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The Bank of Cyprus will be split into two distinct entities, a retail bank and an investment bank, according to an agreement reached on July 23 by the Cypriot government and the country’s central bank.
The investment bank will be responsible for regional development programmes and the management of partially reimbursed corporate debt, while the retail bank will operate like a standard bank, explains Cypriot daily Politis.
The primary aim of dividing the Bank of Cyprus – a move supported by the troika of the European Union, European Central Bank and International Monetary Fund – is to contain risks linked to impaired loans awarded to major developers or to hotel owners and to restore the bank’s credibility.
The operation should be effective this autumn, the paper says, and will be a major component of the reorganisation of the Bank of Cyprus scheduled for the end of September.
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