Fully compensating the 13,000 bailed-in depositors and bondholders of Bank of Cyprus and the former Laiki Bank could place a significant strain on state finances, with total costs estimated at €2.2 billion, according to preliminary calculations by Finance Ministry technocrats.

A source familiar with the cost assessment process clarified that fully covering all affected depositors and holders of bank securities is highly unlikely. "At present, there is no fiscal capacity to provide 100% compensation to those impacted by the Eurogroup decisions of March 2013," the source stated.

According to bank records from Bank of Cyprus and the former Laiki Bank, approximately 33,000 depositors were affected by the 2013 bail-in. However, many have not submitted claims, despite multiple deadline extensions by the Finance Ministry. Some claimants may have passed away, leaving unresolved cases.

To address this, the two associations representing bailed-in depositors and bondholders secured a provision during negotiations with the Finance Ministry, allowing first-degree heirs to submit claims on behalf of deceased beneficiaries.

Reports suggest that the first compensation installment, ranging between €170 million and €190 million, will be disbursed by the end of June.

Currently, the National Solidarity Fund (NSF) holds a €260 million reserve, which will be used for initial payments. President Nikos Christodoulides confirmed during a meeting with the Bailed-In Securities Holders Association that the government will allocate €50 million annually from the state budget toward compensation.

The first installment of approximately €180 million will cover claims from Bank of Cyprus and Laiki depositors.

Discussions within the Finance Ministry suggest that former Bank of Cyprus shareholders may be considered for future compensation, though no official commitments have been made.

During his recent meeting with bailed-in bondholders, President Christodoulides did not address this issue. However, sources indicate that while the government is exploring options, the fiscal burden would be substantial, as 92,000 Bank of Cyprus shareholders could become eligible for claims.

At this stage, there are no plans to open a compensation platform for former Bank of Cyprus shareholders.