By Alkman Granitsas and Michalis Persianis 

NICOSIA, Cyprus--Shareholders at Cyprus's biggest lender, Bank of Cyprus, overwhelmingly approved a new board of directors on Thursday that includes a number of heavyweight international financiers, part of the bank's efforts to recover from the island's near fatal financial crisis last year.

The new board, which was approved by some 99% of shareholders, comes after the bank's EUR1 billion ($1.25 billion) capital hike this summer and reflects, in part, the new ownership structure of the lender following that increase.

Swiss-born banker Josef Ackermann, who served a decade as head of German banking giant Deutsche Bank AG and, until last year, was chairman of the Zurich Insurance Group AG--was appointed as chairman of the board.

Billionaire distressed asset investor Wilbur Ross, whose company took up about 40% of the recent share increase, was also appointed as director, while BoC's current chief executive and board member, John Hourican, formerly with the Royal Bank of Scotland, was re-appointed. The new board also includes a representative from the European Bank of Reconstruction and Development, which committed 100 million euros to the capital hike and now controls a little over 5% of Bank of Cyprus.

Analysts say that the appointment of Mr. Ackermann, who is seen as one of Europe's most respected bankers, is meant to confer an air of reputability to a bank that only a year ago appeared to be teetering on the verge of collapse. In March 2013, the bank only narrowly survived Cyprus's financial crisis when it was recapitalized with depositor money as part of a controversial EUR10 billion international bailout for the island, which also led to the introduction of capital controls--a first for a eurozone country--to rescue Cyprus's financial sector.

Apart from seizing its own depositors' money, BoC was also forced to absorb the loss-making number two lender, Cyprus Popular Bank, or Laiki, which left it on the hock for some EUR9 billion worth of emergency cash lending from the European Central Bank. The financial crisis pushed Cyprus into a deep recession that, among other things, have led to a collapse in the island's overinflated property market and a concurrent spike in non-performing loans.

Although the bank is still struggling with those bad loans, since taking office late last year Mr. Hourican has moved to restructure the lender, shedding non-core assets and championing the recent capital increase with foreign investors--over the objections of his own depositor-cum-shareholders. Two of the bank's biggest Russian investors, who became involuntary shareholders in the bank during the bail-in, remained on the board with shareholders reappointing Russian oligarch Vladimir Strzhalkovskiy. Also voted to the board was a representative of the Renova Group, controlled by Russian billionaire Viktor Vekselberg.

But the cash infusion helped BoC squeak past the ECB's recent stress test last month and, in another sign of renewed confidence, the bank aims to relist its shares in early December after they were suspended in July 2013 in the aftermath of the financial crisis. Cyprus's government has said it hopes to lift the last capital controls by next year.

John Letzing

in Zurich contributed to article

Write to Alkman Granitsas at alkman.granitsas@wsj.com

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