Bank of Cyprus and Laiki reassure UK customers
- 25 March 2013
- From the section Business
Two Cypriot banks based in the UK have sought to reassure customers about the security of their deposits.
The Bank of Cyprus UK, which has 50,000 UK customers, said there would be no effect on deposits, as it is a UK bank and subject to UK financial regulation.
But the Cyprus Popular Bank or Laiki Bank, which has 13,000 account holders in Britain, is not incorporated under UK banking law.
It said deposits would be guaranteed at least up to £85,000.
Following the agreement between EU finance ministers and the Cyprus government, anyone with savings above 100,000 euros (£85,150) in Cyprus may lose a proportion of their money.
So it is not yet clear whether customers with more than £85,000 in their Laiki accounts in the UK may have to forfeit some of their savings.
A spokesman for the bank said they were waiting to hear whether sums greater than that limit would be guaranteed. But otherwise, he said, they were trading normally.
The Bank of Cyprus (UK) is separately capitalised from its parent company and its customers are included within the UK Financial Services Compensation Scheme.
"There is no effect on deposits with Bank of Cyprus UK Limited, which is a UK bank," said a spokesman.
The situation with customers of Laiki Bank is different, as it is not part of the UK compensation scheme, which guarantees deposits up to £85,000.
Nevertheless, it has insisted that customers can take out as much cash as necessary, if withdrawals are allowed on their account.
"We have money available to give out. We have a sea of cash," said a spokesperson.
Nevertheless, it admitted that discussions were continuing with the Financial Services Authority, the Bank of England and Laiki's parent company in Cyprus.
Should UK depositors lose money, the government would have to decide whether to compensate them directly.
After the Icelandic bank Landsbanki collapsed in October 2008, both the British and Dutch governments decided to compensate more than 340,000 customers who had lost money.