Newsroom
Kathimerini's Panayiotis Rougalas reports in this week's Oikonomiki that CarVal Investors recently sold 3% of its 9.09% stake in Bank of Cyprus, sparking speculation that other shareholders may follow suit and sell their shares. While some investors have started selling, others are rumored to be preparing, and a few have no immediate plans to part with their stakes. What is clear, however, is that Bank of Cyprus' largest shareholders are adopting different strategies as they navigate their future with the bank.
Earlier in October, CarVal sold part of its shares through an accelerated bookbuild (ABB) process, a method used to quickly sell large blocks of stock. Laiki Bank, another major shareholder, has initiated its own sale but without a set timeline. Meanwhile, Caius Capital, which holds a 5.42% stake, has confirmed it is not currently looking to sell its shares and intends to hold onto its investment for the time being.
Caius Capital has a history of adjusting its holdings based on market conditions and continues to evaluate its position in Bank of Cyprus. Though a Bloomberg report over the summer suggested that CarVal and Caius might sell their stakes together, only CarVal's partial sale has materialized thus far.
Laiki Bank, which owns 4.81% of Bank of Cyprus shares, is moving forward with a sale aimed at maximizing returns for its creditors. Based on current share prices, the value of Laiki’s shares is estimated to exceed €90 million. This sale process is being conducted through off-exchange means to optimize the financial outcome for creditors.
The European Bank for Reconstruction and Development (EBRD), holding a 5.04% stake, is another significant shareholder that might consider selling its shares, particularly if share prices continue to rise. EBRD first invested in Bank of Cyprus in 2014, contributing €120 million when the bank’s capital was increased by €1 billion. Sources suggest that should the right market conditions persist, EBRD could exit its position, potentially paving the way for another institutional investor to step in.
Relevance for Cyprus’ Economy
This reshuffling of shares within Bank of Cyprus holds considerable significance for the island’s financial landscape. Bank of Cyprus is a cornerstone of the nation’s economy, and any major changes in its shareholder structure can have ripple effects on both investor confidence and market stability. The Cypriot banking sector has been recovering from the financial difficulties of the past decade, and maintaining investor trust is crucial for continued growth.
CarVal's partial exit could be seen as a move that might unsettle the market, especially as other major shareholders, such as Laiki and potentially EBRD, also contemplate selling their stakes. The fact that these sales are occurring around the same time hints at possible shifts in how international investors view their long-term prospects with the Bank of Cyprus. Such developments are being closely watched not just in Cyprus but also by international financial players, as these transactions could influence the stock market and the country's economic stability.
However, there is also confidence coming from investors like Senvest Management, which has been steadily increasing its position. After selling its shares in Hellenic Bank earlier this year, Senvest has been aggressively buying more shares in Bank of Cyprus, now holding an 8.70% stake. Senvest's move signals optimism about the bank’s future, especially against the backdrop of a 45.55% increase in share value over the past year.
With a market value of €2 billion, Bank of Cyprus has seen its stock price range between €2.83 and €5.10 over the past year. Investors who entered before the 2022 takeover bid by Lonestar Funds have, in many cases, tripled their investments. The continued strong performance of Bank of Cyprus shares underscores why shareholders' moves—whether to sell or buy—are of significant interest in both local and international markets.
As the shareholder landscape continues to shift, the Cypriot economy stands at a crucial point, with Bank of Cyprus remaining at the heart of these financial movements.
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