World Bank: Troubled Turkish Cypriot banks not peace burden

NICOSIA, Cyprus – The World Bank says integrating Turkish Cypriot financial institutions into a single banking system if ethnically divided Cyprus is reunified is unlikely to increase risks in the sector because of their relatively small size.

The Bank said in a statement to The Associated Press Wednesday that according to official figures, total assets of the entire banking sector in the island’s breakaway Turkish Cypriot north amount to 5 billion euros ($5.89 billion).

That’s less than 6 per cent of banking assets in the internationally recognized south.

The health of troubled Turkish Cypriot banks has been an important component of talks to reunify the island, which collapsed in July.

The bank said it’s unclear whether Turkish Cypriot banks would need to be recapitalized and by how much because no tests have been conducted.