The cooperative movement will seek funding from third parties, the General Manager of the Cooperative Central Bank Marios Clerides has said.
Sources familiar with the matter have indicated that CCB is examining the possibility of collaboration with cooperative movements in other countries and is seeking European funds, in an attempt to boost lending.
Clerides told a workshop on the banking sector, hosted Saturday by the main opposition left-wing party AKEL, that the restructuring plan implemented by the CCB, as part of the assistance programme for Cyprus, and the EU state aid rules are limiting the granting of loans by the Coops.
The cooperative movement has received 1.5 billion state support from Cyprus’ 10 billion euro bailout programme, rendering the state the exclusive owner of the coops at 99%.
However, Clerides said that in a few days, the CCB will proceed to find sources for funding from third parties.
He also said that the “biggest challenge” for the cooperative movement is managing problem loans.
Nonperforming loans in the Coops reached 6.34 billion euro in January 2014 or 47.47% of total loans, rising by 4.96% compared with 6.04 billion euro in December 2013.
Addressing the same workshop Panicos Demetriades, Cyprus Central Bank Chief until April 10, said that the banks are maintaining high lending rates due to the high level of nonperforming loans, adding that it is difficult to reduce lending rates at a time that nonperforming loans in Cyprus’ banking sector reached around 50%.
Former Finance Minister of Cyprus Kikis Kazamias said that as the establishment of a Single Resolution Mechanism is underway in the EU, the Cyprus Government must request from the EU to renegotiate the amount added to its public debt to rescue the banks and the coops.
“It is the Government’s duty to claim equal treatment in an effort to relieve taxpayers and especially those who need social support” he said.
On March 25 last year Cyprus agreed with the EU and the IMF on €10 billion financial assistance package.
Get all the latest news and videos in your inbox. Register FREE