Coops seen merging

At least 150 Cooperative Credit Societies from the 348 operating island-wide are seen merging and forming new larger groups or being absorbed by larger Coops as they rush to meet with new EU Directives and regulations.

There have been a number of mergers in recent months, with the total number of Coops now at 348 from 361 at the beginning of the year, as some very small Coops operating in the Yeroskipou, Tyllirias and Pharmakas areas merged while in mid-July there were a number of mergers in the Marathasas area.

The Coops need to merge, otherwise they will be shut down since they need to have at least CYP 600.000 in own capital and a minimum of 8% capital adequacy ratio under EU Directives and regulations.

The Coops currently hold a 30% share of total advances and 26% of total deposits with analysts expecting that eventually their number will shrink to below 100, with the 10 largest controlling the biggest market shares.

According to the Cooperative Central Bank, the Strovolos Coop is the largest, followed by the one in Limassol and then Larnaca, while other large Coops include those of the teachers, the police and some agricultural organizations.