The bids for the acquisition of Bank of Cyprus România, rejected

The Central Bank of Cyprus yesterday rejected the bids submitted by Banca Transilvania and Raiffeisen Bank for the total or partial takeover of the Romanian branch of Bank of Cyprus, according to sources, quoted by Mediafax. The National Bank of Cyprus is now looking for alternatives foe the transfer of the deposits from the local unit. Deposits from BoC have fallen below 100 million Euros.

Rumors made the round in the press that the two bids were considered far too low compared to the appraisal of the committee for the restructuring of the banking system in Cyprus, made through consultants.

Raiffeisen Bank allgeldly asked for a lower discount for the loans it was going to take over from the Romanian branch of Bank of Cyprus, but Banca Transilvania, even though it has asked for a higher discount, was willing to include in its portfolio most of the loans with a good service of the debts.

Even though it has asked for a discount higher than the one that Raiffeisen asked for, Banca Transilvania has empowered the lawyers and the representatives it has sent to Cyprus to continue the negotiations, but due to the pressure of the shareholders EBRD and IFC, they had quite little room to maneuver.

The assets recorded by the Romanian branch of Bank of Cyprus amount to approximately 450 million Euros, of which a little over 350 million Euros represent loans.

Compared to the latest numbers published by the local branch, which were indicating a level of the deposits of over 200 million Euros, its portfolio currently amounts to less than 100 million Euros.

From the moment of the closing of the branch, on April 1st, the bank's customers have withdrawn about 3 million Euros.

There has also been information that prior to the beginning of the crisis in Cyprus, some Romanian depositors have accepted to make placements through the local branch directly in Cyprus, at a slightly higher yield.

It remains to be seen what solution the Central Bank of Cyprus will find to take out the deposits of Bank of Cyprus România from under the process of "bail-in", like they did in Greece and Great Britain.

In the case of Bank of Cyprus, depositors with more than 100,000 Euros will find out in September exactly how much they will lose out of the amounts which exceed the guaranteed threshold, as the Central Bank of Cyprus anticipates a percentage somewhere between 37.5% and 60%.

Even though it has initially informed it the branches that the measures will not apply to branches in other countries, Bank of Cyprus has decided to close the Romanian branch starting with April 1st, at first for a week, during which time it was going to identify a buyer for the assets on the balance sheet of the local branch.

One week later, the measure was extended until Monday 22nd, included.