Big Cyprus savers could lose 60pc
Some money to be converted to shares under €10b EU bailout, but another portion held
Big savers in Cyprus' largest bank face losses of up to 60 per cent, far greater than originally feared under the island's controversial European Union-led bailout plan, officials said yesterday.
Lawmakers were meanwhile investigating a list published in Greek newspapers of Cypriot politicians who allegedly had loans written off by the island's three biggest banks, two of them at the heart of the financial meltdown.
Officials said Bank of Cyprus savers will see at least 37.5 per cent of funds over €100,000 turned into shares, but a further 22.5 per cent will be held until authorities know they can satisfy the terms of the bailout.
Under the first euro zone rescue package to punish savers with a so-called haircut of their money, Cyprus can qualify for the €10 billion (HK$100 billion) loan only by finding €5.8 billion of its own.
"There will be a 37.5 per cent haircut on deposits over €100,000 that will be converted into shares," said Marios Mavrides, a lawmaker from the ruling Democratic Rally (DISY) party. "Then 22.5 per cent will be held from the account for about two or three months, but this sum might be lower if a bigger haircut is needed."
Senior Bank of Cyprus official Mario Skandalis confirmed the figures.
Asked whether the rate that savers with deposits of more than €100,000 will lose could be as high as 60 per cent, he replied: "It could be a possibility, but I would say it is a remote possibility."
