Xinhua, Nicosia :
Bank of Cyprus announced the lifting of all remaining restrictions on local bank transactions by releasing 12-month time deposits worth 927 million euros (about 1.243 billion US dollars) matured Thursday, three days after announcing the completion of a process for raising its capital by 1 billion euros.
The deposits had been blocked by Ministry of Finance and Central Bank of Cyprus decrees in July, 2013, as part of the recapitalization process of the bank, following its resolution by Cyprus’s international lenders, the Eurogroup and the International Monetary Fund.
A bank statement said the release was directly linked to the announcement for the increase of its capital though private placement.
The statement said that one third of the total amount was available to depositors immediately with the rest being equally converted into three-month and six-month time deposits to be automatically released on Oct. 30, 2014 and on Jan. 30, 2015.
It added that the release was made possible by its improving liquidity position, its moves to enhance its liquidity though deleveraging and the improvement of the wider economic environment in Cyprus.
The released funds are subject to restrictions on international bank transfers still applicable in the Cypriot banking system that were imposed as part of the 2013 shake up of banks to prevent a flight of deposits.
The Ministry of Finance has said that it hopes to lift restrictions on international transfers by the end of the year.
In a separate move, Bank of Cyprus invited existing shareholders to subscribe for up to 20 percent of the total number of shares offered to qualified investors, namely WLR & Co. LLC investment fund and the European Bank for Reconstruction and Development (EBRD).
Out of about 4.17 billion new ordinary bonds existing shareholders will have the opportunity to buy about 833,330 shares at a price of 0.24 euro.
The capital increase process, which will raise the bank’s core tier-1 capital from 10.6 percent to 16.1 percent ahead of stress tests of European banks, has to be approved by an extraordinary meeting of shareholders to be held on Aug. 28.
