COOP: Restructuring loans unit to be enhanced

The unit in charge of restructuring loans in the cooperative sector will be significantly enhanced in terms of staff, in accordance with the relevant action plan sent to the European Commission on 15 September by the Central Cooperative Bank (CCB), as provided by the fifth updated memorandum with Troika, Cyprus' international lenders.

According to CNA sources, by next November all non-performing loans, as well as loans that have expired and loans that have been brought before a court, will be managed by the management of the Cooperative Institutions.

Until now, the unit was dealing with NPLs worth more than €200.000 that were non performing for more than 180 days.

The Coops have been nationalized when the Cypriot government injected €1.5 billion into the sector to cover its capital shortfall, calculated in the adverse scenario of a due diligence exercise, carried out by a US asset management firm, Pimco, as part of the conditions of a €10 billion bailout Cyprus has agreed on with its international lenders.

As part of bailout conditions, the Coops implement a restructuring plan that will see their number reduced from 193 to 18 by the end of March 2014. Non performing loans in the Coop sector 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.