Russian subsidiary of Bank of Cyprus under scrutiny

b5e77 Russian subsidiary of Bank of Cyprus under scrutiny

The Bank of Cyprus holds 80% stake in Russia’s Uniastrum Bank and it’s possible the later “may provide financial assistance to its parent,” Izvestiya daily reported on Tuesday, citing an anonymous source at Russia’s Central Bank.“At present the Bank of Russia is scrutinizing Uniastrum Bank’s actions and so far the situation doesn’t cause any concern. But if the bank gets caught pulling out capital, supervisory authorities will impose restriction on transactions. An attempt to contribute to the improvement of liquidity there may badly affect the liquidity here.”The sanctions are most likely to affect transactions of large sums of money specifically between the subsidiary and its parent bank in order to prevent capital outflow, Olga Belenkaya from Sovlink investment company pointed out, speaking to Izvestiya. Uniastrum Bank’ press office didn’t confirm it was in talks with Central Bank of Russia over any restrictions whatsoever, however said it cannot and was not planning on transferring money to the Bank of Cyprus. The Bank stressed that regardless of the situation, the share of the Bank of Cyprus cannot be taken from the capital of the Russian bank and can only be sold to a new owner.Earlier this week reports emerged that the Bank of Cyprus might sell its stake in Uniastrum Bank as part of the European Union bank bailout program. If it does decide to sell the 80% stake it bought in 2008 for $580 million, the Cypriot bank will probably have to book a hefty loss. Experts believe, in the event of a sale of the majority stake in Uniastrum bank, the largest Cypriot bank  can implement a package no more than 0.5 to the capital of 10 billion rubles, which equates to $323.3 million. The founding partners of Uniastrum Bank, Gagik Zakaryan and George Piskov, are the most likely buyers if the deal goes through, analysts reckon.

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Russian subsidiary of Bank of Cyprus under scrutiny

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