Bailed out Cyprus may use ‘bad bank’ for assets

The bailed-out Bank of Cyprus is reviewing its restructuring plans in a move that could result in billions of euro of its troubled assets being put into a “bad bank”, chief executive John Hourican said.

He took the top job at Cyprus’s largest bank in October after it was rescued during an international bailout of the island, which had run into financial problems partly because of the exposure to debt-laden Greece.

At that time, a plan to put the bank’s €22bn of good and bad loans into one legal entity was just being finalised. This plan also envisaged the bank remaining reliant on some emergency funding from the central bank of Cyprus until 2017.