Central Bank of Cyprus refutes Popular is shutting down

Cyprus Popular Bank (Laiki) employees were told on Thursday afternoon the bank is closing, state broadcaster CyBC reported citing the Union of Cypriot Bank Employees (ETYK), but the Central Bank is dimissing that as a mere rumor, as the country’s parliament is about to have a debate and a vote on the alternative bailout plan of the island’s government.

The central bank refuted reports that letters of dismissal had been sent to CPB employees or a letter informing ETYK about that, with a spokeswoman telling CyBC there was “no truth in those rumors”. She added that the restructuring of the bank does not mean shutdown.

Sigma Television, the country’s biggest private channel, reported that anything between 500 and 2,500 employees could become jobless, adding that staff leaves have also been revoked.

Hundreds of bank employees, members of the ETYK union gathered outside Parliament asking for Cypriot banks to remain open, while about a dozen of them broke police barriers and tried to approach the gate of the House, about one hour before the plenary session that was planned to start at 7 p.m.

Kathimerini Cyprus cites sources from the European Central Bank according to which CPB will go into resolution, not a shutdown.

It adds that the restructuring plan for Popular provides for its split into a good and bad bank, with the healthy portfolio going under Bank of Cyprus, while the so-called bad side will remain at Laiki along with some – if not all – non-performing loans from the Bank of Cyprus portfolio.

Deposits at Popular up to the level of 100,000 will still be guaranteed, but turned over to Bank of Cyprus.

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