NICOSIA Jan 30 Cypriot lender Bank of Cyprus
will release 950 million euros ($1.3 billion) in time
deposits frozen under a recapitalisation arrangement last year
which bailed-in its own depositors, it said on Thursday.
It is the first major release of funds since the Cypriot
bank seized 47.5 percent of uninsured deposits exceeding 100,000
euros and converted them into equity, giving its clients,
including many wealthy Russians, a stake in the bank.
Part of the remaining amounts were placed in 6-, 9- and
12-month time deposits, with the bank maintaining the right to
renew them automatically. The six-month time deposits mature on
An "improving liquidity position" and "stabilising signs of
its deposit base" were the decisive reasons that deposits were
released, the bank said.
Bank of Cyprus is to date the only bank in the euro zone
which used its own clients' savings to recapitalise, instead of
burdening the taxpayer. The process, known as a "bail-in", was a
condition for Cyprus to receive 10 billion euros in aid from
international lenders, along with the closure of another
loss-making major bank.
The released funds will be subject to capital controls
applicable in Cyprus, enforced last year to prevent money
fleeing the island in the wake of the bailout.
($1 = 0.7329 euros)
(Reporting by Michele Kambas, editing by David Evans)