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Banking in Cyprus has come under increasing pressure due to national and international regulatory issues:


  • In 2013, the Hellenic Popular Bank (Laiki) was liquidated as a result of the Cyprus Financial Crisis. Depositors in Bank of Cyprus saw a haircut take place on their deposits. 


  • In 2014, the US Financial Crimes Enforcement Network sanctioned FBME, leading to the suspension of the firm’s branch banking license by the Central Bank of Cyprus in 2015. 


  • In 2018, the Cooperative Bank of Cyprus was liquidated. Its portfolio of good loans was sold to Hellenic Bank, while the government of Cyprus took on its bad loans. 


  • Since 2014, Russian account holders have been under increasing pressure in Cyprus due to the embargo against Russia (Crimea, Donbass) as well as due to international political reasons. 


As a result, banks in Cyprus are today extremely conservative about both opening bank accounts as well as receiving and making international payments. 


International investors in Cyprus can choose to retain their banking operations outside Cyprus. This may be advantageous, depending on the strength of their banking relationships and the cost of doing business. 


A complete list of banking institutions in Cyprus is seen here. 


Within Cyprus, investors have to make a choice: 


  • Most international investors are required to register with the International Banking Units (IBUs) of most banks. This automatically means a high annual maintenance fee (usually € 300-600) plus high operating fees. There is no discernable difference in service quality between the IBU and local branches. 


  • The two leading banks by deposits are Bank of Cyprus and Hellenic Bank. Both have had a high non-performing loan book in the past, and the credit capability of both is limited. 


  • There has been a high penetration by Greek banks into Cyprus. Alpha Bank, Astrobank (formerly the Piraeus Bank merged with USB Bank), the National Bank of Greece (Ethniki) and Eurobank are all active players. 


  • RCB Bank, formerly the Russian Commercial Bank, has rebranded and is operating as a national bank in Cyprus. 


  • A range of other banks is operating on the island. 


Some key points of information: 


  • It is important to keep strong relations with banking branch and IBU staff. Most are highly professional and motivated.


  • Banking hours are limited due to strong workforce unionization. Do not expect London or New York banking hours. If your business depends on a strong banking presence, banking in Cyprus may not be the best solution for you. 


  • Banks are under incredible pressure for KYC and KYCC – Know Your Customer’s Customer. Be prepared to be questioned on even small transfers to and from countries like Russia or even the Baltic states (especially to institutions implicated in previous money laundering scandals). 


  • If you are expecting large incoming transfers, please be prepared for delays and lengthy requests for documentation.


  • Banking online software is typically primitive in terms of front-end design, customer / user experience and functionality. Expect to do most complex tasks at the branch. 


  • Banking fees are relatively high compared to other jurisdictions. Even SEPA transfers are typically expensive. This is due to a zero interest rate policy, which has depressed typical income from lending operations, as well as due to the high NPL volume in Cyprus. Fee income has been a necessary income support for the Cyprus banking sector. 


  • There are often mistakes made, most of which are due to legacy systems or inter-bank operations. It is important to carefully and continually monitor all bank statements and records. 

  • Due to a lack of credit, many Cypriot banks are rebranding debit cards as credit cards. Any debit card operations are done from an existing bank balance, not from credit. To secure this, many banks place a block of EUR 1,000 or more, even though the funds being spent have been paid in as cash. 

  • Investors should not expect generous loyalty awards on Visa cards or similar operations. Alpha Bank has an Aegean Airlines co-branded Visa card, where one Euro spent is equivalent to one mile on Aegean Airlines. Piraeus Bank used to have a Lufthansa Miles & More co-branded card. Astrobank has introduced a new card called Skash. 

  • Please note that in many cases, your accountant or lawyer will act as a bank referrer, assisting the process of account opening. 


Many investors state that their experience in the banking sector is among the least attractive aspects of investing in Cyprus. Please do not take your banking relationship for granted. 

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