A one-time senior Bank of Ireland executive, Nick Fahy, is working on a plan to float the former UK unit of Bank of Cyprus on the London Stock Exchange in three years' time.
Bank of Cyprus, one of the largest casualties of the euro zone financial crisis, which was forced by the country's bailout masters in 2013 to convert almost half its uninsured deposits into equity, sold its UK business last November for £107 million (€124.3 million) to four British entrepreneurs. They renamed the business Cynergy Bank.
Mr Fahy, the UK lender’s chief executive of almost 3½ years, has told The Irish Times that he has been tasked with building the bank’s loan book from about £2 billion currently to £6 billion by 2022.
"The four-year plan sees an IPO (initial public offering) in 2022, subject to market conditions," said Fahy, who spent 17 years with Bank of Ireland until late 2014.
At Bank of Ireland, Mr Fahy held a number of senior roles, including managing director for Northern Ireland, which included responsibility for its UK Post Office financial services operation, and chief operation officer for the group's retail banking business in the UK and Ireland.
Boost
Set up in 1955 as Bank of Cyprus UK, some 70 per cent of Cynergy Bank’s loan book is currently out to between first- and third-generation Cypriots and is focused on medium-sized businesses.
Bank of Cyprus, led for more than five years by fellow Irishman John Hourican, said last year that the sale of the UK business would boost the group's capital levels. Mr Hourican is set to leave the bank in September to join UK consumer credit group NewDay.
The consortium that acquired the former Bank of Cyprus UK is made up of Pradip Dhamecha, co-owner of a British cash and carry business, Balbinder Sohal, chairman of property investor Seven Capital, and brother and sister team John Coulter and Ann Jones, who own the jewellery group Warren James.
Outside investment
While the new owners plan to provide capital to fund the group’s growth over the coming years, Cynergy Bank may seek outside investment ahead of an IPO.
“The existing shareholders plan to provide capital for the life of the strategy, but the later stages of the strategy could be funded from the capital markets if that is advantageous,” said Mr Fahy.
Cynergy Bank’s business is centred around three areas: business banking to help medium-sized firms grow; private banking for the personal and family needs of entrepreneurs; and property investment for wealth building and retirement planning of customers.
“We plan to offer a fourth pillar in due course offering fintech services to support efficient business growth of medium business, such as payroll,” said Mr Fahy.
The chief executive said that while the bank’s medium-term strategy is based on growing organically, the business may take part in an expected continuation of mergers and acquisitions activity among so-called UK challenger banks. “We’d prefer to be a consolidator in due course,” he said.
