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Cyprus banks stay open in UK, savers protected

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(Globalpost/GlobalPost)

Branches of the Bank of Cyprus and another Cypriot bank, Laiki, have remained open in Britain while banks on the island have been closed and they say their depositors have not been affected by the 'hit' that savers in Cyprus have taken.

Cyprus announced that banks will re-open on Thursday after being closed for two weeks while it negotiated an international bailout, but branches of Cypriot banks in Britain have been operating throughout the crisis.

However Bank of Cyprus told AFP on Wednesday that it was not possible to withdraw money frozen in accounts in Cyprus from its branches in Britain.

Bank of Cyprus savers have been warned that under the conditions of the bailout, savers with more than 100,000 euros stand to lose 40 percent of their money.

But a spokesman for the bank's British arm said: "There is no effect on deposits with Bank of Cyprus UK Limited which is a UK bank.

"Understandably we have had some enquiries following the announcement.

"However, as a UK bank, our customers are reassured by the fact that their savings are protected under the UK's Financial Services Compensation Scheme and they are not impacted by the measures announced."

Cyprus' number two bank, Laiki, or Popular Bank, which is being wound down under the terms of the bailout, was unavailable for comment in Britain on Thursday.

The Cypriot finance minister has said that Laiki depositors face losses of up to 80 percent on deposits over 100,000 euros.

But a sign in a window of one of its branches in London said: "We have clarified with the Cyprus authorities that this levy, as proposed in the draft law, will have no effect on customer deposits held with the overseas branches of Cyprus banks."

Britain's finance minister George Osborne said on Tuesday he was seeking to protect Laiki's four branches in Britain -- three in London and one in Birmingham, central England.

"The Treasury is working with the Cypriot authorities on a British solution to the branch of the Cyprus Popular Bank," he told a parliamentary committee.

"Discussions are taking place at the moment. I can't say a great deal more about them but we are engaged in negotiations to try to avoid the branches in the UK becoming sucked into the Cypriot resolution process."

Cyprus gained its independence from Britain in 1960. Britain retains sovereign military bases on the island.

North London has a sizeable Cypriot community.

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http://www.globalpost.com/dispatch/news/afp/130327/cyprus-banks-stay-open-uk-savers-protected