Last month, Cyprus became the fifth Eurozone country to officially ask for an international bailout in order to protect its financial sector from exposure to Greece debt. For weeks, Cyprus has been trying to manage its options between a bailout from Europe's EFSF fund or a joint loan from either Russia or China.
The Cypriot government finally came to a decision and decided to seek financial assistance from the European Union's bailout fund, as the country sought to reduce the risk to its financial sector from any spill over from the Greek debt crisis.
The Bank of Cyprus has offered savings accounts in Britain for 50 years, including several best-buy deals. However, unlike most foreign-owned banks it has not until recently sought British authorisation. This means that if it got into trouble, savers would have had to look to authorities in Nicosia to pay compensation, rather than to Britain’s Financial Services Compensation Scheme.
However, last week, the Bank of Cyprus’ UK-based savers received good news, when their UK protection came into effect. Their savings now come under the protection of the British Financial Services Compensation Scheme. As a result, UK-based savers with the Bank of Cyprus are now guaranteed protection on deposits up to a maximum of £85,000 per person, by the FSCS. The Bank of Cyprus UK is now writing to customers informing them of the change.
UK savers with Santander, which includes the old savings brands of Abbey, Bradford & Bingley and Alliance & Leicester, are also safe to the same amount, as Santander UK is fully authorised in Britain, which means it enjoys the same compensation protection as other institutions.