THE banking woes of Italy, the euro area’s third-biggest member, pale next to those that, four years ago, plagued Cyprus, its second-smallest. Now there is cause for cautious optimism. This month Bank of Cyprus, the biggest local lender, finished repaying €11.4bn ($12.2bn) of emergency liquidity assistance from the country’s central bank. It followed that by returning to the bond markets, raising €250m in a sale of unsecured notes, albeit with a stiff 9.25% coupon.
Even better, on January 19th Bank of Cyprus listed on the London Stock Exchange. This, says John Hourican, the chief executive, fulfils a promise to investors in 2014, when the bank raised €1bn of equity, to list on “a liquid, index-driven European exchange”. It is quitting the Athens bourse, now that it “no longer has any business of significance in Greece.” (Its listing in Nicosia remains.) It has also rid itself of operations in Romania, Russia, Serbia and Ukraine. Although its return on equity is still meagre, just 2.7% in the third quarter, its ratio of equity to risk-weighted assets, a key gauge of strength, is respectable enough, at…Continue reading