(Adds potential size of capital issue and advisers)
NICOSIA, June 27 Bank of Cyprus, a lender forced
to use depositors' savings to recapitalise itself last year, is
examining funding and capital options with advisers, it said on
Bank insiders, and a person familiar with the matter, said
the bank was looking at a potential capital issue of between 500
and one billion euros, but the timing and the precise amount was
The bank said it was assessing potential investor interest
and would make a further announcement "when and if there is
further tangible progress".
The bank said the capital proposals sought to expedite the
implementation of the Group's restructuring plan in tandem with
the further strengthening of the Group.
HSBC and Credit Suisse were advising the bank.
The biggest Cypriot lender was forced to convert a large
portion of client deposits to equity last year when
international lenders refused to shore up the bank.
The process, known as a "bail-in", marked the first time in
the history of the euro zone debt crisis that distressed banks
used client funds to recapitalise, instead of EU tax payers.
Based on its first-quarter results, Bank of Cyprus had a
core tier 1 capital, a ratio of financial strength, of 10.4
percent, increasing slightly to 10.6 percent from the disposal
of Serbian assets in May.
Under stress test baseline scenarios it should exceed 8
percent, and in an adverse scenario 5.5 percent.
The Cypriot bank is one of more than 100 across the euro
zone which will be assessed by regulators under simulated
conditions of financial stress.
(Reporting by Michele Kambas; editing by Jason Neely and Elaine