In response to media reports and statements regarding the participation of the Cyprus Popular Bank in the share capital of the Bank of Cyprus, the Central Bank of Cyprus (CBC) wishes to state the following:
(1) The proportion of the Cyprus Popular Bank in the share capital of the Bank of Cyprus was calculated based on the fair value of net assets and liabilities transferred from the Cyprus Popular Bank on 29 March 2013. This was in accordance with the valuation report of KPMG London, which took into account the fair value of net assets and liabilities of the Bank of Cyprus (before the absorption of the transferred assets and liabilities) on the same date.
(2) Under the Sale of Certain Operations of Cyprus Popular Bank Public Co Ltd Decree, 2013 (PI 104/2013) issued on 29 March 2013, the CBC, as the Resolution Authority, was required to determine the final value of the transferred assets and liabilities. This had to be done after the completion of the valuation by an independent valuer, in accordance with Article 22 of the Resolution of Credit and Other Credit Institutions Law, and the participation of the Cyprus Popular Bank in the share capital of the Bank of Cyprus. It should be further noted that Article 22 of the Law requires that the valuation is carried out in order to estimate the fair value of assets and liabilities of banks undergoing resolution.
(3) The calculations and methodology followed were agreed with the Ministry of Finance and the Troika.
(4) The following link refers to the level of participation of the Cyprus Popular Bank in the share capital of the Bank of Cyprus (in Greek only). Click here.