CENTRAL BANK OF CYPRUS CONFIRMS CONVERSION OF DEPOSITS INTO BANK SHARES
According to the Central Bank of Cyprus’s recent statement, 37.5% of all Bank of Cyprus deposit amounts that were above EUR100,000 on March 26 will be converted into bank shares. A further 22.5% may also be subject to the same conversion within 90 days depending on the outcome of an independent valuation of the Bank of Cyprus. Mario Skandalis senior bank official was quoted ahead of the official announcement as describing the likelihood of a total 60% conversion as a “remote possibility.”
The statement also confirmed that a depositor’s total loans and credit facilities will be taken into account in determining whether they have reached the EUR100,000 threshold, whereas deposits on joint accounts will be divided between the individual depositors. The extra 22.5% that may or may not be concerted will continue to be frozen. However, in the case of a beneficial decision from the depositors perspective, the bank may pay retrospective interest on the deposits. These measures do not affect deposits made after March 26.
The statement also confirmed that a depositor’s total loans and credit facilities will be taken into account in determining whether they have reached the EUR100,000 threshold, whereas deposits on joint accounts will be divided between the individual depositors. The extra 22.5% that may or may not be concerted will continue to be frozen. However, in the case of a beneficial decision from the depositors perspective, the bank may pay retrospective interest on the deposits. These measures do not affect deposits made after March 26.
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