Nicosia, July 7, 2015/ Independent Balkan News Agency
By Kyriacos Kyriacou
Co-operative Central Bank chief Nicolas Hadjiyiannis said Tuesday that Cyprus ranks first worldwide in non-performing loans, adding that the Co-operative sector is doing everything possible to address the problem.
During the last two years, the Co-operative sector has gone through significant changes as regards its operations and modernization, Hadjiyiannis told the 1st international conference held by the Co-ops in Limassol, under the title “Coops for you, bringing people together”.
He said that the Co-operative sector currently has €3.5 billion liquidity, employs 2.700 people, has the largest branch network in
Cyprus with 256 branches, its capital adequacy ratio is around 13.5% and its capital amounts to €1.3 billion. He noted however that the Co-operative sector “has a huge percentage of non-performing loans, a percentage which for Cyprus itself is a bad global pre-eminence”.
Hadjiyiannis said that there is no “magical solution” to this problem, but “it takes time, effectiveness, greater effort to deal with it and at the same time a national strategy is needed”.
“We as the Co-operative sector are doing everything we can to address this very serious issue at a strategic level” he said.
In February 2014 the European Commission approved the restructuring plan of the Co-operative Credit Sector, giving the green light to additional capital of €1.5 billion to boost and shield it.
As a result of the recapitalisation of the Co-operative sector, the Republic of Cyprus holds 99% of the shares in the Co-operative Central Bank and the Co-operative Central Bank holds 99% of the Co-operative Credit Institutions.
The 1% is owned by the Co-operative Central Holding Company representing its member Co-operative Societies.
“Further cuts in interest rates”
Meantime, the Cypriot President Nicos Anastasiades said that banks must cut interest rates further to converge with the European standards.
He noted that despite recent reductions, the average interest rate in Cyprus remains well above the European average.
“The convergence of the country`s interest rates with European standards should be a goal that we must achieve as quickly as possible if we want to talk about an economy that is competing equally in the European environment,” Anastasiades told the 1st international conference held by the Coops in Limassol, under the title “Coops for you, bringing people together”.
In his speech, read out by Energy, Commerce, Industry and Tourism Minister, Yiorgos Lakkotrypis, the President of Cyprus said that the biggest problem the Cooperative sector and the whole banking system are faced with is the non-performing loans.
“This is where we need to see the ‘human face’ of the Coops he noted, adding that the state “has equipped the economic partners with the appropriate institutional framework”, that is the foreclosures and the insolvency laws.