Bank of Cyprus reaches deal to acquire deposits and loans from CDB

The Bank of Cyprus (BoC) on Monday announced an agreement to acquire performing loans, deposits and selected assets and liabilities from the Cyprus Development Bank (CDB), marking a strategic move aligned with its growth plans.

The transaction, agreed between Bank of Cyprus Holdings Public Limited Company and the Cyprus Development Bank, involves the acquisition of a portfolio of performing loans with a gross book value of approximately €150 million.

It also includes deposits totalling around €500 million, strengthening the bank’s funding base.

The deal is expected to be completed at a price close to par, reflecting its low-risk profile and limited impact on capital, estimated at around 35 basis points.

The acquisition is anticipated to deliver a modest positive impact on the group’s income statement following synergies, while maintaining financial stability.

The transaction remains subject to approval by CDB shareholders, finalisation of transaction documentation and regulatory approvals, along with other standard conditions.

Completion is expected in the second half of 2026, subject to these requirements being fulfilled, the bank reported.

What is more, the Bank of Cyprus has already secured irrevocable commitments from shareholders representing approximately 96 per cent of CDB’s issued share capital to support the transaction at an extraordinary general meeting.

The move supports the bank’s strategy to expand its performing loan portfolio and deposit base in the medium term, reinforcing its core operations, the bank pointed out.

The acquisition is also consistent with the bank’s approach of targeted and cautious growth, as repeatedly highlighted by chief executive officer Panicos Nicolaou in previous public statements.

Furthermore, the transaction is considered small in scale and low risk, enabling the bank to accelerate organic growth without affecting its dividend policy.

It is expected to enhance the bank’s liquidity through a net inflow of deposits, while strengthening its portfolio of performing loans.

The agreement has received broad backing from the majority of CDB shareholders, underlining confidence from both sides.

According to the bank, the deal “sends a clear signal to the market that the Bank of Cyprus continues to pursue disciplined growth, capitalising on opportunities that align with its strategic profile”.

It also “reflects the bank’s commitment to creating long-term value for shareholders and customers, while maintaining a prudent risk framework”.

Finally, it was reported that the Bank of Cyprus is being advised on the transaction by KPMG Limited as financial advisor and by Hadjianastassiou Ioannides LLC as legal and competition counsel.