DEPOSITS in Cyprus Popular Bank in the UK will be transferred to the Bank of Cyprus UK and won’t suffer a haircut as part of the bailout plan, the Bank of England said this morning.
The BoE’s new Prudential Regulation Authority (PRA) said that money deposited in Laiki Bank UK will be covered by the UK Financial Services Compensation Scheme up to £85,000 per person.
Cyprus Bank UK is a UK subsidiary fully regulated by the PRA and the Financial Conduct Authority.
"The agreement does not affect access to bank accounts and therefore all customers who had an account with Laiki Bank UK will be able to access funds as normal and do not need to do anything," the PRA said today.
Under the Cyprus bailout terms, Cyprus Popular Bank, known as Laiki, is being wound down.
Depositors with savings of more than €100,000 in Cyprus Popular Bank and Bank of Cyprus in Cyprus itself will lose at least 30 to 40 per cent to help pay for the bailout.
Laiki Bank UK is a branch, meaning Britain was not obliged to protect its depositors, unlike with Bank of Cyprus UK, which is a subsidiary and therefore its deposits up to £85,000 are protected.