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Deposits in Coops surge

04/09/2009 06:45
The 110 Cooperatives managed to change drastically the deposit conditions in Cyprus, offering higher deposit rates than the commercial banks. In 2009, the Coops gained more deposits than all the commercial banks did altogether, while in a year they gained a market share of 2.20% to the burden of the two biggest banks. According to new Central Bank data, the Coops returned to the second place in deposits, covering last year’s lost ground, when the war between the old and the new players had generated significant losses in their deposit portfolios.

The Coops’ share in deposits reached 21% in July for the first time after many years. Since early 2009, the Coops managed to attract around €1.5 billion of the total €2.5 billion of the new deposits in the system, capitalizing the arbitrage on the deposit rates to the burden of the banks.

The two biggest banks kept their deposit rates to lower levels than the Coops, in an effort to eliminate the distortions in the market. Bank of Cyprus ranked first in deposits but lost a share of 1.6% in a year and Marfin Popular Bank fell to the third place, losing 1.1%.

The bank losses are even bigger, taking into account that most of the new deposits stemmed from the state, which deposited millions of euros to two of them. Excluding those sums, the two banks seem to have lost significant deposits by individuals and businesses.

Alpha Bank lost a significant share of 0.8%, while National Bank (Cyprus) another 0.15%.

On the other hand, Hellenic Bank gained 0.13% in 2009. Since late 2008, its new deposits reached €0.5 billion.

Similarly, USB increased its share by 0.24%, Cyprus Development Bank by 0.15% and Eurobank by 1.04% partly due to the transfer of deposits from overseas.