Hellenic lender to purchase performing financial loans from RCB


Hellenic Bank announced that it has entered into an settlement to receive a undertaking financial loan portfolio (the “Transaction”) from RCB Financial institution Restricted, which was formerly recognised as the Russian Industrial Lender (Cyprus).

According to a statement, the Transaction entails a carrying out bank loan portfolio of gross e book value of close to €556 million, linked money collateral and other credit rating balances of about €89 million and letters of assure of about €23 million. As aspect of the Transaction, up to 16 workers from RCB Bank Limited who take care of this portfolio will be transferred to the Financial institution.

About 75% of the loans are Cypriot exposures, though the remaining 25% are genuine estate loans in the European Union and the Cyprus. The main sectoral exposures are: 37% actual estate and construction, 29% hotels, and 19% wholesale and retail trade. About 54% of the Cypriot exposures relates to current clientele of the Bank.

The loan portfolio is properly collateralised and contains of undertaking small business loans to 103 debtors. The borrowers involved will be vetted for sanctions compliance and AML clearance, in line with the strict monitoring performed by the Financial institution to deal with all connected pitfalls and comply with the relevant sanctions imposed on Russia and Belarus. The Bank will have the right to refuse onboarding borrowers that fail to satisfy its requirements.

The loan portfolio includes: Tranche A (relating to only Cypriot exposures) of about €292 million and Tranche B of about €264 million. The acquisition of Tranche A is anticipated to be completed by 24 March 2022, while the acquisition of Tranche B is envisioned to be finished by 31 May 2022, topic to appropriate due diligence, ultimate arrangement and all related regulatory approvals.

Based on September 2021 figures, the Bank’s accomplishing bank loan portfolio is expected to improve by about 11%, while the professional-forma NPE ratio (excluding APS-NPEs) will be lessened to approximately 13.4% from 14.5%. The Bank’s threat weighted belongings are expected to maximize by about €656 million, resulting in a professional-forma cash adequacy ratio of 2000%, as opposed to 22.3% as of September 2021. On completion of acquisition of Tranche A, the Bank’s professional-forma money adequacy ratio is anticipated to be all-around 21,%.

Oliver Gatzke, CEO of Hellenic Bank explained: In line with the Bank’s approach of rising its company in Cyprus, the Transaction increases the Bank’s consumer base in business enterprise lending, offers cross promoting options, enhances its operating profits through better curiosity revenue and results in potential for escalating its non-desire money.

RCB announcement

RCB Financial institution Ltd announces that it has entered into an agreement with Hellenic Financial institution General public Business Ltd for the sale of a undertaking financial loan portfolio of up to c. €556 million, relevant funds on the accounts of the corresponding borrowers and relevant off-stability sheet obligations.

The bank loan portfolio currently being bought comprises of two tranches – Tranche A of c. €292 million relating to Cypriot exposures and Tranche B of c. €264 million relating to Cypriot, other European and Cyprus exposures. The sale of Tranche A is expected to be done on 24 March 2022, even though the sale of Tranche B is expected to be finished by 31 May possibly 2022, subject matter to all applicable regulatory approvals.

The loan portfolio is effectively collateralized and comprises of generally company financial loans. About 75% of the financial loans are Cypriot exposures, while the remaining c.25% are professional true estate loans in the European Union and the Cyprus. The portfolio includes exposures to Cypriot and other European debtors in the next major sectors: resorts and accommodation, commercial true estate, design and improvement, wholesale and retail trade, production, foodstuff and beverage, renewable vitality and schooling.

The sale of the financial loan portfolio shall strengthen further the funds and the liquidity buffers of RCB Bank Ltd and shall build more substantial buffers, thus permitting for important absorption capability of any likely external shocks. The overall cash adequacy ratio of RCB Lender Ltd shall raise from c. 21% to above 27%. The Bank’s liquidity shall exceed the overall quantity of all liabilities, which allows RCB Bank Ltd both meeting its obligations to all of its purchasers in complete as nicely as to retain enough degrees of liquid assets for its more functions. RCB Bank is anticipated to obtain a overall amount of money of over 500 million Euros from the sale.

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Editor’s notice

The day Russia invaded Ukraine, Russian point out-owned VTB Lender, which obtained slapped by the U.S. with sanctions the similar working day, transferred its stake in Cyprus’ RCB Financial institution to the two remaining shareholders, each of which are firms registered in Cyprus.