By Stelios Orphanides
The state-owned Cyprus Cooperative Bank expects to reduce its non-performing loans stock of €7.2bn by over €1bn before the end of the year, the Cyprus News Agency reported on Friday without citing a source.
The lender, which received almost €1.7bn in taxpayers’ money in the form of capital injection in 2014 and 2015, is expected see its non-performing loans drop to slightly over €6bn and the reduction to continue over the quarters to follow, the agency reported without revealing the source of its the information.
On August 22, the bank’s chief executive officer Nicholas Hadjiyiannis said that he expected earnings in the third and fourth quarter this year to reflect an expected drop in delinquent loans, adding that an immediate “considerable reduction” was as an “imperative”.
The bank, which following the 2015 capital increase exhausted all available margins for tapping state aid, is working on a Cyprus Stock Exchange listing which will allow it to raise private capital via the successive share issues over a three-year period starting next year.
On August 21, Yiangos Demetriou, the head of the Central Bank of Cyprus’s supervision department, said that governor Chrystalla Georghadji asked finance minister Harris Georgiades to delay the implementation of a government decision to donate Co-op stock in the possession of the government until the bank completed the first stage of its capital increase. He also warned that the bank could go out of business unless it was allowed to implement its plans to reduce bad loans.
In July, the Co-op announced an agreement with Spain’s Altamira for the management of its non-performing loans and real estate assets.