ECONOMY

Private-sector deposits in Cypriot banks fall in May

Consumers and companies continued in May to withdraw deposits from banks in Cyprus, where big account holders in the two largest lenders were forced to take a hit as part of an international bailout.

Private-sector deposits fell by 1.9 percent to 40.530 billion euros ($52.70 billion) after a roughly 7 percent fall in April, European Central Bank data showed on Thursday.

Banks on the island were shut for nearly two weeks in March after Cyprus agreed a 10-billion-euro bailout, which forced major depositors to pay part of the cost of the rescue.

Capital controls are still in place on the island, with limits on how much people can transfer from their accounts. Cyprus is gradually easing the controls.

The data showed that deposits also fell in another southern European country mired in the debt crisis – Spain. Spain’s private sector deposits fell by 6.504 billion euros in May.

Deposits in Greek, Italian and Portuguese banks rose, having decreased the previous month. Monthly fluctuations in the figures are common, though sharp consecutive drops in countries with stable banking systems are unusual.

The data, which are for all currencies combined, are not seasonally adjusted and differ slightly from national central bank figures. They exclude deposits from central government and banks. [Reuters]