Bank of Cyprus offloads UK subsidiary for £103m to 'Cynergy' consortium

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Bank of Cyprus will use the capital freed up by the sale to boost its Cypriot operations (Source: Getty)

The Bank of Cyprus has agreed to sell its UK banking operations to a consortium of investors in a £103m deal.

The all-cash sale, which will complete by the end of the year, comes as Bank of Cyprus refocuses its efforts on the Cypriot economy.

The lender was bailed out in 2013 by European authorities, but has since recovered under the leadership of ex-Royal Bank of Scotland investment bank boss John Hourican, floating at the start of 2017 on the London Stock Exchange.

Hourican said the equity freed up by the sale will be redeployed in its Cyprus operations. The bank will make an accounting profit of €3m (£2.7m) on the sale, it said today.

Read more: One step closer: Bank of Cyprus' float paves the way for capital raise

The UK operation will be rebranded to be called Cynergy Bank, with the new owners signing a cooperation agreement to continue servicing existing customers in the UK.

The UK bank currently counts around 70,000 retail customers and 5,000 businesses among its clients, mostly based in London and the South East. It provides specialist property and business lending, as well as retail mortgage products, savings and current accounts.

Bal Sohal, one of the leaders of the consortium, said the investors "see significant opportunities for growth and to better address the needs of small businesses in the UK" in the banking sector.

Nick Fahy, chief executive officer of BOC UK, said the sale was "a positive development for the UK bank".

"The sale to Cynergy will enable us to focus on growing our franchise across enterprising business owners and savers in the UK, including the underserved property and SME market," he said.

HSBC acted as financial advisor and Norton Rose Fulbright as legal advisor to Bank of Cyprus on the deal, while PwC acted as financial advisor and Eversheds Sutherland as legal advisor to Cynergy.

Bank of Cyprus shares fell by 1.2 per cent in trading today.

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