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According to a report by Panayiotis Rougalas in this Sunday's Kathimerini, the liquidator of the former Laiki Bank, Avgoustinos Papathomas, has achieved a key milestone in efforts to compensate creditors, particularly depositors who lost money during the bank’s 2013 collapse. A recent sale of Laiki’s 4.81% shareholding in Bank of Cyprus brought in €90.8 million, boosting the reserve for compensation to just under €300 million. This marks a significant step toward returning funds to those affected by one of Cyprus’s most turbulent financial crises.
The sale of 21.5 million Bank of Cyprus shares was carefully timed to coincide with the bank’s listing on the Athens Stock Exchange, a move that bolstered its stock value. Shares were sold at €4.23 each, capitalizing on a year-long rise in Bank of Cyprus’s stock price, which has climbed 54.58%, including a 36.12% surge since January. This strategic decision allowed the liquidator to maximize the proceeds, exceeding the €65 million raised in a similar sale in 2017.
This new influx of funds will pave the way for the first payouts to creditors, expected within the next two to three months. While the total reserve represents only 8.5% of the €3.5 billion owed to creditors, it is a meaningful step forward after more than a decade of uncertainty. The funds will primarily benefit depositors whose savings were "haircut" during the financial crisis.
Dividends from Bank of Cyprus shares have also contributed to the reserve. A €5.37 million dividend was collected in 2023, alongside €1 million from 2022, bringing total dividend income to nearly €6.5 million.
The liquidator is pursuing additional funds to further boost the reserve, including €13.39 million in taxes owed in Greece and potential recoveries from written-off debts and assets in Ukraine. However, the likelihood of collecting some of these amounts remains uncertain.
The Cyprus Tax Department has submitted the only verified preferential claim so far, amounting to €1.07 million in VAT debt, which will be prioritized under the law.
Though the €300 million reserve is modest compared to the total losses, it represents a critical step toward justice for those affected by Laiki Bank’s downfall. With payouts on the horizon, the sale of Bank of Cyprus shares marks a turning point in the long and difficult process of compensating depositors.
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