Alantra advised Hellenic Bank on the acquisition of €10.3bn of assets and liabilities of the Cyprus Cooperative Bank

Jun 2018

Buy-side advisory

Alantra has acted as sole financial adviser to Hellenic Bank (“HB”), the 3rd largest financial institution in Cyprus, in the full design, structuring, and execution of the acquisition of the clean banking business of the second largest bank in the country, the Cyprus Cooperative Bank (“CCB”). The acquisition comprises a balance sheet with a total size of €10.3bn, 73 branches and 1,100 employees. This transaction represents the creation of a co-leading retail and commercial bank in the country with market shares of c.22% performing loans and c.32% in deposits. HB gains access to a c. 400,000 customer base (50% of the Cypriot population are CCB customers).

The transaction has been structured as an asset deal, in which HB has largely excluded non-performing assets. The perimeter acquired comprises mainly €4.6bn of loans, €4.0bn of Government Bonds and €9.7bn of deposits with a NAV of €247m equivalent to a 13.7% CET1 ratio. HB has received an Asset Protection Scheme (APS) of over €2.8bn of loans, which provides significant downside protection and capital relief. The price paid for CCB has been in line with recent transactions at 0.3x book value.

To fund it, HB will undertake a capital increase of €150m at €0.70 per share, which represents a 23% premium to L3M VWAP, to be subscribed by current shareholders (€100m) and funds managed by international investor PIMCO (€50m).

This transaction strengthens Alantra’s credentials in pure banking M&A and consolidates the firm as one of the leading FIG advisors in Europe. Based on its unrivaled experience in the clean-up of the financial sector in Spain and Portugal, Alantra is now executing transactions in banking and loan portfolios across Southern Europe.