NICOSIA, April 30 Cypriot lender Bank of Cyprus
will release some of the 933 million euros ($1.3
billion) of deposits still frozen under a recapitalisation of
the bank last year, it said on Wednesday.
It will be the second major release of deposits by the
lender, which was forced to convert nearly half of uninsured
deposits exceeding 100,000 euros into equity in the bank as part
of an international bailout of Cyprus last year.
It was the first time in the history of the euro zone that
uninsured deposits were seized to recapitalise a bank instead of
passing the burden onto EU taxpayers.
A considerable portion of uninsured deposits remaining after
the rest was converted into equity were placed in fixed-term
The lender released 950 million euros in maturing six-month
time deposits in January.
The bank said a third of nine-month time deposits would be
immediately released and placed in clients' current accounts,
with the remaining converted into three-and-six month time
deposits which would be automatically released on maturity.
Bank of Cyprus said its action reflected its improving
liquidity position and a better economic outlook.
The funds, it said, would still be subject to capital
controls enforced by Cypriot authorities last year to prevent a
run on the banking system. Those controls are gradually being
In addition to forcing its depositors to pay for its
recapitalisation, Bank of Cyprus assumed some assets of
now-defunct Laiki Bank, shut down under Cyprus's 10 billion euro
Last week international credit ratings agency Standard and
Poor's raised its rating for Cyprus to 'B' from 'B-', on what it
said was good progress made by the island in meeting an economic
adjustment programme overseen by the EU and the IMF.
($1 = 0.7212 Euros)
(Writing By Michele Kambas; Editing by Susan Fenton)