? It belongs to shareholders.» Marfin’s overture was immediately rejected by BoC. «The conditions for generating added value for group shareholders, customers and employees are not met,» the bank said in a statement. BoC said it did not intend to «put at risk a three-year business plan that aims to ensure a major increase in profits,» adding that its strategy was different to that of Marfin. (Reuters/Kathimerini)

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