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Cyprus: Societe Generale To Run Local Bank Alongside Offshore Operations

by Lorys Charalambous, Tax-news.com, London

11 May 2001

French banking group Societe Generale's Cyprus subsidiary, Societe Generale Cyprus Ltd, has become the first international bank in recent years to secure a permit to open a fully fledged local bank in Cyprus.

Societe Generale has maintained a presence in Cyprus since 1985 but has operated purely as a traditional offshore bank. Now a new local operation is to be set up, which is expected to be open for business by the end of 2001, or at the very latest by early 2002. It will be a separate entity from the offshore operation, which is headquartered in Nicosia with a branch in Limassol. Societe Generale General Manager, Gerard Malhame, told the Cyprus press this week: 'It is business as usual for our (offshore) customers who will continue to be serviced by our two branches and 50 staff.'

Of the new local bank, which is viewed as a positive development for the Cyprus financial scene, Malhame said the aim was to have at least one branch in all towns, adding: 'We aim to open four branches within the first 30 months of operations, two of which are expected to open by the end of 2002.' The branches will probably be staffed by a number of personnel currently working at the offshore bank, plus some new recruits.

Malhame said the development had come about because Societe Generale Cyprus wants to be 'a universal bank for the best local corporations and the high net worth individuals.' Malhame believes that as Cypriots increase their business dealings with Europe, especially when the island achieves EU membership, they will increasingly need to bank with an established and reputable European operations.

Malhame was quoted in local publication the Financial Mirror as saying: 'We are positioning ourselves now to be ready when all restrictions are lifted. Our offshore experience has proved that patience combined with determination and the zeal to offer the best at competitive rates will finally pay off.'

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