Calm Prevails as Cypriot Banks Open Doors in Greece

Customers descended on the Cypriot banks in Greece on Wednesday, when branches opened their doors for the first time in 12 days. But it was nothing like the rush to liquidate that some experts had feared.

By 8 a.m., lines had formed at many of the more than 300 Greek branches that were owned by Cypriot banks until Tuesday. But they were not much longer than those usually seen after a long weekend.

While some jittery depositors said they had withdrawn the bulk of their savings, others appeared unruffled, saying they were just going about their usual banking business.

As well they might. Piraeus Bank, one of the largest Greek financial institutions, this week took over the local branches of the Cypriot lenders Bank of Cyprus, Hellenic Bank and Laiki Bank, also known as Cyprus Popular Bank. As a result, the deposits in those branches, which total about €15 billion, or $19 billion, roughly 10 percent of the total savings in Greece, will not be subject to any of the losses or capital controls that will hit some bank deposits in Cyprus.

Even so, the Cypriot debacle has rattled some savers enough for them to want their money back, regardless of who now owns their banks. Outside the main branch of Bank of Cyprus in central Athens, Panagiotis, a 40-year-old salesman who has been unemployed for three years, and who did not want to give his last name, said he had just withdrawn €1,000, the bulk of his savings.

“I left €20 so they don’t close the account,” he said, adding that he planned to stash the money in a bookcase at his home. “I don’t trust banks anymore.”

For Alexandra Kordou, a 54-year-old cleaner, the protracted bank freeze was compounded by a personal crisis. After her mother died of a stroke last Friday, Ms. Kordou was forced to borrow money from relatives because she had no A.T.M. card.

“We didn’t have the money to bury her,” she said, explaining that her €6,000 cash withdrawal on Wednesday would go toward loans and “other necessities.”

“I left €300 in the bank,” she said. “But I think I’ll need it soon.”

Bank staff said there were no restrictions Wednesday on cash withdrawals — in contrast to Cyprus where the authorities plan to put capital controls in place Thursday when branches reopen there, an effort to avert a bank run.

A senior employee at the headquarters of Bank of Cyprus in Athens denied reports that some customers had been denied access to their safe deposit boxes.

“This is a normal business day — busy but normal,” he said. “People are cashing their pensions, paying their bills and, yes, making withdrawals.”

A few blocks away, at a branch of Laiki Bank, a 79-year-old pensioner said he had transferred all his money to the largest lender, National Bank of Greece, a few days before Cypriot banks closed on March 15.

“I had a hunch things would go belly up, and I took it all out,” said the man, a retired print worker, who requested anonymity. “It’s all a huge mess, the Germans made sure of that,” he said, referring to Berlin’s tough stance on austerity measures for Greece and Cyprus. “National Bank is my best bet, I think, for now.”

Outside the same branch, a smartly dressed Cypriot woman who would not give her name said she had flown in to Athens from Nicosia for a couple of days “on business.” Asked whether she had withdrawn cash, she was defensive. “Of course not, there’s no reason to panic.”

Another Laiki customer, Dimitris Alevizopoulos, 32, said he was not worried as the deal with Piraeus stipulated that savings in Greece would not be subject to the losses that will be imposed on deposit balances of more than €100,000 in Cypriot banks.

“I don’t have €100,000, so I’m not worried,” the accountant said, then smiled ruefully.

A retired employee of the state telecommunications company, 60-year-old Christos Palaiologos, struck a similar tone. “I told the bank clerk I wanted to withdraw €130,000 just to see her reaction,” he said, after having paid off his credit card debts at the main branch of the Bank of Cyprus.

‘Seriously though, I’m calm,” he said. “It’s the rich that should be worried, for a change.”

One younger bank customer also displayed calm.

“I think they’ve taken enough precautions and Greek banks will be okay,” said Archontia Kaminari, a 27-year-old biologist at a research institute who had just deposited a check from her employer. But she does not plan to keep her money in Greece for long.

“I’m looking for work abroad, maybe in the Netherlands or in America,” she said. “Definitely not Germany.”

Article source: http://www.nytimes.com/2013/03/28/business/global/calm-prevails-as-cypriot-banks-open-doors-in-greece.html?partner=rss&emc=rss