Bank of Cyprus (BoC) announced on Wednesday it will release 12-month time deposits of worth €927 million that were blocked as part of the terms of its recapitalisation in July 2013.
“The Bank’s improving liquidity position and its specific and deliberate actions to enhance its liquidity through deleveraging are the decisive reasons for the release of the deposits,” BoC said. “The decision to release takes also into account the Bank’s recent announcement regarding the private placement of €1 billion ordinary shares, which is a significant demonstration of international investors’ confidence.”
The move was made in consultation with the finance ministry and the Central Bank of Cyprus, BoC said.
As part of its ongoing gradual recovery and in order to normalize the maturity profile of its deposit base in Cyprus, the lender has proceeded with the release of the twelve-month time deposits as follows: one third of 12-month time deposits is immediately released and will become available in clients’ current accounts; one third will be converted into a three-month time deposit maturing and automatically released on October 30, 2014, and one third of will be converted into a six-month time deposit maturing and being automatically released on January 30, 2015.
The freed funds will be subject to the restrictions on overseas transfers currently applicable in the Cypriot banking system, BoC said.
The release of the deposits reflects the bank’s prudent liquidity management and takes into account the improvement in the economic environment.
Through its decision, the management recognizes the improving trust and confidence towards the bank by its customers.