Stabilization of Cyprus banks

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Cyprus banksThe International Monetary Fund (IMF) has been quoted as saying that Cyprus economic situation is ‘not as severe as anticipated’ after its 2013 recession and the collapse of its banking sector, therefore the Cyprus banks seem to be stabilizing. The close connection that Cyprus had with the heavily recession hit Greece put an extra strain on the Cyprus banks, and in 2013 the two biggest lenders, Bank of Cyprus and Laiki Bank found themselves in trouble and in need of bailout. Unfortunately, the Cypriot government was unable to provide the necessary funding and turned to the EU and the IMF for help, which they were granted in the form of €10bn. This did not come with no-strings attached, particularly from the EU. Amongst other things they wanted to see was a stream lining within the banking sector, which in real terms led to the absorption of the Laiki bank into the Bank of Cyprus. Another thing that shook the stabalization of Cyprus banks was the ‘bail in’ for deposits of over €100,000 and the temporary freezing of assets. This was a major fear for new foreign investors which further added to the problems of the banks in Cyprus, however once the dust settled and the initial panic was over the slow process of reassuring companies and bringing back business to the banks began.
Cyprus banks are gradually stabilizing
Just over one year on and things are looking bright for the sunny island of Cyprus, Cyprus banks are gradually stabilizing. However, the IMF warns Cyprus banks that they are not out of the woods yet saying ‘The outlook remains challenging, with rising unemployment, falling credit, and increasing non-performing loans’, the total amount of non-performing loans is estimated to be €26bn and includes 50% of all loans. In regards to the economic situation of Cyprus the IMF stands by its forecast of a 4.8% contraction but believes it will pick up and grow by 0.9% in 2015. This could be increased by the exploitation of offshore gas reserves and the possibility of reuniting both the north and south of the island as a whole. If you are considering different options for opening a bank account, please review the list of juridsictions where we can help you open a bank account – Cyprus, Singapore, Malta, Switzerland and more. Banks we work with Procedure of opening bank accounts