Deposits in Cyprus’ beleaguered banks shrank by more than 10 billion euros (US$13 billion) since the country agreed with international rescue creditors in March to raid savings in its two biggest lenders, new figures showed on Friday.
Deposits dropped by 6.34 billion euros in April, much more than the 3.75 billion euros lost the previous month, the central bank said.
April’s losses, however, include 2.8 billion euros of deposits in Cyprus’ largest lender, Bank of Cyprus, which had to be converted into bank shares as part of the country’s bailout deal.
The losses brought total deposits to 57.4 billion euros at the end of April, a steep drop from the 72 billion euros stacked in Cypriot bank accounts — much from Russian and other foreign clients — at their peak in May last year.
Cyprus Central Bank spokeswoman Aliki Stylianou denied the outflows were a matter of concern, arguing they are part of normal transactions, mainly by foreign banks active in Cyprus.
Confidence in Cyprus’ banks tanked when Cypriot authorities agreed with their euro partners and the IMF to force depositors with more than 100,000 euros in the country’s top two banks to take major losses. Cyprus was asked to do so to help raise 13 billion euros, a condition for receiving a 10 billion euro loan.
In order to prevent a full-blown bank run, Cypriot authorities put restrictions on money withdrawals and transfers, such as a 300 euro daily withdrawal cap, which have gradually been relaxed. However, while the controls have avoided a run, Friday’s figures suggest that depositors used the means available to keep pulling money out.
Cyprus’ limits on money flows are the first to be imposed on banks in the euro currency’s 14-year history. Cypriot officials say they will be fully lifted once trust in the banks is restored.
Cyprus’ economy nosedived after its two biggest banks — Bank of Cyprus and Laiki Bank — lost billions on bad Greek debt and loans. Unable to borrow from international markets since mid-2011, Cyprus was on the verge of bankruptcy when its euro area partners agreed on the loan.
Besides raiding bank deposits, the government will also raise money by selling state-owned companies and cutting spending.
Cypriot Minister of Finance Harris Georgiades told the state-run Cyprus Agency on Friday that the economy could shrink by more than the projected 8.7 percent this year and that deeper government salary cuts may be necessary.
Loans in April decreased by 1.46 billion euros, less than the 1.97 billion euro drop in March, according to the Cyprus Central Bank. Total loans at the end of April stood at 68.4 billion euros.
The Cypriot Ministry of Finance said in a statement on Friday that the government has deposited 75 million euros in the country’s commercial and cooperative banks as a gesture of confidence in the banking system. The ministry said the money comes from government accounts and that more deposits will be made.
Also on Friday, Cypriot authorities lifted restrictions on money withdrawals and transfers for international clients of Beirut-based BankMed.
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that
Intel Corp has named Tasha Chuang (莊蓓瑜) to lead Intel Taiwan in a bid to reinforce relations between the company and its Taiwanese partners. The appointment of Chuang as general manager for Intel Taiwan takes effect on Thursday, the firm said in a statement yesterday. Chuang is to lead her team in Taiwan to pursue product development and sales growth in an effort to reinforce the company’s ties with its partners and clients, Intel said. Chuang was previously in charge of managing Intel’s ties with leading Taiwanese PC brand Asustek Computer Inc (華碩), which included helping Asustek strengthen its global businesses, the company
United Microelectronics Corp (UMC, 聯電) forecast that its wafer shipments this quarter would grow up to 7 percent sequentially and the factory utilization rate would rise to 75 percent, indicating that customers did not alter their ordering behavior due to the US President Donald Trump’s capricious US tariff policies. However, the uncertainty about US tariffs has weighed on the chipmaker’s business visibility for the second half of this year, UMC chief financial officer Liu Chi-tung (劉啟東) said at an online earnings conference yesterday. “Although the escalating trade tensions and global tariff policies have increased uncertainty in the semiconductor industry, we have not
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said it plans to ship its new 1 megawatt charging systems for electric trucks and buses in the first half of next year at the earliest. The new charging piles, which deliver up to 1 megawatt of charging power, are designed for heavy-duty electric vehicles, and support a maximum current of 1,500 amperes and output of 1,250 volts, Delta said in a news release. “If everything goes smoothly, we could begin shipping those new charging systems as early as in the first half of next year,” a company official said. The new
RSS