Cypriot FinMin “Uninsured Popular Bank depositors could face 80% haircut”

Posted by keeptalkinggreece in Economy

Russian roulette or just a normal spinning wheel in Cyprus’ casino? The first officials statements referring to the haircut  big deposit holders at Cyprus Popular Bank would undergo spoke of 30%. Then it was 40%. Now it looks that depositors will lose 80% of their money. Croupier Michalis Sarris spun the wheel watching the ball jumping here and there…

Cyprus΄s finance minister said Tuesday that large deposit holders at Cyprus Popular Bank PCL (CPB.CP), the island΄s second biggest lender, could face losses of as much as 80% on their deposits as the government moves to wind down its operations.

Speaking in a television interview with state broadcaster RIK, Michalis Sarris indicated that it could also take years before those depositors see any of their money returned.
“Realistically, very little will be returned,” Mr. Sarris said.
Asked if, like in other bank closures, it could take six to seven years before depositors get back there money, he said: “maybe yes. And the amount [returned], could be 20%. Certainly, for depositors above 100,000 euros it could be a very significant blow.”
His remarks come just hours after Cyprus΄s central bank governor estimated that the losses facing large depositors at rival Bank of Cyprus PCL (BOCY.CP), could reach as much as 40%.
Early Monday, Cyprus agreed to a 10 billion euro ($13 billion) bailout from its euro-zone peers and the International Monetary Fund in exchange winding down Cyprus Popular, also known as Laiki, and the merger of its healthy assets with Bank of Cyprus. (full story WSJ via Capital.gr)

PS I wonder. if the “Russian oligarchs” have left their money in these two Cypriot banks and have not transferred it out of the country all these weeks the Cyprus bailout debate was going on. Another question is, of course, why they deposited their money in Cypriot banks and not in Russian bank branches in Cyprus.