Co-op freezes deposit accounts of borrowers with NPLs

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By Stelios Orphanides

Four days after the approval of the deal to sell its healthy operations to Hellenic Bank, the Cyprus Cooperative Bank froze deposit accounts of customers with non-performing loans, a source said.

The state-owned lender took the decision on Thursday and after having done so also in the past, a Co-op source said in a telephone interview on Friday. The funds are held on non-current accounts and do not exceed in each case the amount of the outstanding loan.

“The number of affected customers is very small and accounts for roughly 0.1 per cent of the total,” the Co-op source said.

On Monday, the shareholders of the bank, owned to over 99 per cent by the government, approved Hellenic Bank’s proposal to acquire its operations, including €9.7bn in deposits, €4.6bn in performing loans, €1.6bn in cash and €4.1bn in government bonds for a total of €74m. Hellenic said that it will add roughly 400,000 new customers following the completion of the deal. The decision to wind down the Co-op’s operations became necessary after the bank failed to reduce its stock of non-performing loans which made up six tenths of the total.

Following the completion of the transaction, the government will assume control of the bank’s delinquent loans after depositing €3.5bn at the Co-op.

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About Author

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