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Cyprus Says Much Investor Interest in Troubled Co-op Bank

March 31, 2018

NICOSIA (AP) — The Cypriot government said Friday that it’s ready to “tangibly support” the sale of the island nation’s Cooperative Bank to private investors and to guarantee the security of deposits.

Cyprus government spokesman Prodromos Prodromou said that there’s already been interest from domestic and foreign investors, which bodes well for its prospects.

But he said an “organized whispering campaign” and irresponsible rumors has led to an “unjustified” withdrawal of deposits.

Prodromou blamed a political party he didn’t name for trying to reap political gain by spreading rumors that have rattled depositors.

The bank is 77-percent state-owned and is the number one bank for domestic deposits. But it’s weighed down by bad loans, representing nearly 60 percent of the total loan book.

The bank appointed Citigroup Global Markets to look for investors as part of its strategic plan. The deadline for expressions of interest expired March 29.

Depositor jitters are primarily owed to a 2013 banking crisis that forced Cyprus to accept a rescue deal that included a seizure of unsecured deposits in the country’s two largest lenders.

Andros Kyprianou, leader of Communist-rooted AKEL denied “unacceptable and condemnable” suggestions that his party urged depositors to take their savings out of the bank, saying that AKEL “would never behave in such a away.”

Finance Minister Harris Georgiades told state broadcaster RIK earlier that depositors have nothing to worry about and that the bank’s sale would only help boost its viability.

The government will retain a stake in the bank after its sale.

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