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31.01.2014 - 21: 01

BoC unlocks 950 million euros, are on 6-month deposit

Bank of Cyprus (Bank of Cyprus), contrary to the opinion of the "troika" of international creditors formally announced his decision to unlock 950 million euros, are redeemable on January 31 6-month deposit.

As the chairman of the board of directors of the largest on the island of the credit institution Christis Hasapis, this step was "the result of consultations with the Ministry of Finance and the Central Bank of Cyprus."

"The determining factor in this particular decision was the significant improvement in the liquidity of the bank in the past few months and that there was evidence of stabilization of its deposit base," - said Hasapis.

According to him, the decision of the bank's board of directors is responsible for the trust shown by its depositors, and implements public expectations in regard to support liquidity in the real economy.

Ministry of Finance and the Central Bank of Cyprus also issued a joint statement in which they stressed that the decision of the Bank of Cyprus "suggests that our banking system is on the way of stabilization." "This step will help to strengthen public confidence and investors in the banking sector of the country," - said in a statement.

Official announcement of the unlocking 6-month deposit was made after intensive talks on Wednesday with the bank's management representatives arrived on the island the "troika" of creditors (European Commission, European Central Bank and International Monetary Fund). Previously, the newspaper "Sayprus Mail" reported that lenders are skeptical of such an action in the face of continuing instability of the financial situation in the country. However, they can not directly forbid to do it, as such a move is entirely within the jurisdiction of the Bank of Cyprus, which was released from under the external control in the summer of last year.

Bank of Cyprus was the first bank in the EU, for the restructuring of which the authorities have resorted to forced fundraising large depositors for its recapitalization as a result of the agreement reached in March 2013 year from the EU and IMF creditors on the terms of receiving assistance in the amount of anti-crisis 10 billion euros. In July last year, the bank actually copied 47,5% of deposits in excess of 100 thousand. Euro exchange them for shares. The remaining funds were frozen. Some of them were placed on deposit at various periods of time - to 6, 9 12 and months. And the Bank of Cyprus has the right to unilaterally extend once every deposit for another term without the customer's wishes. However, the bank's management has decided not to exercise this right in respect of the six-month deposit expiring 31 January.

About half of the major contributions to the Bank of Cyprus belonged to non-residents of countries outside the EU, primarily - from Russia. Through a process of recapitalization of the bank's board of directors included a group of Russian businessmen rightly major contributors. At the moment of the members of the Board of Directors 15 5 - representatives of Russia.

Unlocked means will not be able to leave the island as soon fall under the same restrictions, which since the end of March last year apply to all funds in Cypriot banks. Capital controls on the island was introduced to prevent the withdrawal of funds from the banking system and its transfer abroad.

A source:

Tags: Economy, banks, deposits, Central Bank, the IMF, the ECB