Bank of Cyprus edges towards normalization

Under a decision by the Eurogroup for a €10 billion financial assistance package to Cyprus, the CPB, Cyprus` second largest lender, will be wound down. Its good part (assets and insured deposits, that is, deposits below €100,000) will be folded to BOCY, the island`s largest lender, whose uninsured deposits (over €100,000) have already been converted by 37.5% into class A shares in a bid to contribute to the Bank`s recapitalisation.

Speaking to CNA, Central Bank of Cyprus spokeswoman Aliki Stylianou said that an important step was made late afternoon Monday in the process of the merger of Bank of Cyprus and Cyprus Popular Bank, adding that Bank of Cyprus has acquired a preliminary balance sheet.

According to CBC figures, the initial value of the assets transferred by CPB to Bank of Cyprus amounts to €13.8 billion. However, according to the memorandum of understanding agreed between the Cypriot authorities and the Troika of the European Commission, the European Central Bank and the International Monetary Fund, a more detailed and updated independent evaluation of the assets of the CPB and Bank of Cyprus will be completed by end of June. The evaluation will determine whether additional conversion of uninsured deposits will be converted into shares.

Furthermore, Panicos Demetriades, Governor of the Central Bank, which acts as Banking Resolution Authority, will meet on Tuesday with one of the candidates for the post of the Chief Executive Officer of Bank of Cyprus. So far the CBC has made soundings to three persons with regard to assuming the post.