Bank of Cyprus Holdings PLC obtained ECB approval for the significant risk transfer benefit from the proposed sale of its €2.7 billion nonperforming loans portfolio, dubbed Project Helix.
The deal, which was disclosed August 2018, remains subject to various outstanding conditions and is expected to complete early in the second quarter, resulting in a positive impact of 160 basis points on the bank's capital ratios due to the release of risk-weighted assets.
The transaction has reduced the Cypriot lender's nonperforming exposures and improved its NPE ratio to 36% from 47% based on its preliminary 2018 results. The pro forma NPE provisioning coverage ratio for the deal is 47%.
Bank of Cyprus' phased-in common equity Tier 1 ratio and total capital ratio, pro forma for both legislation amendments and Project Helix, stood at 15.4% and 18.3%, respectively, at the end of 2018.