Elias Neocleous The Ministry of Finance and the Central Bank of Cyprus have jointly announced that the recapitalisation of Bank of Cyprus (BoC) is now complete. Forty seven and a half percent of so-called uninsured deposits (that is, the excess of deposits over €100,000 ($132,600)) as at the time the bank was placed under the resolution regime have been converted into shares, giving a Common Equity Tier 1 ratio estimated at approximately 12%, well above the required minimum. This is the final stage of the bank's resolution process and, according to the announcement, there will be no further measures under the Resolution Law. Early in the resolution process, 37.5% of the excess of customer deposits over €100,000 was earmarked for conversion into shares and a further 22.5% was withheld as a contingency reserve pending an assessment of the bank's financial position and capital needs. Now that the assessment has been completed, a further five percent of the uninsured balance will be returned to depositors. The remainder, after deduction of the amount converted to shares, will be divided into three equal separate time deposits of six, nine and 12 months, respectively, carrying an enhanced rate of interest. On maturity BoC will have the option to renew the time deposits once for the same duration.
August 26, 2013