ECONOMY

Bank of Cyprus boosts its Russian presence

Bank of Cyprus has signed a deal to buy an 80 percent stake in Russia’s Uniastrum Bank for 371 million euros, the country’s ninth-largest lender, broadening its international presence. «Uniastrum Bank will significantly strengthen our footprint in our targeted markets,» said Bank of Cyprus CEO Andreas Eliades. «It adds a highly promising international dimension and diversification to our already extensive presence in Cyprus and Greece and our expanding operations in Ukraine and Romania.» The bank expects the acquisition to be concluded in the fourth quarter of 2008, after regulatory approval from Greece and Russia. The purchase price corresponds to 3.1 times book value, including a capital increase of $50 million which will be made upon completion of the takeover. Bank of Cyprus said the purchase will be financed through existing capital. The acquisition is expected to increase profit from the first year of investment in 2009, and provide a 10 percent return on investment in 2010. Uniastrum was created in 1994 and is the ninth-largest in Russia in terms of its branch network. Uniastrum will continue to operate independently of the existing Bank of Cyprus network in Russia, which started full banking operations in 2007.