12° Nicosia,
18 June, 2024

Hedge funds show interest in Cyprus co-op

Wilbur Ross’ investment group throws hat in the ring


Major hedge funds are showing interest in the Cyprus Co-Operative Bank, including one headed by former Bank of Cyprus Vice Chairman and current US Commerce Secretary Wilbur Ross. 

According to daily Phileleftheros, Wilbur Ross’ group which owns a large share in the Bank of Cyprus, along with Third Point with Hellenic Bank and Fairfax with the Eurobank Group, have all began to examine the Data Room which was made available by the Co-Cop last Monday.  

After the initial deadline of March 29, there will be a period when investors will present their binding proposals, a process which will be overseen by the Bank’s executives and Citigroup Global Markets, which is handling the search on behalf of the bank.

The state currently owns the co-op bank, which is seen as very unhealthy by the European Central Bank. Based on a restructuring plan already put forward, the Co-op managed to cut down on the number of branches and reduce its staff.

Investors could come in and separate regular banking operations from the massive NPL problem

But a main challenge is the urgency to remove the Non-Performing Loans (NPL) which make up 58% of the total co-op loans. Reducing NPL's considerably could be achieved by having investors come in and seperate regular banking operations from the massive NPL problem.

It is not clear what kind of portfolio will emerge from the process, as there are different investors who are interested in different aspects of the bank, such as banking operations, investment, or even bad loans that are estimated to be around 6.7 billion euros.

The NPL problem peaked with the backdrop of a 2013 banking crisis that forced Cyprus to accept a rescue deal that included a seizure of unsecured deposits in the country's two largest lenders, with the Co-Op managing to avoid any haircut whatsoever.

Finance Minister Harris Georgiades said the move would help rebuild confidence and credibility in the bank.

Cyprus  |  bank  |  co-op  |  hedge fund  |  NPL  |  invest

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