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The Bank of Cyprus is winding down its business operations in Russia and intends to sell the 80% shareholdings in Uniastrum Bank and Uniastrum Leasing that it owns this year, according to Russian information agency RBC.
The exit from Russian market reflects the new strategy of the Bank of Cyprus and its reaction to the economic crisis in Russia, the agency said.
Since the fourth quarter 2014, bank’s activities in Russia have been classified as being in the "disposal group" and intended for sale, according to the annual financial statements of the bank. Its Russian assets - 80% of Uniastrum Bank and Uniastrum Leasing - are planned to be sold within a year.
The minority shareholders of Uniastrum Bank, Gagik Zakarian and Georgiy Piskov, (each owning 10% of shares) said they did not plan to buy the shares held by the Bank of Cyprus. They refused to comment on whether Bank of Cyprus is in talks with anyone to sell its stake.
Last year, the bank incurred losses of EUR 299.2 million from its Russian operations.
"In light of the deteriorating economic conditions since mid-December 2014, Bank of Cyprus began an assessment of its operations in Russia, and increased the level of provisions for impaired loans and other assets", the bank said in recent financial statements.
The loan portfolio of Uniastrum Bank, according to the annual report, amounts to EUR 966 million, while the deposit portfolio is worth EUR 546 million.
Bank of Cyprus is not just exiting the Russian market. In 2014, the group sold its business in Ukraine and Serbia, as well as part of its Romanian portfolio. The Group is at the moment present in three foreign countries - Greece, Russia and Romania.