Central Bank of Cyprus approves the transfer of deposits from Bank of Cyprus to Marfin

The Cypriot Central Bank approved the transfer of deposits from the Romanian branch of Bank of Cyprus, along with the liquidity and retail credits that will cover the liabilities, to the accounting books of the branch of Popular Bank of Cyprus, Marfin Bank, a banking institution registered in Romania and supervised by BNR, Mediafax reports. The more than 1,000 depositors will have access to their accounts starting next week. The final form of the transaction also implies taking over the loans granted to small and medium-sized enterprises. “The loans were selected to have a very good repayment record.

The selection was made by the employees of the banks that wanted to take over Bank of Cyprus, who also had access to the data room previously,” banking sources explained.More than half the deposits, which reach a total amount of about EUR 90 M, were covered with cash and only part with loans. Marfin Romania will be capitalised by Cyprus with EUR 20 M.If negotiations had failed, the deposits made in the Romanian branch of Bank of Cyprus would have fallen under the incidence of the law for the restructuring of the Cypriot banking system, which implied cutting up to 60 pc of the sums which exceed the guaranteed sum of EUR 100,000, for population and SMEs.The Cypriot Central Bank last week rejected the offers submitted by Banca Transilvania and Raiffeisen Bank for the total or partial takeover of the local Bank of Cyprus, but it announced that it will further seek alternatives in Romania to transfer the deposits of the local unit, which diminished to approximately EUR 90 M. The assets of the Romanian branch amount to approximately EUR 450 M, of which little over EUR 350 M are loans.

Based on the information that surfaced about the transaction, Bank of Cyprus will locally administer credits worth about EUR 300 M.The biggest loan extended locally amounted to EUR 110 M, taken by the company that operates the Marriott Hotel; it was extended last fall and will reach maturity in 2017. Approximately half of the other loans registered in the accounting books of the local BoC consists in the financing of medium or large real estate projects.

The credits which remain with Bank of Cyprus will be managed by the Cyprus parent bank, or will be administered until they reach maturity.

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