The Bank of Cyprus in Romania is likely to remain closed in the coming days and a solution should be found to finalize the transfer of its assets to Romanian jurisdiction, according to banking sources, quoted by local news agency Mediafax.

Bank of Cyprus branches in the country originally closed on April 1, as the bank tried to find a buyer for its Romanian subsidiary. Since that date, the closure period has been extended, with the most recent deadline for re-opening passed today (April 23 ).

The Cyprus Central Bank previously rejected offers - reportedly worth less than EUR 100 million - submitted by Romanian lenders Banca Transilvania and Raiffeisen Bank Romania for the takeover of the Romanian subsidiary of Bank of Cyprus. The Cypriot central bank then continued to look for alternatives to transfer the deposits of the Bank of Cyprus’ Romanian subsidiary, which are governed by Cypriot law.

Deposits in Romania are currently under EUR 100 million, according to Mediafax, quoting sources on the local market. The two offers submitted by Banca Transilvania and Raiffeisen Bank Romania were deemed too low in comparison to the target value for Bank of Cyprus Romania assigned by the committee in charge of restructuring the banking system in Cyprus.

Bank of Cyprus’ assets for its Romanian subsidiary are around EUR 450 million, out of which EUR 350 million are loans. One of the largest loans granted in Romania is the EUR 100 million lent to the company which owns the JW Marriott building, which is due for repayment in 2017. Real estate financing makes up over half of the remaining loans on the balance sheet.

The bank’s ATMs have been available for withdrawals and so far, EUR 3 million has been withdrawn, according to Mediafax.

Bank of Cyprus only holds 0.7 percent of the banking assets in Romania. As it is a subsidiary of a European Union bank, deposits are guaranteed via the guarantee scheme in its home country, Cyprus. Romania’s Central Bank Governor Mugur Isarescu last week said the two Cypriot banks in Romania only have 1.3 percent of the banking assets in the country.

The move to sell Bank of Cyprus Romania was demanded in the wake of the banking crisis in Cyprus, after which an agreement with the EU, the European Central Bank (ECB) and the International Monetary Fund (IMF) on the terms of a bailout for the country was eventually reached.

editor@romania-insider.com