Laiki Bank, whose healthy part merges into the Bank of Cyprus transferring a debt of 9.2 billion euros, has a history of 112 years. Nobody could imagine that this would be the end of a bank that was lucrative for so many years. Now, nearly eight thousand employees of Laiki in Cyprus and abroad will be unemployed.
The most important milestones in the history of Laiki Bank are presented below:
In 1901, four leading citizens of Limassol, Agathoclis Francoudis, Ioannis Kyriakides, Christodoulos Sozos and Neoklis Ioannides—established the Popular Savings Bank of Limassol to encourage saving among the workforce.
More than two decades later, in 1924, the bank changed its name from the Popular Savings Bank of Limassol to the Popular Bank of Limassol. The bank also became the first company in Cyprus to register as a public-traded company.
Then in 1967, the Popular Bank of Limassol changed its name to Cyprus Popular Bank (CPB) to reflect the bank’s expansion beyond Limassol. Expansion beyond Limassol followed quickly, with the establishment of its first branches in Nicosia, Famagusta (1969), and Paphos and Larnaca (1970). Also in 1970, Midland Bank acquired 22% of the company’s shares, making Midland a major shareholder in CPB. The next year CPB relocated its headquarters from Limassol to Nicosia.
During the 70’s subsidiary companies were founded. Hongkong Bank bought 21.16% of CPB. In 1974, CPB established its first London branch.
In 1983, CPB acquired all the Cyprus operations of Grindlays Bank located in the area under government control.
In 1992, CPB opened the first branch of European Popular Bank in Athens. CPB owned 58% of the shares of the bank; other shareholders included HSBC (formerly Midland Bank) and Greek and Cypriot investors. CPB retained branches in Heraklion and Thessaloniki.
In 1995, CPB opened its first representative offices in South Africa and in Toronto, Canada.
In 2001, The Laiki Group established a subsidiary in Australia with five branches.
In 2005, the Group established Laiki Bank (Guernsey), and purchased Bank Centrobank in Serbia.
In 2006, the Greek Marfin Investment Group acquired HSBC’s shares in Laiki Bank, establishing a strong minority share position. Subsequently, the Marfin Investment Group through more acquisitions managed to take control of Laiki Bank, which it re-branded as Marfin Popular Bank. In Greece, the Marfin Group consolidated Egnatia, Laiki and Marfin to form Marfin Egnatia Bank, which is the 95%-owned Greek subsidiary of Marfin Popular Bank.
In 2007, the bank announced the planned takeover of 50.12% of the share capital of AS SBM Pank, a bank in Estonia. MPB also acquired 99.2% of the shares of Marine Transport Bank Ukraine for US$156 million. This bank was founded in 1993 as Marine Trade Bank and changed its name to Marine Transport Bank in 1996. It has its headquarters in the Odessa region and has 86 branches. Lastly, MPB acquired 43% of the share capital of Lombard Bank Malta for €48 million from BSI of Lugano. CPB now holds c. 49% of Lombard Bank Malta.
In 2010, the Fianacial Times magazine “The Banker” chose Marfin Egnatia Bank as The Bank Of the Year in Cyprus.
In 2011, MPB sold the majority of its shareholding in its Estonian subsidiary and returned to its historic name of Cyprus Popular Bank (CPB).
In 2012, CPB converted its Greek subsidiary into a branch of the parent bank.
In the years 2012–2013, the Cypriot financial crisis resulted in financial difficulties at CPB. The Cypriot state recapitalized CPB on June 30, 2012 resulting in the government acquiring 84% of the bank’s equity. This increased the bank’s core tier 1 capital ratio towards 9%, the level mandated by the European Banking Authority.
In early 2013 CPB renamed its Greek branches to CPB Bank and on March 26, the bank sold them to Piraeus Bank. Laiki is due to be shuttered with immediate effect.
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