Cyprus Mail

Private-sector deposits in Cypriot banks slide in August -ECB

Consumers and companies continued to withdraw deposits from banks in Cyprus in August, where big account holders in the two largest lenders were forced to take a hit as part of an international bailout.

Private-sector deposits fell by 2.1 percent to 35.9 billion euros after a 2.4 percent fall in July, European Central Bank data showed on Wednesday.

They had peaked at 50.5 billion euros in May of last year and have now lost almost 30 percent of the private-sector deposit base in just 15 months, hitting the lowest level since June 2008.

Banks on the island were shut for nearly two weeks in March after Cyprus agreed a 10-billion-euro bailout, which forced major depositors to pay part of the cost of the rescue.

Capital controls are still in place on the island, with limits on how much people can transfer from their accounts. Cyprus is gradually easing the controls.

The data showed that deposits in other southern European countries mired in the debt crisis remained relatively stable.

Private-sector deposits fell less than half a percent in Portugal in August. They were flat in Greece and up slightly in both Italy and Spain.

Monthly fluctuations in the figures are common, though sharp consecutive drops in countries with stable banking systems are unusual.

The data, which are for all currencies combined, are not seasonally adjusted and differ slightly from national central bank figures. They exclude deposits from central government and banks. (R)

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