All eyes in global banking have been fixated on Cyprus’s two largest banks for the last week, as their near collapse, and the dramatic steps taken to avoid it, threaten the cornerstones of banking and the EU’s single currency.
Here are profiles of both banks.
|Bank||Bank of Cyprus||Cyprus Popular Bank (Laiki)|
|What||With a legacy stretching back to 1899, Bank of Cyprus is the island’s largest. Its value peaked at close to &euro:7.5 billion ($9.75 billion) in December 2007, but fell to €400 million by March 2013. Its business is largely retail banking in Cyprus and Greece, but it also has some investment banking, private banking and the Kermia Beach Bungalow Hotel in the Ayia Napa resort. It employs about 11,000 people.||Founded more than 110 years ago, Laiki Bank Group stretches across 10 markets. Its market value hit more than €8.1 billion in November 2007, before falling as low as €170 million in March 2013. Retail and corporate/investment banking are the mainstays, but Laiki also has a wealth management business and other investments.|
|Deposits||Just 10% of Bank of Cyprus’s €27.8 billion of deposits are in units outside the euro zone. The Russian and U.K. units of Bank of Cyprus hold a roughly equal amount, at €1.2 billion. Deposits in Cyprus account for 66% of the bank’s deposits, and deposits in Greece account for 23%. The figures are dated end-September 2012 and published in the bank’s third quarter accounts.||Figures for Laiki are not available.|
|Where||Cyprus (52% of loan book), Greece (33%), and the rest Russia, Romania, Ukraine, Channel Islands, plus representative offices in Moscow, Saint Petersburg and Ekaterinburg in Russia, Kiev in Ukraine, Belgrade in Serbia and Johannesburg in South Africa. The loan book percentages are as of September 30, 2012.||Cyprus (43%), Greece (48%) and the rest United Kingdom, Russia, Ukraine, Romania, Serbia, Malta, Guernsey and a representative office in China. The loan book percentages are as of December 2011.|
|Who owns it||2011 annual report shows 61% of its shares were owned by Cypriots and another 13% by Greeks. The remainder is listed as “other countries.” Almost 80% of its shareholders were private at that point.||Republic of Cyprus holds 84% after a €1.8 billion bailout in June 2012. The rest is owned by around 92,000 private and institutional investors, according to information on the bank’s website dated August 2012. More detailed information dating to December 2011 shows staff owned 2.45% of the bank, private individuals owned 37% and companies owned 54%.|
|Why it’s in trouble||It lost €1.6 billion on Greek bonds in 2011. Provisions for bad loans more than doubled to €800 million in the first nine months of 2012 as non performing loans shot up to 17% of its total book. Greece was the main driver of 2012’s higher loan losses, with €436 million of provisions booked there.||Laiki lost €2.3 billion on its Greek government bonds in 2011. Its results for the first nine months of 2012 showed loan losses provisions almost quadrupled year on year to €400 million.|
|Source: Reuters. Reporting By Laura Noonan; editing by James Jukwey.|