Bank of Cyprus

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Bank of Cyprus Public Company Ltd
Τράπεζα Κύπρου Δημόσια Εταιρεία Λιμιτεδ
Type Publicly traded limited company
Traded as CSE: BOCY, Athex: BOC
Industry Financial services
Founded 1899
Headquarters Strovolos, Nicosia, Cyprus
Area served Cyprus, UK, Guernsey, Russia.
Key people Christis Hassapis (Chairman)
John Hourican (CEO)
Products Retail, investment and business banking, factoring, brokerage, insurance, asset management
Revenue Increase1.541 billion (2011)[1]
Profit Decrease €-1.378 million (2011)[1]
Total assets Decrease€37.48 billion (end 2011)[1]
Total equity Decrease€2.429 billion (end 2011)[1]
Employees 12,326 (end 2011)[2]
Subsidiaries Uniastrum Bank
Website www.bankofcyprus.com

Bank of Cyprus (Greek: Τράπεζα Κύπρου) is a major Cypriot financial institution. In terms of market capitalisation, of 350 million in March 2013, it is the country's biggest bank. As at September 2012, the bank held a 26.7% share of the Cypriot deposit market and a 22.5% share of the Cypriot loan market, making it the largest bank in Cyprus. The Bank of Cyprus Group employs 11,326 staff worldwide.

The Group currently operates through a total of 393 branches/business offices, of which 202 operate in Cyprus, four in the United Kingdom, one in the Channel Islands. 199 are in Russia especially in Moscow and St. Petersburg [3]

The shares of the bank are listed on the Cyprus Stock Exchange (CSE). The Bank is the largest listed company on the CSE in terms of market capitalization and is widely held. Since October 8, 2007 the Bank of Cyprus has been part of the Dow Jones Cyprus Titans 10 Index, which comprises the 10 largest companies in Cyprus. The Bank of Cyprus is also listed on the Athens Stock Exchange and has been part of the FTSE/Athex 20 index from 9 October 2006.[4]

The bank adopted as its emblem the ancient Cypriot coin bearing the inscription ΚΟΙΝΟ ΚΥΠΡΙΩΝ ("Common to all Cypriots").

History[5][edit]

Bank of Cyprus headquarters next to Central Bank of Cyprus offices
Bank of Cyprus new offices in Aglandjia suburb of Nicosia
  • 1899 On January 1, 1899, a group of progressive and visionary Cypriots led by Ioannis Economides, a significant figure in financial and social circles, founded the "Nicosia Savings Bank" or "Nicosia Depository" («Ταμιευτήριο η Λευκωσία»). This is the first Cypriot bank; all the other banks in Cyprus are foreign-owned.
  • 1912 The "Nicosia Savings Bank" became a public company and changed its name to Bank of Cyprus (BoC), three years after the its shareholders had applied to the High Commissioner in 1909.
  • 1930 The BoC incorporated as a limited company.
  • 1944 The BoC acquired the Melissa Bank, Paphos, (est. 1924). The Mortgage Bank of Cyprus was established.
  • 1945 BoC merged with the Cyprus Savings Bank (Kypriakon Tomieftiron), which had been established in Nicosia in 1908.
  • 1953 BoC merged with Paphos Popular Bank (Paphos Laiki Bank) (est. 1924).
  • 1955 BoC opened its first branch abroad when it opened in London to serve the Cypriot community there.
  • 1960 BoC established a subsidiary, Bank of Cyprus (London) Ltd.: Xeros, Morphou and Zodhia (Nicosia District), Golden Sands, Kato Varosha, Kennedy Avenue, Democratias Avenue, Evagoras Avenue and Oceania (Famagusta Town), Yialousa, Rizokarpaso and Lysi (Famagusta District), and Kyrenia, Karavas and Lapithos branches (Kyrenia District).
  • 1982 BoC acquired Standard Chartered Bank's Cypriot operations. (The then Chartered Bank had bought the Ionian Bank's Cypriot operations in 1957.) BoC also opened a representative office in Greece.
  • 1986 BoC opened a representative office in Australia.
  • 1991 BoC established its first branch in Greece. Kolonaki branch was located at the corner of Vasilissis Sophias Avenue and Sekeri Street, and also boasted a Business Banking Centre and the bank's treasury. In the summer of 2009, this and Mitropoleos Street branches were merged to form the new Syntagma Square branch, which retains branch code 001.
  • 1995 BoC opened a representative office in South Africa, and a branch in Heraklion, Crete.
  • 1996 BoC established Bank of Cyprus (Channel Islands) in Guernsey, and a representative office in Toronto, Canada, located in the heart of Greektown in Toronto to serve mainly the Greek-Cypriot community.
  • A subsidiary company, Cyprus Leasing S.A., was established in Greece to deal with leasing activities. It is now the second largest of its kind in Greece. In Cyprus, leasing activities are carried out by a dedicated department of the BoC itself rather than a focused subsidiary.
  • 1998 BoC established representative offices in New York and Moscow, and then another in Bucharest, Romania.
  • 2000 BoC established a subsidiary in Australia, the country with the world's largest Greek and Cypriot community. The community, which numbers around 600,000 people, is concentrated in Melbourne and Sydney. BOC had long had a presence in the Australian market through its representative offices in Sydney, Melbourne, Adelaide and Brisbane. BoC also opened a representative office in Bucharest.
BoC bid for Interbank in New York for about $43 million. Interbank was 78% owned by Greek businessman Dimitris Kontominas, and the remaining equity was dispersed among three other shareholders. With four branches in New York, including the Astoria, Queens area where there is a strong Greek presence, the bank catered to the Greek American community. The U.S. Federal Reserve withheld its approval and bid expired.
  • 2004 BoC merged its UK branch with its subsidiary Bank of Cyprus (London) Ltd. The combined business is known as "Bank of Cyprus UK".
  • 2005 BoC opens its Pallini branch in eastern Athens, thereby reaching 100 branches in Greece.
  • 2007 On October 8, 2007, BoC announced that it had opened a branch in Moscow, making it the first Cypriot bank to have banking operations in Russia. In the same year, the opening of two new branches in Athens (Haidari and Spata) meant that the branches in Greece outnumbered those in Cyprus.
  • 2008 BoC purchased 80% of Uniastrum, the 9th largest bank in Russia, for US$576 million.[6] Uniastrum Bank has over 220 branches throughout Russia and continues to operate under its own name, which however is linked with that of the Bank of Cyprus Group. Just at that time funds under Uniastrum management went bankrupt. Investors lose US$100 million.
  • 2008 BoC acquired 97% of the share capital of AvtoZAZBank in Ukraine, which operated through 26 branches and 18 seasonal cash offices located in Ukraine's four main regions. The bank now trades under the Bank of Cyprus name.
  • 2010 The Bank of Cyprus decided to establish a banking unit in the Dubai International Financial Centre (DIFC), in the Emirate of Dubai, in the United Arab Emirates. It also established a representative office in India. In Cyprus, Ayios Lazaros branch in Larnaca closed, due to the forthcoming demolition of the building housing it. Despite the harsh economic downturn in Greece, the network there continues to grow, with the opening of 20 branches throughout Greece, with 10 those to be located in Greater Athens, five in Salonica, and five in other areas.
  • 2011 Bank of Cyprus sold Bank of Cyprus Australia to Bendigo and Adelaide Bank. The former Bank of Cyprus Australia Ltd is now known as Delphi Bank.
  • 2012 Bank of Cyprus UK becomes a subsidiary, regulated by the Financial Services Authority. Under pressure from the Central Bank of Cyprus, CEO Andreas Eliades resigned as Bank of Cyprus could not reach by private means the 9% Core Tier 1 capital by 30 June 2012 that the European Banking Authority had required. Eliades's replacement was Yiannis Kypri. The bank was also forced to re-consider its strategy of rapid international expansion.
  • 2012–2013 Due to the harsh economic downturn in both Cyprus and Greece, the Bank of Cyprus has begun downsizing its network in Greece by way of closing branches, with the greater Athens area most affected (closures as at March 2013 are the branches at Omonia Square, Phidippides Street, America Square, Gyzi, Tavros, Petralona, Kessariani, Nea Ionia, Yerakas, Spata, Peania, Drapetsona, Ayios Ierotheos and Keratea). Three branches have closed in Salonica (Nikis Street, Stavros and Ionia), one in Patra (Acrotiriou Street, leaving the Corinth Street and Ayea branches in operation), one in Heraclion, Crete (62 Martyrs Avenue), Asklipiou Street in Trikala which was merged with the town's other branch at 28 October Street, the Corfu Harbour branch was merged with the Corfu Town branch, Ialyssos branch on the island of Rhodes was absorbed by the Rhodes Town branch, while the towns of Alexandria in northern Greece and Loutraki became devoid of Bank of Cyprus branches altogether. In most cases, the ATMs of the branches were either retained on site or transferred to nearby premises to allow former customers some form of access to their accounts. In addition to downsizing the network, the bank has reduced its staff by 300 by way of voluntary redundancy, but still aims to further reduce its number of branches firstly to 110 from a current 166, and then closing all of its smaller branches with up to five staff, maintaining only a small number of branches in key locations.
  • On 26 March 2013 the Greek branches of the bank, along with those of CPB Bank (the Greek arm of the failed Laiki Bank) and Hellenic Bank, were sold to Piraeus Bank. Unlike other banks in the Piraeus Bank Group (ATEbank, Geniki Bank etc.), which retain their corporate identities, the "Bank of Cyprus" brand will be replaced in the ex-Bank of Cyprus branches by the Piraeus Bank corporate identity.
  • 2013 The good parts of Cyprus Popular Bank were merged into the new Bank of Cyprus. On 27 March 2013 the board and CEO were replaced. A Special Administrator was put in place for 4 months to oversee the merger with the good parts of Cyprus Popular Bank. A new interim board and interim CEO were put in place for 3 months, to replace the Special Administrator to lead the back to a new Annual General Meeting on 10 September 2013 and to oversee the "bail in" of depositors and to restructure and downsize the new bank. Staff salaries were cut up to 30% and a voluntary retirement scheme was agreed with the bank workers union. The branch network in Cyprus will also be rationalised as well as the head office functions of the two merged banks.
  • 2014 The bank is carrying out the selling of non-core assets and has thus sold its stake in the Romanian Banca Transilvania and the Ukrainian bank was also sold.

Cultural Foundation[edit]

The bank operates the "Bank of Cyprus Cultural Foundation", which it established in 1984. It claims its purpose is to "assist in the rescue of the island's cultural heritage, which has been pillaged or stolen by the Turkish forces from the occupied areas, and to promote the Hellenic culture of Cyprus at a professional and scholarly level".[7] It has various collections of Cypriot artifacts, such as ancient coins, old maps of the island, art pertaining to the island and rare documents.

Awards[edit]

In 2008 the Bank of Cyprus was a recipient of a Ruban d'Honneur for Growth Strategy of the Year Award, one of the European Business Awards.[8]

Recent history[edit]

In recent years the bank in the UK has developed into a more focused business bank, supporting its lending with a range of savings products. As part of this strategy the bank has invested in its telephone and online banking services and closed a number of its retail branches, whilst opening dedicated business offices. Current locations are as follows:

  • Central London (Charlotte Street) – corporate and high net worth banking for UK and overseas customers
  • North London (Southgate) – business banking, along with customer service, counter service and administrative support
  • Birmingham (Sutton Coldfield) – business banking
  • South London (Croydon) – business banking

Business banking customers can also access branch counter services through the bank's relationship with the Lloyds Banking Group network, whilst all personal and business customers can service the majority of their routine banking needs through postal, telephone and online banking services.

Oncology Center[edit]

The Bank also operates, in concert with the Republic of Cyprus, the BOC Oncology Center. The agreement provided for the bank's giving the money to build the center on land given by the government and the appropriation of the operating budget by the government.

Controversy[edit]

Bank of Cyprus (Romania) announced in mid-December 2009 that it had purchased 9.7 per cent of TLV's (Banca Transilvania) shares for EUR 58M, and in May 2010 expressed interest in taking over 20 per cent of the bank's stock. DIICOT, the body that investigates organized crime and terrorism, charged the head of Banca Transilvania's administration council, Horia Ciorcila, and the head of Bank of Cyprus (Romania), Georgios Christofourou, with stock market manipulation and money laundering in this transaction.[9] DIICOT also charged a former vice-president of the administration council or Banca Transilvania, Claudiu Silaghi, and Bank of Cyprus employees Anastasios Isaakidis, along with four other individuals. Bank of Cyprus (Romania) denied any wrongdoing. The Bucharest Tribunal acquitted Ciorcila and Christofourou on 4 July 2011, as did the Bucharest Court of Appeal on 27 June 2012. On 2 July 2014, the Romanian High Court of Justice (http://www.scj.ro/dosare.asp?view=detalii&id=300000000339790) rejected the second appeal made by DIICOT, as ungrounded. Consequently, the acquittal decisions issued by the Bucharest Tribunal (2011) and Court of Appeal (2012), have been maintained, confirming the full acquittal of all the defendants. The decision of the Romanian High Court of Justice is final.

Deposit tax and bailout[edit]

According to a recent blog by Paul Krugman, the decision imposed by EU finance ministers to force depositors in Cyprus to take a loss, in order to help fund an International Monetary Fund and euro zone bailout, on their deposits may potentially cause a bank run in other EU countries. Depositors in Spain and Italy and elsewhere may become concerned that they will also lose their funds and withdraw ahead of any such impositions. Other economists at leading banks, including Morgan Stanley and Citigroup, have voiced similar concerns.

References[edit]

  1. ^ a b c d "Annual Financial Report 2011". Bank of Cyprus. Retrieved 28 March 2013. 
  2. ^ "Annual Report 2011". Bank of Cyprus. Retrieved 28 March 2013. 
  3. ^ "Bank of Cyprus moves into Russia". BBC. 7 June 2007. Archived from the original on 12 June 2007. Retrieved 2007-06-08. 
  4. ^ "Bank Of Cyprus". 
  5. ^ 110 Moments in Our History. 2009. Bank of Cyprus.
  6. ^ "Cyprus Bank buys 80 per cent of Russia's Uniastrum". The Economic Times (Bennett Coleman & Co. Ltd.). 28 June 2008. Retrieved 2008-06-28. 
  7. ^ "BOCCF - Bank of Cyprus Cultural Foundation". 
  8. ^ "Ruban d'Honneur recipients". European Business Awards. 2008. Archived from the original on 2008-04-13. Retrieved 2008-04-26. 
  9. ^ "Banca Transilvania and Bank of Cyprus heads accused of insider trading". Romanian Business Insider. 12 July 2010. 

External links[edit]