Hellenic Bank announced that it has entered into an agreement to acquire a performing loan portfolio (the “Transaction”) from RCB Bank Limited, formerly known as Russian Commercial Bank (Cyprus).
According to the statement, the Transaction comprises a performing loan portfolio with a gross carrying amount of approximately EUR 556 million, associated cash collateral and other loan balances of approximately EUR 89 million, and letters of guarantee of approximately EUR 23 million. As part of the Transaction, up to 16 employees of RCB Bank Limited managing this portfolio will move to the Bank.
About 75% of the loans are in Cyprus, while the remaining 25% are in real estate in the European Union and the UK. Main industry positions: 37% real estate and construction, 29% hotels and 19% wholesale and retail trade. Approximately 54% of the Cypriot risks are related to existing clients of the Bank.
The loan portfolio is well secured and consists of performing business loans to 103 borrowers. Eligible borrowers will be screened for sanctions and anti-money laundering clearance in accordance with the strict controls exercised by the Bank to manage all associated risks and comply with applicable sanctions imposed on Russia and Belarus. The bank will have the right to refuse registration to borrowers who do not meet its standards.
RCB Bank Ltd announces that it has entered into an agreement with Hellenic Bank Public Company Ltd for the sale of its operating loan portfolio for amounts up to c. €556 million, related funds in the accounts of eligible borrowers and related off-balance sheet commitments. The loan portfolio to be sold consists of two tranches – Tranche A c. €292 million relating to Cyprus exposures and tranche B c. €264 million relating to Cypriot, other European and UK risks. The sale of tranche A is expected to be completed on March 24, 2022, and the sale of tranche B by May 31, 2022, subject to receipt of all relevant regulatory approvals.
The loan portfolio is well secured and consists mainly of corporate loans. Around 75% of the loans are Cypriot loans and the remaining around 25% are commercial properties in the European Union and the UK. The portfolio includes commitments to Cypriot and other European borrowers in the following main sectors: hotels and housing, commercial real estate, construction and development, wholesale and retail trade, manufacturing, food and beverages, renewable energy and education.
The sale of the loan portfolio will further bolster RCB Bank Ltd’s capital and liquidity buffers, as well as create additional substantial reserves, which will provide significant capacity to absorb any potential external shocks. RCB Bank Ltd’s total capital adequacy ratio will increase from c. from 21% to over 27%. The liquidity of the Bank must exceed the total amount of all liabilities, which allows RCB Bank Ltd not only to fully fulfill its obligations to all its customers, but also to maintain a sufficient level of liquid assets for its further activities. It is expected that RCB Bank will receive more than 500 million euros from the sale.