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Is Cyprus' Last Remaining Big Bank Set For An Unexpected Liquidation?

Tyler Durden's picture


As part of the weekend's Cyprus parliamentary vote-bypassing "bank resolution", we learned that the second largest Cyprus bank, Laiki, will be liquidated, with the bulk of its good assets rolled into what would remain of the first and only remaining major bank in the island: Bank of Cyprus (whose uninsured depositors would also suffer a haircut, but supposedly a smaller one, less than 30%). Then, in a very surprising move overnight, news hit that the Chairman of this last standing bank, Andreas Artemis, has tendered his resignation.

Why now, when everything is supposedly fixed and when the impression of stability is paramount? Perhaps the reason is that as CNBC's Michelle Caruso-Cabrera reports from Cyprus, there is now an rumor that the "other" bank - Bank of Cyprus - may also be on the verge of liquidation.

While this is unsubstantiated for now, it would make sense in the aftermath of yesterday's confusing announcement of a select bank reopening today, followed hours later by an extension of the bank closure through Thursday (at least, likely longer), but more importantly, following reports that Russian depositors may have already long pulled out their cash from Cyprus, meaning not even full impairments on all uninsured depositors will be enough to cover the capital shortfall, with the only option being impairment of the insured depositors after all... or bank closure.

Keep a close eye on what happens here next because if the only remaining "good" Cypriot bank is shuttered, then the entire European bailout package, cobbled in the last hours of Sunday, goes poof.

From Michelle Caruso-Cabrera:

Bank of Cyprus employees now inside. They are here because of rumors that BofC will be liquidated like Laiki Bank.

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Tue, 03/26/2013 - 09:12 | 3376270 LawsofPhysics
LawsofPhysics's picture

"Fuck you, pay me" - Goodfellas.  Roll tha god damn guillotines already.

Tue, 03/26/2013 - 09:13 | 3376275 greased up deaf guy
greased up deaf guy's picture

aaaaaaaaaaand it's gone...

Tue, 03/26/2013 - 09:17 | 3376295 kaiserhoff
kaiserhoff's picture

What is Jean Luc Picard doing in the back row???

Tue, 03/26/2013 - 09:23 | 3376332 yrbmegr
yrbmegr's picture

I didn't think Picard had hair.

Tue, 03/26/2013 - 09:27 | 3376363 unrulian
unrulian's picture

He's come back in time to catch the Ferengi that have infiltrated the ECB

Tue, 03/26/2013 - 09:30 | 3376373 BaBaBouy
BaBaBouy's picture

Profit ... Arrrrr, PROFIT ...

Tue, 03/26/2013 - 09:30 | 3376374 Pladizow
Pladizow's picture

Tylers, does "unexpected" have a new defenition?

Tue, 03/26/2013 - 09:36 | 3376395 NotApplicable
NotApplicable's picture

Not when viewed through the Troika's rose-colored glasses.


Tue, 03/26/2013 - 09:48 | 3376442 Joe Davola
Joe Davola's picture

I'm kinda fuzzy on this whole good/bad thing.

Tue, 03/26/2013 - 10:26 | 3376618 BurningFuld
BurningFuld's picture

What a freakin' gong show.  I'm sure these "Ministers" or whatever the fuck they are are not even looking at the current Banks Balance sheets when they make their sweeping decisions. They SHOULD have locked these Banks down tight sat down and got firm numbers....this is just like trying to hit a moving target while riding a horse at full gallop.

Tue, 03/26/2013 - 11:02 | 3376906 DonutBoy
DonutBoy's picture

Oh it's pretty simple.  The Russian mobster explains to the banker what's going to happen to the banker's family if his money doesn't magically make it out from under the "lockdown"

Tue, 03/26/2013 - 14:25 | 3378035 Buck Johnson
Buck Johnson's picture

I know, they fucked up big time.  By allowing the banks to still be open via it's subsidiaries (to get their money out) and not locking down the bank to get real numbers on what the bank owes and has for assets.  I think this rumor will be found to be correct, I think everything is going to fall apart either Wed or before the bank "opens" on Thursday.  And even with capital controls, they can't allow people to draw money out it would start to shrink their assets.  The insured are going to lose their money.

Tue, 03/26/2013 - 09:38 | 3376398 NotApplicable
NotApplicable's picture



Tue, 03/26/2013 - 09:40 | 3376406 Croesus
Croesus's picture

Speaking of Ferengi, don't forget about Merkel.....

Tue, 03/26/2013 - 09:29 | 3376368 BaBaBouy
BaBaBouy's picture

Beam All Them Poor Souls Up, Scotty ...

Tue, 03/26/2013 - 09:36 | 3376396 Miss Expectations
Miss Expectations's picture

His big scene is coming up...


Tue, 03/26/2013 - 09:46 | 3376435 TrumpXVI
TrumpXVI's picture

JLP has to have his moment of glory.  

He's the one who will get to say, "Make it so."

Tue, 03/26/2013 - 10:46 | 3376753 krispkritter
krispkritter's picture

Piloting the 'Banking Enterprise' and boldly going where no bank has gone before...with photon torpedoing of depositors accounts any minute now...


Tue, 03/26/2013 - 11:56 | 3377312 FeralSerf
FeralSerf's picture

He's waiting to get his haircut.

Tue, 03/26/2013 - 09:19 | 3376309 LynRobison
LynRobison's picture

If this keeps up, I might start to get the impression that fractional reserve banking is not a stable system...

Tue, 03/26/2013 - 11:29 | 3377149 Peter Pan
Peter Pan's picture

Not just fractional reserve banking..........evn banking your money is not safe.

Tue, 03/26/2013 - 09:31 | 3376276 GetZeeGold
GetZeeGold's picture



"Fuck you, pay me" - Goodfellas


You're funny...


Tue, 03/26/2013 - 10:16 | 3376557 Mark Urbo
Mark Urbo's picture

"Your worried you can't swim ?  Hell, the fall will kill you..."

Butch to Sundance

Tue, 03/26/2013 - 09:35 | 3376390 Groundhog Day
Groundhog Day's picture

Looks like Andreas might be in a postion to get a job at a larger institution now that he has one liquidation under his belt

Tue, 03/26/2013 - 11:21 | 3377073 SDShack
SDShack's picture

Andreas got tired of having one after another Russian Oligarch call him with the same account PIN.... Y-O-U-R  D-E-A-D

Tue, 03/26/2013 - 09:37 | 3376397 Teamtc321
Teamtc321's picture

"Cyprus bail-out: savers will be raided to save euro in future crises, says eurozone chief

Savings accounts in Spain, Italy and other European countries will be raided if needed to preserve Europe's single currency by propping up failing banks, a senior eurozone official has announced."


Tue, 03/26/2013 - 09:17 | 3376300 jughead
jughead's picture

I see the problem...two Major Banks under the command of General Confusion.


Tue, 03/26/2013 - 11:17 | 3377044 SDShack
SDShack's picture

Don't you mean General Disarray.

Tue, 03/26/2013 - 09:24 | 3376345 johnnymustardseed
johnnymustardseed's picture

Which bank is not propped up?

Tue, 03/26/2013 - 09:31 | 3376362 Sudden Debt
Sudden Debt's picture

remember Bankia?



oh... and real value? MINUS 4,18 BILLION EURO'S!!!!













Tue, 03/26/2013 - 09:52 | 3376433 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

There is no Russian black money to steal there and too much bad derivative exposure to keep hidden until they can adjust their positions accordingly so when the domino falls they can cover those bad trades with new bad trades elsewhere.

As the dominoes fall they will have less and less counterparties to hide the toxic turds with more toxic turds. At some point even Benny Boy here won't be able to cover those bets with his back channel bailouts anymore. This isn't going to end well at this point no matter how long they keep it up now.

Tue, 03/26/2013 - 10:20 | 3376588 Sudden Debt
Sudden Debt's picture

No Russian Money?! HA!



Tue, 03/26/2013 - 09:25 | 3376352 fonzannoon
fonzannoon's picture

(Collect call from George Orwell)

(I'll accept)

"The decision to further push back the re-opening of Cypriot banks, which have been shut since March 16, even as the country hammered out a last-minute bailout deal, may be seen as a signal of further uncertainty in the crisis-hit island nation. But analysts tell CNBC that on the contrary, the move will help restore investor confidence.

The extension of the banks closure to Thursday, to prevent a run on deposits, shows that the authorities are working hard to put in place measures to stabilize the battered banking system, said experts.

"People who have got money with these banks will want them to re-open, but it's much more important in terms of global financial stability for it to be done the right way," said Steve Brice, chief investment strategist at Standard Chartered Bank in Singapore"


Tue, 03/26/2013 - 09:51 | 3376460 Agent P
Agent P's picture

I'm sure they're just redecorating the lobby and don't want to re-open until all the finishing touches are in place. </sarc>

If these banks go under and it turns out to be true the Russkies were able to pull funds out during the closure, I have a feeling Cyprus will burn.

Tue, 03/26/2013 - 10:02 | 3376507 Winston Churchill
Winston Churchill's picture

Very true.

Reports "i'm getting are that violence is not far away.(have Cypriot nieces and nephews).

Tue, 03/26/2013 - 10:35 | 3376664 BurningFuld
BurningFuld's picture

Too bad Cyprus did not have an army. It would have taken over control by now.

Tue, 03/26/2013 - 10:05 | 3376521 Super Broccoli
Super Broccoli's picture

"to restore investors confidence"  MWAHAHAHAHAHA :-)

"people with money in those banks" MWAHAHAHAHA it's long gone fellas, forget it !

Tue, 03/26/2013 - 10:35 | 3376670 NoDebt
NoDebt's picture

I said in yesterday's "I believe" thread that those banks will not reopen.  I stand by that statement.

Not trying to take credit- I was not the first one on ZH to say so.  Just pointing out that when troubled banks close, they generally don't reopen- ever.

Tue, 03/26/2013 - 09:14 | 3376281 grunk
grunk's picture

No chess pieces, no chess.

Tough break, eurotrash.

Tue, 03/26/2013 - 09:14 | 3376282 the not so migh...
the not so mighty maximiza's picture

the good bank is actually a sorta kinda borderline bad bank also

Tue, 03/26/2013 - 09:19 | 3376307 kaiserhoff
kaiserhoff's picture

These guys could fuck up a two car funeral.

Tue, 03/26/2013 - 09:46 | 3376434 rzero
rzero's picture

Bad bank, badder bank.

Tue, 03/26/2013 - 09:15 | 3376287 Dr. Engali
Dr. Engali's picture

Corzined bitchez!

Tue, 03/26/2013 - 09:41 | 3376411 Winston Churchill
Winston Churchill's picture

KreditAnsalt'ed bitchez.

Its not ryhming,its repeating.

Tue, 03/26/2013 - 10:36 | 3376676 BurningFuld
BurningFuld's picture

They need to fly in MC Hammer to run their finances.

Tue, 03/26/2013 - 09:16 | 3376293 Desert Irish
Desert Irish's picture

About the only thing left that could save the EU further embarrassment is a giant asteriod hitting Cyprus...

Tue, 03/26/2013 - 09:21 | 3376320 stock trout
stock trout's picture

which explains the presence of Jean Luc Picard in the back row. 

Tue, 03/26/2013 - 09:17 | 3376294 francis_sawyer
francis_sawyer's picture

Somebody tell MCC that if she's trying to score a Becky~Warren for herself, all the Russian billionaires have left the building already...

Tue, 03/26/2013 - 09:42 | 3376415 Hippocratic Oaf
Hippocratic Oaf's picture

MCC is a pitching wedge: she looks good from 100 yards.

I'm watching Bob Piss-on-me on CNBS and Cramer pushing this BS market and cheerleading housing.

Even Santelli is jumping on board.

Fuck me!

Tue, 03/26/2013 - 10:12 | 3376541 Mark Urbo
Mark Urbo's picture

More like a 7 iron...

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