The National Development and Social Fund would soon sign a promise of sale for the Cyprus Popular Bank shareholding in Lombard Bank but it had no intention of retaining the shares, sources have told the Times of Malta.

The Cyprus bank has been under increasing pressure by the authority set up to administer its affairs to sell its 49 per cent shareholding by summer 2018, a deadline imposed by the European Central Bank and the European Banking Authority so it can settle its dues with both depositors and shareholders.

However, the share sale, set in motion in March 2016, was held up after the bidders shortlisted from the original 20 were not given access to the bank’s confidential financial information, meaning they could not confirm their non-binding offers.

No reason was ever given to them for this, and the sale purchase never materialised.

Fund had no intention of keeping the shares

With the deadline looming and Cypriot depositors and shareholders clamouring for their money, sources close to the negotiations said the National Development and Social Fund, which administers the cash raised through the Individual Investor Programme, was approached to consider if it could intervene to resolve the impasse by buying the shares.

It only emerged now, however, that the development fund had no intention of either keeping the shares or running the bank.

The sources that spoke to this newspaper were not in a position to confirm what price the fund was paying the Cyprus bank or whether the offer was less than that of the previous bidders.

“Once the Maltese fund has the shares in hand, then the Cypriots are able to resolve their own issues and the clock is no longer ticking.

“So, the ECB and the EBA will also be appeased,” the sources pointed out.

“However, one thing must be stressed. The acquisition by the fund would still be subject to the approval of the local and European banking regulatory authorities.”