This would mark the first sale of an asset by what remains of the now-defunct bank.
Legacy Laiki is currently awaiting approval from the National Bank of Romania (Romanian central bank), which is determining whether the new buyer is ‘fit and proper’.
“It is a matter of days before official announcements will be made,” according to a person close to the issue.
Marfin Bank in Romania is an entrenched lending institution, with a total capital adequacy ratio (CAR) of 19.4% as of August 31, 2015. The bank attracted the attention of large investors, which pushed up its value to a favourable price.
“Marfin will be sold above its book value,” the same source told the Cyprus Weekly.
Currently the bank’s book value is €22.7 million. According to Investment Bank of Greece (IBG), Laiki’s subsidiary in Greece which is running the sales process, the bank’s significant deleveraging over the past three years is “due to stricter regulatory measures the bank has experienced”.
Nevertheless, its value has slipped to one-third of its level in 2013, when the bank was first given to Laiki creditors to compensate them for almost €4 billion in losses when their deposits over €100,000 were subject to the bail-in (haircut).
According to analysts the total value of Legacy Laiki’s assets has been reduced to less than €0.5bn. Laiki’s assets include Marfin Romania, IBG and Laiki’s subsidiaries in Serbia, Russia and Ukraine, as well as a significant stake in Lombard Bank of Malta.
Lack of progress over selling Laiki’s assets, mired in a dispute between the Central Bank of Cyprus as the Resolution Authority and the former administrator, has angered former depositors.
Earlier this month, members of the opposition Democratic Party (DIKO) and ruling Democratic Rally (DISY) proposed that the administration of Legacy Laiki be handed over to the bailed-in depositors.
The contract of the current administrator, Chris Pavlou, was due to expire on December 31 and Pavlou came under pressure from Diko leader Nicolas Papadopoulos over his role in Laiki and IBG.
However, the Resolution Authority has extended his contract for another six months according to Cyprus Weekly sources.
“The Resolution Authority supports Mr Pavlou,” a central bank source told the Cyprus Weekly under the condition of anonymity.
Pavlou warned parliament that handing the administration to former depositors could jeopardise the whole sales process in light of the transfer of the Resolution Authority from the Central Bank of Cyprus to the EU’s Single Resolution Board from January 1.
“Foreign supervisory authorities will intervene and strip Laiki of its assets,” Pavlou told MPs.
It remains unclear how the transfer could affect the sales process.
Source: InCyprus
