Lombard Bank has no exposures to Cypriot banks even though its largest shareholder is the ill-fated Popular Bank of Cyprus, according to CEO Joseph Said.

Speaking to The Times, Mr Said insisted the Cypriot banking crisis had “absolutely no effect” on Lombard Bank’s operations.

“Lombard has no exposure at all to Cypriot banks and Laiki (Popular Bank of Cyprus) is a shareholder like any other shareholder,” he said.

Under the terms of a bailout deal agreed by EU finance ministers and the International Monetary Fund on Sunday, the Cypriot Government will have to wind down Laiki, the second-largest bank, with depositors holding more than €100,000 likely to face big losses.

Laiki has a 49 per cent shareholding in Lombard Bank, making it the single largest shareholder. The majority of shares are held by Maltese investors.

Mr Said explained that even if Laiki’s shares have to be sold, it will have to seek prior approval from the regulator. “The law states that anybody who owns more than five per cent shareholding has to seek approval from the Malta Financial Services Authority before selling or reducing his shareholding.”

Cyprus’s two largest banks were badly bitten by the Greek financial meltdown after they were forced to take a cut on investments there when Greece was bailed out.

The Cypriot Government had to bail out the banks and in turn asked for a bailout from the EU. The €10 billion Cyprus bailout was approved in the early hours of Monday by eurozone finance ministers, the ECB and the IMF.

Lombard Bank is listed on the Malta Stock Exchange and two weeks ago, when presenting the financial results, directors recommended shareholders approve a 4.3 per cent increase in dividends to €0.12 gross per share when the annual general meeting convenes next month.