Cyprus Mail

Plundering of co-op banks now stopped

Co-op banks have been plundered over the years but it has now stopped, Finance Minister Harris Georgiades said on Tuesday, warning that past mistakes must not be repeated.

Speaking before the House Watchdog Committee, Georgiades said the social nature of the co-op banks had been abused in the past.

“In recent years it was a plunder that has now stopped,” he said.

There have been numerous cases of mismanagement in the sector, mainly emerging after it was nationalised as part of the island’s bailout agreement in 2013.

The most recent one concerns Limassol’s Ayia Fyla co-op where 11 people are facing charges in connection with a loan scam worth almost €12m.

Taxpayers paid €1.5bln to bail out the sector in 2013 and another €200m recently as it sought to bolster its capital ahead of January 1, 2016, when states were banned from putting any money into banks.

The sector has been reduced in size through mergers, which saw Cyprus’ 93 co-operatives merged into 18. The mergers were completed in 2014.

The sector has shed some 11 per cent of its staff, 2,652 from 2,976 at the end of 2013, and cut its operating cost by around 25 per cent.

It has hired 108 people since then.

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