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Eurozone depositors fastest to leaveCyprusin February.

SAVERS from other euro zone countries withdrew 18 per cent of the cash they held in Cyprus in February, amid concerns the island would impose a tax on bank deposits.

Figures from the Central Bank released yesterday showed deposits from other eurozone states fell e1/4860 million to e1/43.9 billion, making them the fastest category to leave the stricken banking sector.

Deposits from non-eurozone countries actually rose, by less than 1 per cent to e1/421 billion, while deposits from local residents fell less than 1 per cent to e1/442.6 billion.

Overall, deposits were down almost e1/41 billion to e1/467.5 billion. Overall outflows in February were considerably less than in January, when e1/41.73 billion left the island.

Year-on-year (February 2012) deposits fell by 3.1 per cent.

But an even sharper fall than January is expected for this month, with significant outflows reported in the days after the March 15 announcement that Cyprus would levy a 6.75 per cent tax on all banks on all deposits under e1/4100,000 and a 9.9 per cent levy on deposits above the e1/4100,000 mark.

The levy was rejected by Cyprus lawmakers, leading to a subsequent accord for the winding down of Popular Bank, which will see large depositors will lose about 80 per cent of their cash and big depositors in Bank of Cyprus will lose 30 to 40 per cent.

Households' deposits (residents) in February dropped to e1/426.263 billion compared to e1/426.290 billion in January, and business deposits fell by e1/4634.7 million.

At the same time loans rose by e1/4281 million reaching a total of e1/472.402 billion. By contrast, January had witnessed a drop of e1/4345 million compared to December 2012.

Loans to local residents came to e1/454.058 billion, a slight increase on February, and business loans dropped by e1/452.3 million.

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Publication:Cyprus Mail (Cyprus)
Date:Mar 29, 2013
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