Greece takeover of Cyprus bank branches underway

Greece has already started the ring-fencing of Cyprus-owned bank branches with their takeover “by a Greek banking group” in agreement with the Central Bank of Cyprus.

“This will shield Greece and safeguard all deposits held in Cypriot-owned banks,” Finance Minister Yiannis Stournaras said in Athens on Friday.

Bank of Cyprus and Popular Bank Laiki share about 15 bln euros in deposits and some 24 bln euros of loans in Greece. Together with the smaller Hellenic Bank, they command a 10% market share of loans and 8% of deposits.

However, any takeover would not result in funds reaching Cyprus, but would reduce the need to raise 5.8 bln euros from taxing savings accounts, in order to secure a 10 bln bailout loan from the Eurozone and the IMF.

Earlier, the Cyprus government confirmed that President Nicos Anastasiades and Greek Prime Minister Antonis Samaras discussed “the regulation of the matter of alienating Greek branches of Cyprus banks was confirmed, with the most beneficial terms under the circumstances and with an important benefit for the Cypriot side.”

Reports suggested that Alpha Bank and Piraeus Bank, as well as the state-controlled Hellenic Postbank, were front runners in the takeover of the Cyprus bank’s Greek operations that include a network of 300 branches and 5,000 employees. The biggest lender, National Bank of Greece, has also shown interest.