Hellenic, Co-op sign state-guaranteed loan agreements with EIB


By Stelios Orphanides

Hellenic Bank and Cyprus Cooperative Bank signed a €40m and €25m loan deal with the European Investment Bank (EIB) respectively which will allow them to extend credit to small and medium-size enterprises (SME), the two lenders said.

Hellenic Bank, third largest Cypriot lender, said that the deal, the fourth of its kind, will allow it to provide financing of almost €53.4m to SMEs at low rates.

“The amount includes €40m in EIB funds and €13.4m in Hellenic Bank funds,” the bank said in an emailed statement on Wednesday, hours after signing the agreement. “The creation of the right fundaments for the future by providing liquidity to solvent SMEs which constitute the backbone of our economy, remains Hellenic Bank’s aim”.

The Cyprus Cooperative Bank’s chief executive officer (CEO) Nicholas Hadjiyiannis said that the state-owned bank already extended loans worth €25m to 116 SMEs via a scheme which included financing from the Luxembourg-based EIB.

“The most important economic sectors financed by the Cyprus Cooperative Bank concerned tourism, services, trade, healthcare, industry and agriculture,” he was quoted as saying in an emailed statement.

According to the Cyprus News Agency (CNA), Finance Minister Harris Georgiades signed the agreement on behalf of the Republic of Cyprus and the EIB’s Central and South-Eastern Europe director Anita Fuerstenberg-Lucius did so on behalf of the European Union’s bank. Hellenic’s CEO Ioannis Matsis and the Co-op’s CEO signed the agreement on behalf of their respective lenders.

The finance minister said that the cooperation with the EIB has allowed banks to extend 269 loans worth €440m to SMEs allowing the materialisation of 340 investment projects, which in turn helped create 821 jobs and boost growth by 0.3 percentage points in 2015 and almost 0.5 per cent in 2016.

Georgiades added that the loans extended as part of the cooperation with the EIB are performing.

“This is important also for our banking system, because extending healthy credit is likely the best way to tackle old delinquent loans and consolidate the balance sheet of banks,” he was quoted as saying by the CNA.

Fuerstenberg-Lucius said that Cyprus is the country which benefited the most compared to the economic output from loans from the EIB which made €333m available and disbursed more than €260m to the public and private sector last year, according to the CNA.


About Author

Stelios Orphanides is a journalist at CyprusBusinessMail.com. To contact Stelios Orphanides: [email protected]

  • Barry White

    For heaven’s and the EU Taxpayers’ sake, don’t provide these pseudo ‘Banks’ with any money to loan to ‘SME’s’ and others. It is not needed. There are billions in NPL’s in each ‘ Bank’ that will provide all the loans that the ecomomy needs for years.

    All the ‘Banks’ need to do is to insist that they be paid back and they will be.

  • costaskarseras

    It should be made quite clear that if any bank borrows money the transaction is between the institutions concerned. The lenders and borrowers must be made aware that in no way neither the Cypriots nor the people of the EU can be held responsible for bailing them out in the event of economic problems. The neoliberal policies, unleashed globally on the working people by giving the banks a free hand to do almost as they pleased, have reached the end of the road.

    The British government’s support of the banks so far has reached a staggering £850bn and the eventual cost to taxpayers will not be known for years. The effect of the cost of rescuing the banks can be felt in cuts in hospitals, schools and housing and the ever-increasing demand for food banks.

  • Wanderer

    “state-guaranteed” = taxpayers will be forced to pick up the bill. In other words, more of the same selling of unborn children into debt slavery perpetrated by the state.