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Today, December 16, will see the relisting of Bank of Cyprus (BoC) shares on both the Cyprus Stock Exchange (CSE) and the Athens Stock Exchange (ATHEX). The bank will relist on both bourses after a 21-month absence with 8.9 billion new and old shares opening at €0.24. 

The development comprises a significant development for the banking sector of Cyprus, which has undergone considerable progress during the year, BoC CEO John Patrick Hourican said in a recent appearance on Bloomberg TV.

“Since our investor road show began in July of this year, we have met with approximately 100 of the world’s most sophisticated investors; about 30 of them came to the stock. We brought in people like Wilbur Ross, the EBRD and various others, who are all very pleased with the institutionalization of the stock.”

Investors in the bank’s stock also include depositors, Hourican explained, who have been offered the chance to remove their money from the bank and have not done so. For this reason, depositor behavior indicates that these individuals will remain with the bank for the medium-term.

Discussing the prompt economic recovery the island has demonstrated thus far, Hourican likened the fiscal issues of Cyprus to “an enormous and torturous cardiac arrest.” Though still in recession, he expressed cautious optimism for the coming year, predicting a modest return to growth. 

“The bank,” he said, “is effectively a levered warrant of the economy in that we are 40% of the loan stock, 25% of the deposit base and have 70% of the corporates on the island banking with us. Therefore, Cyprus’ recovery can be played through investing in the Bank of Cyprus.”

“We have about 450,000 of the 800,000 people who live in Cyprus banking with us, as well as an additional 350,000 individuals who have holiday homes here. So we have a balanced business that has domestic as well as international dimensions.”

Capital controls 

Regarding the remaining capital controls, Hourican stressed that the Bank of Cyprus is cooperating closely with the Ministry of Finance to work towards lifting these restrictions. “There is a gateway through which money moves and we would like to see that gateway widened,” he said. “We are absolutely ready for this, having contingent liquidity set up.”

Russian-EU tensions

Touching upon regional tensions following the implementation of sanctions and retaliatory measures between the EU and Russia, the BoC CEO noted that geopolitical and geoeconomic turmoil of this prominence forces businesses and institutions alike to assess the risk this poses to their operations.

This is particularly relevant for the Bank of Cyprus, Hourican explained. “We own a Russian bank, Uniastrum Bank, where we have 2,500 employees working in its 170 Russian branches. The bank has about 1 billion euros of ruble equivalent, and so we have to manage that business despite the challenges the economy faces.”

Equally, he continued, the bank must ensure that its Cyprus operations are nimble enough to remain effective and real for the customers who use it in the light of a changing political environment. 

“We absolutely want to keep that business despite the challenges it is facing; we are very happy with our relationship with Russian customers. They represent a significant portion of our customer base, comprising some 40% of our overseas business.”

“There is no question that the Russian situation puts us on alert to manage our business well – but that’s business,” he concluded.