Topic: Cyprus Bailout
MOSCOW, May 10 (RIA Novosti) – Cyprus Finance Ministry issued a decree on Friday lifting restrictions on financial operations for the Russian Commercial Bank, a subsidiary of state-run VTB, and OJSC Promsvyazbank, a Russian privately-owned bank.
The ministry said the move comes after the banks have met certain requirements. The decree applies for a seven-day period starting from the day of its official publication.
Earlier in the day, Cyprus Foreign Minister Ioannis Kasoulides announced that Russia has agreed to extend the terms of its 2.5 billion-euro loan to Mediterranean island nation.
Moscow earlier said it will closely watch the situation around the Russian Commercial Bank when deciding on the forms of its support for Cyprus’s financial system.
VTB, Russia’s second largest lender by assets, operates in Cyprus through the Russian Commercial Bank, which holds about 2 billion euros ($2.6 billion) worth of its client deposits. According to VTB, the Russian Commercial Bank is Cyprus’s third largest bank by assets, which total 14 billion euros ($18 billion).
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Any response would likely boomerang on Russia – the partnership between Rosneft and ExxonMobil is a case in point. The United States has hit Russia with a third round of sanctions. This time the Americans went with a higher caliber weapon, targeting Russia’s biggest energy companies (Rosneft and Novatek) and banks (VEB and Gazprombank).