Bank of Cyprus bid makes case for lender buyouts 22 Sep 2022 Lone Star offered 700 mln euros for the Mediterranean group. It could probably make a good return even if it paid much more. Growing interest from private equity puts other beaten-up minnows on notice, and could be a boon for unwieldy giants in need of pruning, like SocGen.
Cyprus’ bad debt cleanup has lessons for Italy 28 Aug 2018 Bank of Cyprus will sell 2.7 bln euros in non-performing loans to private equity group Apollo. A price of nearly half book value is higher than comparable deals in Italy or Greece, thanks to government reforms. That should lead to healthier, more profitable banks.
Bank of Cyprus picks good time to de-Russify 30 Jul 2014 The island-state’s lender is raising 1 billion euros of new capital to help it pass the euro zone’s upcoming stress tests. That will also reduce the percentage of Russian investors on its share register, and help it look slightly more like a normal bank.
Bank of Cyprus is bank of choice for EU über-bulls 2 Jun 2014 Half the loans of the last major Cypriot bank are in arrears. Two-fifths of its funding comes from central banks. Yet Bank of Cyprus may still be able to secure foreign capital after the EU stress tests, if needed. If so, that would mark a new high in tapering ebullience.
A decade on, some EU values still look strong 2 May 2014 Eight of the 10 countries which joined the union on May 1, 2004 were former communist states. Since then both old and new members have gained, economically and culturally. The EU has proved remarkably strong. But its financial and political values look far less robust.
Hugo Dixon: Europe should give Cyprus a hand 17 Mar 2014 One year after a shock plan to raid bank deposits, capital controls remain in place. The economy hasn’t shrunk as much as feared, but the recession is still deep. The euro zone should help – principally by enabling the lifting of capital controls and the creation of a bad bank.
Early end to Cyprus’ capital controls no sure bet 18 Sep 2013 The Cypriot president says that restrictions in place since March could be lifted in January. Nicosia has been getting through the many reforms needed before such a move can be safely contemplated. But whenever it happens, more remains to be done to avoid a capital flight.
ECB in thorny dilemma over Cypriot capital controls 29 Jul 2013 Bank of Cyprus depositors are about to know their fate. At below 50 percent, the likely haircut on their holdings could have been worse, and means the island state can think about easing capital controls. But that can only happen if the ECB agrees to fund a wave of withdrawals.
Cyprus bond swap is good publicity, bad economics 2 Jul 2013 The creditor banks of Cyprus “voluntarily” exchanged 1 bln euros worth of sovereign debt at cheap rates. That lowers the bailout bill for the euro zone, but the burden falls unevenly on the country’s banks. Exchanging all creditors’ debt would have been fairer - but messier.
Cypriot pleadings to Troika are premature 19 Jun 2013 The struggling euro zone state wants its rescuers to ease its bailout terms, a leaked letter shows. Cyprus is right to feel aggrieved, and ongoing capital controls are a huge concern. But as Ireland learned, tweaks on euro zone bailouts have to be earned.
How capital controls are prolonging Cypriots’ pain 27 May 2013 After March’s brutal haircut on bank deposits, the island state’s economy will shrink this year whatever happens. But punitive controls on Cypriots’ access to their own money are making things worse. Efforts to stop the rot clash with the need to avoid financial instability.
Cyprus punishes the Russians and the prudent 25 Apr 2013 Nicosia wants to shield domestic depositors in the banks where uninsured savings will be haircut. The levy will only hit after loans have been deducted. Foreign customers - mostly Russian - will be penalised. That will also hurt those Cypriots who chose to stay frugal.
Mafia and Cyprus may release IPO animal spirits 22 Apr 2013 High debt didn’t deter buyers from Intelsat and SeaWorld stock sales. Now comes Qiwi, a Cyprus-domiciled, Russian payment system warning about risks from organized crime, the island’s bailout, money laundering and dual-class shares. It puts investor appetite to the ultimate test.
Bank hierarchy of pain could become a hydra 18 Apr 2013 Who should lose money when banks fail? Talk of making deposits senior to bondholders might reassure savers rattled by the Cyprus bailout, and avoid bank runs. But it could lead to unhealthy arbitrage between loans and deposits. Vigilance is needed, and lots of capital.
Austria wakes up to new post-Cyprus world 10 Apr 2013 Vienna will finally negotiate with its EU peers on loosening its bank secrecy rules. Exchanging information with other governments will limit privacy and may require a constitutional change, but the Cypriot drama has tested governments’ tolerance for financial shenanigans.
Hugo Dixon: Cyprus is edging towards euro exit 8 Apr 2013 Quitting the single currency would devastate wealth, fuel inflation, lead to default and leave the small island isolated in a troubled neighbourhood. But the longer capital controls continue, the louder the voices calling for bringing back the Cyprus pound will grow.
Cypriot bailout assumptions look too optimistic 4 Apr 2013 The official lenders will advance 10 bln euros to the stricken state on the basis of a model which shows an 11 pct GDP fall. But private sector analysts have good reasons to predict almost twice that. Cyprus won’t easily get its debt pile to equal its GDP by the 2020 deadline.
Hugo Dixon: Cyprus bank "resolution" a bad joke 3 Apr 2013 Resolution, a new buzzword in financial regulation, is supposed to stop taxpayers having to bail out banks, while imposing pain fairly on shareholders and creditors. In Cyprus, Greek deposits and favoured groups at home are exempt from haircuts. It’s anything but fair.
Hugo Dixon: Cyprus leaves banking union up in air 1 Apr 2013 Optimists hope the fiasco will provide the euro zone with the impetus to complete its banking union. But it is also possible that core countries will now be even more reluctant to absorb the liabilities of bust peripheral banks. Fortunately, there’s a way of squaring the circle.
Cypriot banks’ liquidity lifeline becomes a noose 28 Mar 2013 Laiki’s 9 bln euros of emergency liquidity assistance from the Cypriot central bank kept it afloat before the bank’s winding down. Now it has been dumped on rival Bank of Cyprus. The island state is learning the hard way that ELA is a liability for the government, not the ECB.