UK branches of Cypriot banks reassure savers

Elizabeth Fournier
CYPRIOT banks with British operations reassured customers yesterday that their deposits were safe, with at least some savings covered under guarantee schemes.

The Bank of Cyprus UK, which has three branches in London and another in Birmingham, said there would be “no effect on deposits” for its UK account holders, describing itself as a “separately capitalised UK incorporated bank ... subject to UK financial regulation”.

Its independent status means that deposits held in the bank of up to £85,000 are covered under the UK’s Financial Services Compensation Scheme (FSCS), which was set up in 2001 to provide a statutory compensation scheme for UK savers.

Laiki Bank UK, however, is not covered by the same scheme as it operates as a branch of its Cypriot parent.

It posted a statement on its website yesterday telling customers they are protected up to €100,000 (£84,000) by the Cyprus Deposit Protection Scheme and not the UK’s compensation scheme.

But unlike Cypriot banks, which have placed a €100-per-day on ATM withdrawals, a Laiki Bank spokesperson said yesterday that the bank’s London branches were open as normal and there were no limits on withdrawals and no change to conditions.

Laiki’s most recent annual report for 2011 showed it had €1.7bn of customer deposits outside Cyprus and Greece, or eight per cent of the bank’s total deposits at the time.

Laiki also operates three branches in London – including a head office in central Mayfair – and one in Birmingham, as well as running a private and corporate business bank.

Bank of Cyprus also owns 80 per cent of Russia’s Uniastrum Bank, which said it had not put any restrictions on withdrawals in Russia.

It said no taxes or measures to bail out the Bank of Cyprus will be applied to Uniastrum.