Bank of Cyprus to Acquire €150 Million Loan and €500 Million Deposit Portfolio from Cyprus Development Bank

Bank of Cyprus has reached an agreement with Cyprus Development Bank for the acquisition of a portfolio comprising performing loans, deposits, and other assets and liabilities, with the transaction reportedly taking place at a price close to the nominal value of the assets. Under the terms of the agreement, the portfolio includes performing loans of approximately €150 million and deposits of roughly €500 million, based on a reference date of December 31, 2025.

The move forms part of Bank of Cyprus’ broader strategy for targeted growth, which management has highlighted in previous statements. The transaction has been described as “small in size and low-risk, which accelerates organic growth without a substantial impact on capital and without affecting dividend policy.” On the balance sheet, the deal strengthens Bank of Cyprus’ performing loan portfolio while simultaneously improving liquidity through a net inflow of deposits. The announcement notes that, following anticipated synergies, the transaction is expected to have a moderate positive effect on results, with a limited capital impact of around 35 basis points.

Support for the agreement comes from the majority of Cyprus Development Bank shareholders, as irrevocable commitments have been secured from those representing approximately 96% of the issued share capital to vote in favor of the transaction at an extraordinary general meeting. Completion of the transaction remains contingent on shareholder approval, the signing of the relevant agreements, and the receipt of required supervisory authorizations, with the timeline set for the second half of 2026.

The acquisition is intended to bolster the medium-term growth of Bank of Cyprus’ performing loan and deposit portfolio. In facilitating the deal, KPMG Limited served as financial advisor, while Hadjianastassiou Ioannides LLC provided legal guidance on the implementation of the agreement.

By fLEXI tEAM