Bank of Cyprus Needs 500 mln eur Bailout

Bank of Cyprus said it needs 500 million euros from the state to reach its 1.56 billion euro recapitalisation target, without which it will fail European Central Bank (ECB) stress tests at the end of this month.

The announcement comes 48 hours after the government decided to ask the EU for a bailout of its own. BoC said that irrespective of its application for government funds, it "remains healthy with significant pre-provision profitability and significant Tier 1 capital."

The bank is now under investigation because it initially announced that it only needed 200 million euros.

BoC and Laiki lost billions on their exposure to the Greek debt writedown earlier this year, in which private sector companies agreed to cut the value of their Greek debt holdings by 50 percent. Laiki Bank is in a more difficult position, as it needs 1.8 billion euros.

Most of the recapitalisation funds are expected to come from the EFSF, seen as crucial to save the banking and financial sector.

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