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July 10, 2018

Bank of Cyprus to divest UK unit for £103m

Bank of Cyprus Holdings has signed a binding agreement to sell its fully owned UK subsidiary for £103m to Cynergy Capital.

The divestment of Bank of Cyprus UK (BOC UK) also includes Bank of Cyprus Financial Services, a subsidiary of the UK unit.

The sale consideration, subject to customary purchase price adjustments, is payable in cash. Half of the amount is deferred over 24 months from completion, without any performance conditions.

The divestment of UK unit was part of the Bank of Cyprus’ strategy to focus on the domestic economy. It also noted that the sale will have negligible impact on the group’s income statement.

Bank of Cyprus Group CEO John Patrick Hourican said: “This is another positive step in our journey back to strength.

“The transaction will further simplify the Group and deliver good value to shareholders. The equity realised will be deployed in pursuit of our core activity in Cyprus to continue to support the recovery of the Cypriot economy.”

Subject to multiple regulatory approvals, the transaction is expected to close by the end of this year.

Additionally, BOC UK and the group will enter into another agreement to cooperate on various segments including continuity of servicing for existing customers.

After completion, the UK unit is expected to be named Cynergy Bank. As at 31 March 2018, BOC UK had gross loans of £1.52bn, deposits of £1.66bn and risk weighted assets of £800m.

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