S&P shifts Bank of Cyprus view to positive

S&P said it revised the outlooks for Bank of Cyprus PCL and Bank of Cyprus Holdings PLC to positive from stable and affirmed the B+ and B- ratings, respectively.

The Bank of Cyprus plans to sell sale of €577 million nonperforming exposures and €121 million of foreclosed assets.

The outlook revision primarily reflects the view that BoC's risk profile should materially improve because of the announced sale of problem assets, the agency said.

“The bank's efforts to reduce its tail risks from the 2008 credit crisis and reduce the asset quality gap with higher-rated international peers should result in an NPE ratio of about 9% on a pro forma basis following the transaction, compared with 25% at end-2020. At this level, BoC will be better positioned to cope with potential increases in NPEs stemming from the Covid-19 pandemic, in our view,” S&P said in a press release.

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