Bendigo & Adelaide to Buy Bank of Cyprus’s Australian Unit

Bendigo & Adelaide Bank (BEN) Ltd., a regional lender, agreed to buy Bank of Cyprus Plc (BOCY)’s Australian unit for A$130 million ($129 million), expanding its reach into the local Greek and Cypriot communities.

The Bendigo, Australia-based bank will sell A$120 million of shares at A$8.45 apiece to fund the acquisition, it said in a statement today. Trading of the lender’s stock, which closed in Sydney yesterday at A$9, has been halted until Dec. 19 for an announcement of the results of the sale.

Bank of Cyprus Australia Ltd. has 14 branches in New South Wales, Australia’s most populous state, as well as Victoria and South Australia, according to Bendigo & Adelaide. The Hellenic lender’s unit has interest-bearing assets of A$1.4 billion. The acquisition is due to be completed by the end of February, 2012, subject to regulatory approval.

“BOCAL is an attractive business with a strong capital and liquidity position,” Mike Hurt, Bendigo & Adelaide group managing director, said in the statement. “It is predominantly funded by retail deposits, maintains a conservative risk profile with 99 percent of the loan book secured against property, and has an excellent credit history.”

The sale of its Australian unit is in line with plans by the Bank of Cyprus to strengthen its capital position and its liquid funds, the Nicosia-based bank said in an e-mailed statement today.

“A positive impact of around 77 million euros ($100 million) is expected on the Bank of Cyprus’ capital buffer as calculated in the capital exercise carried out by the European Banking Authority and the Central Bank of Cyprus,” according to the statement.

Cyprus’ largest lender needs to raise 1.56 billion euros to meet capital rules set by the European Banking Authority. The regulator has ordered European banks to reach a 9 percent target for core Tier 1 capital after marking their holding of sovereign debt to market prices.

To contact the reporter on this story: Jacob Greber in Sydney at

To contact the editor responsible for this story: Chitra Somayaji at

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