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BoC releases frozen deposits worth €900m

Bank of Cyprus (BoC) on Thursday announced the release of some €900 million that were held in fixed-term deposits, blocked following the lender’s recapitalisation last year.

The €900 million concerns the six-month time deposits that matured on January 31.

BoC chairman Christis Hassapis said the decision was made after consultations with the finance ministry and the Central Bank (CBC).

“The determining factors were the significant improvement of the bank’s liquidity that has been observed in recent months, and the signs of stabilisation displayed by the deposit base,” Hassapis said.

With this decision, he said, BoC wanted to reciprocate the trust shown by depositors and rise to the expectations of society by boosting liquidity in the real economy.

The finance ministry and the Central Bank described the release as a “very important” decision that will help the banking sector.

“This move by the Bank of Cyprus indicates that our banking system is on the course to stabilisation and will help strengthen the confidence of the public and investors in our banking system,” they said in a joint statement.

The deposits are subject to the same capital controls that apply to all other funds.

Following a 47.5 per cent write-down – or haircut – on uninsured deposits to recapitalise the bank, the remaining 52.5 per cent was ordered frozen by the CBC.

These six-month time deposits account for one-third of the frozen funds.

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