Bank of Cyprus Holdings (BOC) has signed a binding agreement to sell its wholly owned subsidiary bank in the UK, Bank of Cyprus UK (BOC UK) and its subsidiary Bank of Cyprus Financial Services to Cynergy Capital.
Together BOC and its subsidiaries shall be referred to as the “group”.
The sale, consideration set at £103m, is expected to be completed by the end of 2018 and is subject to approval by the regulators of both the group and BOC UK.
The consideration is payable in cash, of which half is deferred over 24 months from completion, without any performance conditions attached.
Following completion, BOC UK is expected to be rebranded to “Cynergy Bank”.
The decision to sell the UK division of the bank and its financial services arm is in line with the group’s strategy of “delivering value for shareholders and focusing principally on supporting the growing Cypriot economy”.
Further to this transaction, the group and BOC UK will sign a cooperation agreement, which will see both organisations cooperating in a number of key areas going forward, including continuity of servicing for existing customers.
Cynergy is led by a consortium comprising of Pradip Dhamecha (OBE), Bal Sohal, John Coulter and Ann Jones.
The consortium investors are experienced business owners in the UK, focused on the retail and SME sectors. They have worked together for several years and have a number of business interests and investments, in a variety of sectors including retail, wholesale, property and financial services.
Nick Fahy, chief executive of BOC UK, said: “This is a positive development for the UK bank. The sale to Cynergy will enable us to focus on growing our franchise across enterprising business owners and savers in the UK, including the underserved property and SME market.”
Bal Sohal, director of Cynergy added: “We have been actively looking to invest in the UK banking sector, where we see significant opportunities for growth and to better address the needs of small businesses in the UK, including those of the Cypriot community.
“Cynergy’s focus will be on delivering sustainable growth for the UK bank. We plan to support the existing management team to deliver on the strategy it has for the bank and are committed to investing further capital to develop the business in the coming years.”