The Bank of Cyprus Group announces that at the Board of Directors meeting of the Bank of Cyprus Ltd, which was held on 6 February 2003, it was decided to proceed during 2003 with the transfer of the business of Bank of Cyprus (London) Ltd (?BCL?) to the UK branch of Bank of Cyprus Ltd (?BOC UK branch?).

The intended transfer of business will create an enlarged BOC UK branch that will encompass the whole of the BOC Group's UK banking business and is expected to achieve a material reduction in the regulatory capital required to support the BOC Group's UK operations, as well as operational efficiencies and cost savings. The intended transfer will enhance the Group's competitiveness and will be in the best interests of its customers and staff.

The enlarged BOC UK branch will operate as a separately managed unit with a dedicated UK management team, as is presently the case with BCL. The UK Board will continue to operate in the same way, but in a non-statutory capacity.

Following advice from legal and tax advisers in the UK and Cyprus, as well as from leading English counsel, the proposed transfer will be effected by way of a court order under Part VII of the Financial Services and Markets Act 2000 of the UK and is subject to the approval of the Financial Services Authority of the UK and the Central Bank of Cyprus. Once their approval is obtained, an application will be made to the English court to sanction the transfer.