THURSDAY, 26 APR 2018

 

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Korneliou to UN: The Cyprus Problem Must Be Resolved

Eni’s CEO: We will not Give Up our Rights in Block 3

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Cyprus Banks: Facts and Figures

Cyprus Banks: Facts and Figures

Cyprus had always enjoyed a flourishing banking sector but, after joining the EU in 2004, its attractiveness as a base for holding and finance companies, and the significant increase in the number of foreign trading companies and regional headquarters setting up in Cyprus, substantially increased the demand for banking services.

This sparked the rapid liberalisation of a once tightly controlled banking system and it was not until the global financial crisis hit that the consequences of risky expansion strategies, imprudent lending and weak bank governance suddenly became clear.

Incredibly, some banks then made the fatal decision to expand further by investing €5.7 billion in Greek bonds. The risk had been grossly underestimated and when the debt haircut on Greece left Cypriot banks facing staggering losses of around €4.5 billion, little could be done.

Cyprus became the fifth EU member state to request a financial assistance package from the Troika of international lenders and, as part of the terms of the €10 billion bailout agreement in 2013, it was bound by a Eurogroup decision to set the controversial eurozone precedent of imposing losses on large depositors in two of its major banks, Bank of Cyprus and Laiki Bank.

The so-called bail-in, which entailed a haircut of 47.5% imposed on uninsured (over €100,000) deposits, was used to recapitalise Bank of Cyprus, which took over most of Laiki’s assets and debts, including €9.2 billion in emergency liquidity assistance (ELA).

In 2009, Cyprus’ banking sector was equivalent to nine times the country’s GDP; over the past two years, however, it has been brought much closer to the EU average of 3.5 times GDP.

There are at present 56 authorised credit institutions in Cyprus, made up of 4 banks (with a fifth – Ancoria Bank Ltd – expected to be granted a licence shortly), 18 cooperative credit institutions, 4 subsidiaries of banks in EU member states and 3 in non-EU countries, 9 branches of banks in EU member states and 16 in non-EU countries, plus 2 representative offices.

In the following list, we present the facts and figures of seven major banks in Cyprus, evidence that the country has already made good headway in establishing a smaller, stronger and safer banking sector.


Note: The information in this listing was correct at the time of publication in Gold magazine, February-March 2015

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