Central Bank opens the way for liquidation of former Laiki bank

Central Bank of Cyprus (CBC) has filed an application to the Nicosia District Court for the liquidation of former Laiki Bank, more than seven years after the bank’s consolidation process started, following Eurogroup decisions in 2013.

CBC Governor Constantinos Herodotou told Parliamentary Committee on Finance on Monday, that the Central Bank submitted the request to the Court of Nicosia on 8 January  2021 and that the beginning of the liquidation process now depends on the Court.

He also said that the completion of the sale of Laiki subsidiaries in Greece, which took place in July 2019, opened the road for the application for the liquidation.

Herodotou noted that the available assets of former Laiki amounted to €232 million at the end of September 2020, including €140 million received from the sales of the former Laiki assets so far, compared to €663 million which was in 2013 based on a valuation by KMPG. However, he added that the bank’s assets in 2013 were €800 million, according to another valuation on behalf of the Association of Laiki Depositors (SYKALA).

He furthermore pointed out that his personal goal as well as the goal of former’s Laiki Resolution Authority, was the depositors to get as much as possible from the liquidation.

Explaining the next steps, the Governor said that the Court should examine the application and accept CBC’s proposal for the liquidator, in order for the process to begin.

Responding to criticism on delay of the process, he said that although he understands the creditors of the former Laiki, the process of selling the subsidiaries of the bank in Malta, Greece, Serbia, Russia and Ukraine was complex and time-consuming, as supervisory approvals had to be given, while in Malta and in Greece there were also requests for arbitration.