The long period of uncertainty has finally finished as the final agreement on the recapitalization of Bank of Cyprus has been drafted.
According to the draft all depositors’ funds exceeding 100,000 Euros would have 37.5% of their funds converted into equity for the bank’s capital requirements i.e. shares.
The majority of depositors are Russians and Ukrainians with only 30% being Cypriots, according to the figures released by the Bank.
Moreover, six Russians have been appointed to the 16-member board of Bank of Cyprus. The new board members were elected from a list of 46 candidates, where there were more than 1,500 people present, representing 53.6% of total share capital.
However, the newly elected board members must be approved by the Central Bank of Cyprus.
The Bank of Cyprus board has now got a task to ensure a strict restructuring which will cause significant downsize in number of branches and staff.
In the light of current situation, Cyprus is still the only Eurozone member to impose capital controls.
Hopefully, the recapitalization and currently ongoing restructuring of the Bank of Cyprus will result in a well-capitalised and resilient bank, which will be able to serve the needs of its clients and support the Cyprus economy.