500 accept redundancies at Bank of Cyprus, plan extended

However, the plan has been extended by a week as negotiations with the militant trade union Etyk broke off to allow a final appraisal of the haircut on all deposits, including personal savings and the staff provident funds.

The Central Bank of Cyprus is clutching on to the restructuring plan submitted by KPMG, while the government is also trying to convince the central bank to allow a lower final haircut on deposits, below 50% and even closer to 40%.

The conclusion of the haircut saga, created after the Eurogroup’s demand for a bail-in to pay for the rescue of the Bank of Cyprus that was burdened with the bankrupt Popular Laiki, will also put an end to uncertainty in the market that has been hampered by capital controls and cash flow in the market drying up.

Also, depositors will know what amount will be returned to them and in what form, cash, bonds or shares.

Etyk had called for a two-hour strike on Friday in order to force the bank to improve its offer, but it came under a barrage of criticism from all political parties and stakeholders on the poor timing of the strike amid the worst economic crisis this country has seen since the 1974 war.

In the redundancy package, the bank has offered a bonus of 5+2 monthly wages, settling of all staff loans and dues before cashing in their provident fund, and other benefits not exceeding 150,000 euros, while the trade union is also chipping in from its coffers with 15 mln euros, that works out at an additional 10,000 euros per redundant staff.