A CoCo Cyprus bank trade

Easy to forget now that the crisis-spotters have moved on to EM from the eurozone… but we’re almost coming to the first anniversary of the Cypriot bank depositor bail-in.

Of course, that time has sure flown by. The Bundesbank isn’t even shy about proposing wealth taxes in similar crises any more. But it’s also worth thinking about, given that recapitalisation (and thus, risk in different parts of a bank’s capital structure) is still very much a theme in European bank investing.

Plus, though ordinary Cypriots are still angry about the implosion of the country’s two biggest banks, in that last year or so the country’s economy has probably contracted by less than the double-digit decline expect. Exchange controls and the deposit freeze at Bank of Cyprus have also been (very gradually) lifted over time.

Which is why it’s interesting to look at a trade recently in a Cypriot bank which didn’t see investors get bailed in: Hellenic Bank.