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Private sector deposits in Cyprus banks tick down in Feb -ECB

The European Central Bank cut all its policy rates and promised more liquidity for banks in a move that fostered even more demand for high-risk assets

Private-sector deposits declined slightly in Cypriot banks in February, but still reflected broad stabilisation after 18 months of falls starting in June 2012.

Big account holders in the two largest lenders on the eastern Mediterranean island were forced to take a hit as part of an international bailout last year.

Private-sector deposits fell by 1.4 percent to 34.4 billion euros ($47.42 billion) in February from the previous month, European Central Bank data showed on Thursday. The deposits are about 32 percent below their peak of 50.5 billion euros in May 2012.

Banks in the euro zone member state were shut for nearly two weeks last March after Cyprus agreed a 10-billion-euro bailout under which major depositors had to pay part of the cost of the rescue. Capital controls are still in place, with limits on how much people can transfer from their accounts, although Cyprus is gradually easing the restrictions.

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

In Italy, private-sector deposits rose by 0.2 percent but they fell by 0.2 percent in Greece and by 1.3 percent in Portugal.

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.

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