London ready to mitigate impact of Cyprus banking crisis on Laiki UK customers

The UK government is examining ways to mitigate the impact of the Cyprus banking crisis on small and medium-sized enterprises and individual former customers of Laiki UK, Financial Secretary to the Treasury Greg Clark has stated in a letter to north London MPs.

Financial Secretary to the Treasury Greg Clark has written to Theresa Villiers, David Burrows, Nick de Bois and Mike Freer, whom he met in April, to update them on the government’s actions.The Minister refers to the assistance the UK Trade and Investment teams are willing to offer through discussions with a trade delegation that Cyprus plans to send to the UK, possibly in June.

In addition, the Minister said he has arranged for specialist retail banking teams from Lloyds and RBS – with other banks also likely to be involved - to provide advice to SMEs and other Laiki customers affected by the banking crisis. Moreover, there is a scheme in place for those who are facing short term financial difficulties.

Commenting on those actions, MP Theresa Villiers said: “I am encouraged by this progress and grateful for the swift response from Greg Clark. This continues to be a difficult situation for a number of businesses who have overdrafts or loans with Laiki UK and it is important that efforts are made to try to resolve matters as quickly as possible".

Conservative MP David Burrowes said: "I welcome the positive approach by the Minister and Government to address the ongoing concerns of our Cypriot constituents. I am pleased that the Government is showing that it is a true friend of Cyprus in these difficult times."

Following decisions by the Euro area Finance Ministers, collectively called as the Eurogroup, Cyprus will receive a €10 billion bailout by the ESM the IMF after bailing in bank uninsured deposits in a bid to recapitalize the island`s troubled banks, which posted massive losses worth of €4.5 billion due to the Greek sovereign debt haircut.

The island`s second largest bank, Cyprus Popular bank, (Laiki) is wound down and its good part (loans and deposits below €100,000) and is folded in Bank of Cyprus (BoC). So far 37.5% of uninsured deposits in BoC been converted to equity, whereas an additional 22.5% remains frozen until the conclusion of an independent evaluation of the Bank`s balance sheet after absorbing the good part of the Cyprus Popular Bank.

Source: Financial Mirror