Cyprus deposit outflows in August reach €1.45 billion

Deposits in Cyprus for August 2013 declined by 2.9% or €1.45 billion, figures released today by the Central Bank of Cyprus show.

This is the lowest deposit reduction rate since the March Eurogroup, which imposed a conversion of uninsured deposits to equity, the so-called bail-in, to rescue Cyprus` ailing banks, as part of a €10 billion financial assistance package for Cyprus. Net deposits outflows were €0.45 billion as a 10% bail-in was imposed on uninsured deposits in Bank of Cyprus that amounted to €1 billion. In April, a 37.5% bail-in was initially imposed on uninsured deposits in Cyprus.

Total deposits in Cyprus` banking system declined to 48.30 billion in August compared with 49.74 in July. On an annual basis, August deposits recorded a decline of 21.4%.

Total loans in August declined by €2.47 billion to €63.80 billion compared with 66.28 billion in July reflecting a continued deleverage in both household and corporate loans.

Loans to domestic residents declined by €1.51 billion, whereas loans to non euro-area residents that registered a reduction €0.89 billion and loans to other euro-area residents declined by €0.7 billion.

Consumer loans in August declined to 3.18 billion in August from €3.25 in July, housing loans to €13.97 billion in August from €14.70 in July and corporate loans marked a 0.38 billion reduction to €29.39 billion.