(19 December 2011 — Australia) Bendigo and Adelaide Bank have bought Bank of Cyprus’s Australian branch network for just A$130 million in another sign of how desperate the European financial system is at the moment.Its 14 branches in Victoria, New South Wales and South Australia were not struggling but in fact doing quite well, judging by Bendigo and Adelaide’s presentation. The Australian network just was not integral to a bank that, in spite of its Hellenic history, has nearly half of its branch network in Russia and the Ukraine.
Bank of Cyprus’s sale is a textbook example of how European banks are being forced to part with the lesser jewels of their tarnished crowns as the debts incurred by governments and the private sector weigh them down.
Last month the parent bank announced it was raising €400 million from a rights issue, and converting €600 million of other securities as part of moves to strengthen its capital base in time to meet requirements for European banks to lift their Tier 1 capital ratios to 9 percent by 30 June next year.