Cyprus Development Bank

Cyprus Development Bank
Κυπριακή Τράπεζα Αναπτύξεως

Type	Public
Industry	Finance
Founded	1963
Headquarters	Nicosia, Cyprus
Area served	Cyprus
Key people	Andri Georghiou (CEO), Kyriacos Christofi (Chairman)
Products	consumer banking, corporate banking, investment banking, mortgage loans, private banking, wealth management
Subsidiaries	Novasys Information Services Investment Bank of Kuban Enalion Environmental Management Centre Cdb Capital
Website	CDB Bank

The Cyprus Development Bank (CDB), (Κυπριακή Τράπεζα Αναπτύξεως), was established in 1963 as a public company to promote economic development in Cyprus. Its main shareholders were the Republic of Cyprus and the European Investment Bank.^[1]

Foundation

Established in 1963 by the government of Cyprus, CDB's initial financing activities covered a very broad spectrum of the economy's productive sectors, with emphasis on the fields of manufacturing and industrial processing. Capital was provided in the form of medium and long-term loans as well as equity and venture capital.

History

The Turkish invasion of Cyprus in 1974 resulted in the large-scale displacement of the population, and paralyzed the local economy. The CDB had to write off 47% of its loans and about 30% of its equities. The Government’s Scheme of Arrangement of May 1976 helped CDB restore its credit-worthiness and resume its activities.

After the Turkish invasion, the bank concentrated on supporting viable small-scale manufacturing industries. The CDB restructured its organization and recruited additional staff. Lending operations were directed towards the establishment of export-oriented businesses and the development of tourist facilities. Advisory and project management services were introduced. The Bank’s investment department formed the Cyprus Investment and Securities Corporation (CISCO), which actively supported the Cyprus Stock Exchange. In 1984 a special consultancy division was established to support local entrepreneurs.

Evolution

After 1985, CDB launched its equities and venture capital operations. CDB’s lending portfolio exceeded CYP£20 million, and was distributed among the manufacturing (50%), tourism (40%) and other minor sectors of the economy (10%). IT was an area of intense activity, as the CDB carried out a study on the development of a national IT strategy for Cyprus, co-sponsored with UNDP. Novasys Information Services was established as a CDB subsidiary offering the business community specialized IT services. Novasys undertook the computerization of the operations of various government departments. CDB also established the Cyprus International Institute of Management, a postgraduate business school offering MBA courses.

Photo of cdb building

In 1991, CDB ceased to be 100% government owned, as the European Investment Bank, acquired 5.5% of CDB's share capital. In 1996 EIB’s share capital was increased to 12%.

In 1999 following approval from the Central Bank of Russia, CDB establishmed the Investment Bank of Kuban with headquarters in the Krasnodar region. The new bank was established with the participation of the European Bank for Reconstruction and Development (EBRD) with 25% of the share capital, and the CDB with 75%.

Other regional activities included the CDB’s upgrading and restructuring of the Palestinian Development Fund to become a bank, a project assigned to the CDB by the European Commission.

Banking Licence

In April 2001, the CDB obtained a banking licence from the Central Bank of Cyprus to provide the full range of banking operations in accordance with the existing banking law in Cyprus, including the granting of loans and guarantees of any nature, acceptance of all forms of deposits and performance of foreign exchange transactions

In June 2007, the Government of Cyprus invited expressions of interest on Friday to dispose of its majority stake.^[2] CDB’s assets in 2007 stand at CYP £231 million.^[3] In 2008 the bank was fully privatized and no longer belongs to the Cypriot state.

References