'It's Robbery!' New Cyprus Bombshell As Britons Are Told They May Lose Everything Over 85k

 Daily Mail

• Bank of Cyprus will see 37.5% of deposits over £85k converted into shares
• Laiki Bank customers are also reported to be facing the loss of 80%
• Experts say there is a good chance that shares will be worthless

By Dan Atkinson And Ian Gallagher

PUBLISHED:18:27 EST, 30 March 2013| UPDATED:16:27 EST, 31 March 2013

British expats in Cyprus face a near-total wipe-out of any deposits over £85,000 as the full nightmare of the stricken island’s EU bailout became clear yesterday.

Although it was known that the wealthiest savers would take a large hit from last week’s €10 billion (£8.5 billion) EU rescue deal, the loss is far greater than feared.

The blow will fall on customers of the country two biggest banks – Bank of Cyprus and Laiki Bank.

Bank of Cyprus savers will see 37.5 per cent of any deposits over €100,000 (£85,000) converted into shares in the bank, with a strong possibility that these will prove worthless. Another 40 per cent will be repaid only if the bank does well in future, while 22.5 per cent will go into a contingency fund that could be subject to further write-offs.

Laiki Bank customers are also reported to be facing the loss of 80 per cent of their deposits above the £85,000 limit.

An early bailout plan – highlighted by The Mail on Sunday two weeks ago – would have seen the losses shared across all bank customers, regardless of their balance.

However, that plan was voted down by the Cypriot parliament, leaving the country in urgent need of a new solution to raise its €5.8 billion contribution towards the bailout.

The deal – which was clinched last Monday between Cyprus, the European Union and the International Monetary Fund – made clear that richer bank customers would shoulder a much larger bill.

Although it is not known how many of the 60,000 British expats living on the island have deposits of more than £85,000, it is likely that a considerable number will be caught in the net.

Neil Hodgson, 48, who moved to Paphos, on the south-west coast of the island, six years ago, said he has lost nearly £200,000. The former farmer, who has two accounts with Bank of Cyprus, added: ‘I had more than €300,000 in my deposit account and €20,000 in my current account. When I went to the bank the other day I was told the total balance for both is €100,000.

‘They were unable to explain how this had been worked out but indicated I might get some back at a later stage.

‘I checked online and it confirmed that the €20,000 in my current account remains, but that I only have €80,000 in my savings account. It’s robbery, plain and simple.’
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