Release of six-month time deposits by Bank of Cyprus

Taking into consideration that seven months ago the Cypriot banking system and the whole financial system was on the brink of collapse, one can say that the progress done so far has been quite remarkable. Cyprus economy proved to be more flexible and resilience than expected and after of decisive efforts on behalf of the Cyprus Authorities and the strong resolve and sacrifices of the Cypriot people, Cyprus has managed to take back the control of the situation and put its economy again on the right track for stabilization.

Recently The Board of Directors of Bank of Cyprus Public Company Ltd announced its decision to release the six-month time deposits, which is €960 million, due to the improvement of the liquidity positions and stabilizing signs of its deposit base. According to the announcement:

The Board of Directors of Bank of Cyprus Public Company (“Bank” or “Group”), in a meeting today, has decided the release of the six-month time deposits that were blocked as per the decrees relating to the recapitalisation of the Bank in July 2013 and mature on 31 January 2014.

Despite the Bank’s right for the automatic renewal of these deposits for another six months in accordance with the relevant decree (1), the Board of Directors has proceeded with the release of deposits, following consultations with the Ministry of Finance and the Central Bank of Cyprus. It is noted that the released funds will be subject to the general restrictive measures currently applicable in the Cypriot banking system.

The Bank’s improving liquidity position and the stabilizing signs of its deposit base witnessed during the last few months are the decisive reasons for the release of deposits. Through its decision the Bank’s management recognises the improving trust and confidence towards the Bank by its customers and, in tandem, meets the expectations of the general public in Cyprus for enhancing the liquidity in the economy”

The Ministry of Finance and the Central Bank of Cyprus (CBC) consider the decision of the Bank of Cyprus to release fixed-term deposits as very important.

This move by the Bank of Cyprus indicates that our banking system is on the course to stabilisation and will help to strengthen the confidence of the public and investors in our banking system.

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