Hellenic Bank Elects to Make a Partial Withdrawal of Assets Under the Asset Protection Scheme

21 December 2020

Hellenic Bank Public Company Limited (the “Company”) announces that it has elected to withdraw certain assets from the asset protection scheme (the “APS”) provided under the provisions of the asset protection scheme agreement entered into between Cooperative Asset Management Company Ltd (formerly Cyprus Cooperative Bank Ltd) and the Company on 03 September 2018, as amended (the “APS Agreement”).

Under the APS Agreement, within 30 days following the second anniversary, the Company has the option to elect to either:

  1. withdraw APS Assets of aggregate Asset Reference Value €250 m (or more) from the asset protection scheme (Asset Reference Value being the covered amount under the terms of the APS Agreement), or
  2. pay the Republic of Cyprus (the “RoC”) the First Election Fee (as defined in the APS Agreement) of €17 m, or
  3. make a partial withdrawal, in which case the Company is required to pay the RoC the relevant proportion of the First Election Fee.

Following a thorough assessment of the portfolio covered by the APS, the Company has elected to withdraw certain assets, consisting of loans, of Asset Reference Value of €184 m  (the “Withdrawn Assets”) and has proceeded with a payment of €4,5 m in respect of the relevant fee, which is a proportion of the First Election Fee to the RoC.  

It is noted that the Company had already paid the €15 m to the RoC in 2019 in accordance with the terms of the APS Agreement. The Company will also have the option to withdraw assets from the APS following the third anniversary of the Completion date (in 2021) or pay to the RoC the Second Election Fee. 

The removal of the Withdrawn Assets from the APS will result in an increase in the Company’s risk weighted assets by an estimated €64,5 m and the liability already booked against all fee payments (€12,5 m) will be reversed and released via the Company’s Income Statement. Furthermore, the impact on the Company’s regulatory capital position will be insignificant. The APS asset withdrawal will be appropriately recorded in the Company’s Financial Results for the fourth quarter of 2020.