Cyprus savers face bigger than feared losses



NICOSIA // Big savers in Cyprus's largest bank face losses of 60 per cent, far greater than originally feared under the island's controversial EU-led bailout plan, officials said on Saturday.

Lawmakers were meanwhile investigating a list published in Greek newspapers of Cypriot politicians who allegedly had loans written off by the island's three biggest banks, two of them at the heart of the financial meltdown.

Officials said Bank of Cyprus savers will see at least 37.5 per cent of funds over 100,000 euros turned into shares, but a further 22.5 percent will be held until authorities know they can satisfy the terms of the bailout.

Under the first eurozone rescue package to punish savers with a so-called "haircut" of their money, Cyprus can only qualify for the 10-billion-euro ($13-billion) loan by finding 5.8 billion euros of its own.

"There will be a 37.5 per cent haircut on deposits over 100,000 euros that will be converted into shares," said Marios Mavrides, a lawmaker from the ruling Disy party.

"Then 22.5 per cent will be held from the account for about two or three months, but this sum might be lower if a bigger haircut is needed," Mavrides said.

Senior Bank of Cyprus official Mario Skandalis confirmed the figures.

"There was a preliminary level reached which was 37.5 percent but this has not been finalised yet," he told AFP, adding that if the required amount for the bailout "cannot be reached then we will change the haircut rate."

Asked whether the rate that savers with deposits of more than 100,000 euros will lose could be as high as 60 percent he replied: "It could be a possibility but I would say it is a remote possibility."

He expected a formal announcement by Monday.

Lawmaker Mavrides said the remaining 40 percent would be "placed in a time deposit for about six months to prevent people drawing all their money out but it creates a problem for businesses who have no access to working capital."

"The money is not lost but creates a problem for businesses."

House finance committee chair Nicolas Papadopoulos told state radio there were questions over the possible extra levy on the held-back 22.5 percent, and said a lack of information had created panic among depositors.

The bailout takes the axe to Cyprus's prized tax-haven style banking system -- bloated with Russian money and exposed to toxic Greek debt -- and also threatens to deepen the recession the island was already suffering.

Bank of Cyprus is set to absorb the island's second largest Laiki under the deal with the European Union, European Central Bank and International Monetary Fund. Laiki will be wound up with the loss of thousands of jobs.

Lawmaker Mavrides, meanwhile, confirmed that a committee appointed by President Nicos Anastasiades would investigate a list published by Greek media of Cypriot politicians who allegedly had loans forgiven.

The Bank of Cyprus, Laiki and Hellenic Bank reportedly forgave millions of euros in loans over the past five years to lawmakers, companies and local company authorities, newspapers in Greece said.

The allegations would likely be discussed in parliament next week, Mavrides added.

Cyprus has already launched an investigation led by three former supreme judges to probe the banking meltdown, including into whether any criminal activity was involved.

Cypriots were hoping for a further relaxation of the eurozone's first capital controls, which were imposed on Wednesday to stop a run on banks.

The central bank said Friday it would make daily efforts to "refine or relax" the restrictions after lifting its 5,000-euro ceiling on domestic credit and debit card payments.

Banks reopened on Thursday without the feared panic and resumed normal opening hours on Friday.

Draconian controls remain in place, including a daily withdrawal limit of 300 euros and bans on cashing cheques or taking more than 1,000 euros in cash out of the country.

Cyprus, facing its greatest crisis since Turkish troops occupied the north of the island in 1974, remains under global scrutiny as the latest test of the eurozone's viability.

Find the right policy for you

Don’t wait until the week you fly to sign up for insurance – get it when you book your trip. Insurance covers you for cancellation and anything else that can go wrong before you leave.

Some insurers, such as World Nomads, allow you to book once you are travelling – but, as Mr Mohammed found out, pre-existing medical conditions are not covered.

Check your credit card before booking insurance to see if you have any travel insurance as a benefit – most UAE banks, such as Emirates NBD, First Abu Dhabi Bank and Abu Dhabi Islamic Bank, have cards that throw in insurance as part of their package. But read the fine print – they may only cover emergencies while you’re travelling, not cancellation before a trip.

Pre-existing medical conditions such as a heart condition, diabetes, epilepsy and even asthma may not be included as standard. Again, check the terms, exclusions and limitations of any insurance carefully.

If you want trip cancellation or curtailment, baggage loss or delay covered, you may need a higher-grade plan, says Ambareen Musa of Souqalmal.com. Decide how much coverage you need for emergency medical expenses or personal liability. Premium insurance packages give up to $1 million (Dh3.7m) in each category, Ms Musa adds.

Don’t wait for days to call your insurer if you need to make a claim. You may be required to notify them within 72 hours. Gather together all receipts, emails and reports to prove that you paid for something, that you didn’t use it and that you did not get reimbursed.

Finally, consider optional extras you may need, says Sarah Pickford of Travel Counsellors, such as a winter sports holiday. Also ensure all individuals can travel independently on that cover, she adds. And remember: “Cheap isn’t necessarily best.”

Traces of Enayat

Author: Iman Mersal
Publisher: And Other Stories
Pages: 240

Company Profile

Company name: Namara
Started: June 2022
Founder: Mohammed Alnamara
Based: Dubai
Sector: Microfinance
Current number of staff: 16
Investment stage: Series A
Investors: Family offices

Florida: The critical Sunshine State

Though mostly conservative, Florida is usually always “close” in presidential elections. In most elections, the candidate that wins the Sunshine State almost always wins the election, as evidenced in 2016 when Trump took Florida, a state which has not had a democratic governor since 1991. 

Joe Biden’s campaign has spent $100 million there to turn things around, understandable given the state’s crucial 29 electoral votes.

In 2016, Mr Trump’s democratic rival Hillary Clinton paid frequent visits to Florida though analysts concluded that she failed to appeal towards middle-class voters, whom Barack Obama won over in the previous election.

MEDIEVIL (1998)

Developer: SCE Studio Cambridge
Publisher: Sony Computer Entertainment
Console: PlayStation, PlayStation 4 and 5
Rating: 3.5/5

What is graphene?

Graphene is a single layer of carbon atoms arranged like honeycomb.

It was discovered in 2004, when Russian-born Manchester scientists Andrei Geim and Kostya Novoselov were "playing about" with sticky tape and graphite - the material used as "lead" in pencils.

Placing the tape on the graphite and peeling it, they managed to rip off thin flakes of carbon. In the beginning they got flakes consisting of many layers of graphene. But as they repeated the process many times, the flakes got thinner.

By separating the graphite fragments repeatedly, they managed to create flakes that were just one atom thick. Their experiment had led to graphene being isolated for the very first time.

At the time, many believed it was impossible for such thin crystalline materials to be stable. But examined under a microscope, the material remained stable, and when tested was found to have incredible properties.

It is many times times stronger than steel, yet incredibly lightweight and flexible. It is electrically and thermally conductive but also transparent. The world's first 2D material, it is one million times thinner than the diameter of a single human hair.

But the 'sticky tape' method would not work on an industrial scale. Since then, scientists have been working on manufacturing graphene, to make use of its incredible properties.

In 2010, Geim and Novoselov were awarded the Nobel Prize for Physics. Their discovery meant physicists could study a new class of two-dimensional materials with unique properties. 

 

The specs: 2018 Range Rover Velar R-Dynamic HSE

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