In an announcement by the Hellenic Ministry of
Finance, and an agreement between Greece and Cyprus, a Greek bank will take
over two Cypriot banks (branches) operating in Greece: Bank of Cyprus and
Cyprus Popular Bank. The other, Hellenic, will operate independently.
The agreement was announced by the minister of Finance
but which bank will take the two mentioned above is yet unknown. The decision
will be made by the Finance Stability Fund.
In Cyprus, Cyprus Popular Bank will not open as it has
officially announced that it is bankrupt, and it is unknown what will happen
with depositors’ money. Meantime, the Bank placed a ceiling of 260 Euros daily
withdrawal, and Troika insists on the taxation of deposits over 100,000 Euros
with a flat rate of 15%. There are thoughts that Cyprus Popular Bank in Cyprus
will be broken into two parts: one being the healthy assets side, and the other
the bad debt loans.
The ministers of Finance of the Euro group are
pressuring Cyprus for bank restructuring and to freeze assets of unsecured
depositors. There are also thoughts to break up Bank of Cyprus in two also, according
to a minister who spoke on a Greek television program today.
A plan is being worked so that it can be brought for a
vote to the Cyprus Parliament, and may be ready by this weekend. One of the
plans is to tax deposits. If the same deputies vote yes who voted no three day
ago, is this not a contradiction?
There will be a fight between two prevailing banks to
buy the branches in Greece: Alpha bank and Piraeus bank. And this because
projections have it that whichever bank wins, it will have access to 33% of
transferred loan portfolio, and thus be a leader in the banking industry of
Greece.
The two Cypriot banks operating in Greece have issued
loans of face value equal to 22 billion Euros, and deposits worth 13.1 billion
Euros. The other bank operating in Greece, Hellenic is excluded due to its
smaller size compared to the other two: 2 billion Euros in loans and 300
million in deposits.
It is interesting to point out that in Cyprus there
are many Russian millionaires who are operating their companies through Cypriot
offshore companies. One of them is the owner of the soccer English football club
Chelsea. They have bank accounts as the Russian Republic and one reason they
are upset of the potential decision to tax deposits, is they consider hostile
to tax Russian Republic assets.
