ECONOMY

Bank of Cyprus steps into China

Bank of Cyprus (BoC) has agreed to work with China’s Development Bank Corporation in joint financing projects, news that helped send its share more than 6 percent higher yesterday. The Cypriot lender said it signed a cooperation memorandum with the state controlled Chinese bank on January 18, aimed at backing projects in shipping and renewable energy, among other sectors, that will tighten bonds between Cyprus, Greece and China. «The cooperation with the China Development Bank Corporation is BoC’s first step in the promising Chinese market,» BoC said in a statement yesterday. Shares in BoC jumped 6.64 percent to 3.05 euros on the Athens bourse yesterday, outperforming a 2.62 percent advance on the broader market. In the last three months, the stock has dipped 13.35 percent versus a 2.66 percent fall in the bourse’s general index. BoC has been expanding its geographical reach, opening branches in eight countries and offices in another six, including Dubai and India. Higher provisions in Greece and Cyprus weighed on earnings in the first nine months of 2010 but operations in Russia posted a 300 percent increase in net profit from the previous year. Brokers said the agreement will give the lender a foothold in China, providing it with technical know-how and exposure in a fast growing market. «It is a way of entering a new market without buying a peer or setting up a subsidiary. This approach also limits the risk for BoC,» said a broker from an Athens brokerage.