Big Losses at Bank of Cyprus

Depositors whose money was seized by the Bank of Cyprus protested in vain

NICOSIA – The reeling Bank of Cyprus, brought to the edge of ruin with other state banks that suffered losses in Greek bond holdings and bad loans to Greek businesses, took a nine-month net loss of 1.94 billion euros, ($2.65 billion) this year amid fears it could get worse when the government lifts capital controls preventing a run on the banks.

President Nicos Anastasiades in March agreed to onerous terms of a 10 billion euro ($13.67 billion) international bailout to save the state banks and economy from collapse. The deal, however, forced the government to confiscate 47.5 percent of accounts over 100,000 euros ($137,000) to make private depositors pay for mistakes made by bank executives, who have not been prosecuted.

The shortfall for the recession-hit Mediterranean island’s largest lender compared with 211 million euros ($288.7 million) in after-tax losses in the year-earlier period. The bank said disposal of its Greek operations resulted in a loss of 1.45 billion euros ($1.98 billion) in the first three months of 2013.

Profit before provisions, impairments and restructuring costs reached 224 million euros ($333.86 million) for the third quarter and 438 million euros ($599.32 million) for the nine months. The number of its branches has been reduced to 133 from 203, and another six are scheduled to close in 2014.

The government is restricting daily withdrawals for customers to only 300 euros ($410.44) and placed similarly restrictive conditions on how much money businesses can access. It has promised the controls will be lifted sometime early next year.

A number of protests against the government and outside the bank, as well as other banks, have proved fruitless.