EBRD acquires 5.4% share in Hellenic Bank
The European Bank for Reconstruction and Development (EBRD) acquired 5.4 per cent equity stake in Cyprus’ Hellenic Bank.
Hellenic Bank Public Company Ltd is the second largest commercial bank in Cyprus, as it invests €20 million in newly-issued shares, CNA reported.
Speaking during the signing ceremony of the Agreement, the Cypriot Finance Minister Harris Georgiades described the participation of EBRD in Hellenic Bank as a vote of confidence and guarantee that the Bank will continue to support the recovery of Cyprus economy.
"Such moves confirm that the banking system and the country’s economy in general are turning page," the Finance Minister noted, pointing out that through collective efforts, Cyprus has left behind the vicious circle of recession and is already following the path of recovery and development.
However, he said that "we have way to go" and that "we must ensure that this course of reforms, changes and consolidation will continue."
He added, “This is particularly true for our banking system."
The Finance Minister also said that the efforts should be continued with credibility and seriousness, leaving aside irresponsible and dogmatic choices.
Hellenic Bank’s Chairwoman Irena Georgiadou welcomed the EBRD in the share capital of Hellenic Banks and said that "This day marks the beginning of a long and fruitful cooperation between us".
"We look forward to have the EBRD, not only a significant shareholder, but also as a trusted strategic partner the Hellenic Bank ", she said.
Noting that in February 2015, the extraordinary General Meeting of Shareholders authorized the Board to increase the share capital up to 10%, Georgiadou said that the Board and Management of the Hellenic Bank "feel today proud and vindicated that the EBRD chose us."
She added that for many months the echelons of the EBRD were making analytical, diagnostic checks in the Bank, not only on financial data but also on the operations and processes of the bank, pointing out that the corporate governance in the Hellenic Bank is in the levels of international best practices. "
Georgiadou stressed that the Board is committed to implement the ambitious strategic plans of the bank, aiming to make Hellenic Bank a strong bank that meets the expectations of the economy, society, investors and shareholders.
EBRD’s Managing Director for Financial Institutions, Nick Tesseyman said that the Bank`s investment in the Hellenic Bank is very significant, noting that it was not an easy decision to invest in any bank in the region, however, as he said, this decision of the EBRD was a right decision.
He also said that Hellenic Bank has demonstrated that it has taken action to address the NPLs and restructure its operations and has received strong support from its shareholders. He added that with the additional capital to be provided by EBRD, the Hellenic bank will be in an even stronger position to support the real economy of Cyprus and contribute to sustainable economic growth.
Tesseyman also said that there are still huge challenges for the banking sector, "but I firmly believe that we are on the right path."
Chief Executive Officer of Hellenic Bank Bert Pijls said that the EBRD’s investment indicates its trust in the prospects of Hellenic Bank while at the same time it is a vote of confidence in the Cypriot economy by a major and very well-respected international institution.
He added that the additional capital raised aims to support Hellenic Bank’s growth and contribute to the resolution of non-performing loans.
Noting that the second strategic goal of the bank is to grow, Pijls said that if the Bank grows the percentage of NPLs will decrease.
The EBRD started investing in Cyprus last year for a temporary period envisaged to last until 2020. The Bank is focusing on investments in the financial sector, supporting privatisations and private concessions and providing finance to projects of individual private companies. The EBRD’s goal is to support the recovery of the country’s economy following a deep financial crisis.