Finance minister Harris Georgiades said that the government is considering compensating depositors affected by the bail-in in 2013 with shares in the Cooperative Central Bank.
The finance minister, who was addressing lawmakers in his annual budget speech on Friday, said that the €1.7bn capital injection into the lender, 99-per-cent owned by the government, “has been given in the name of our fellow citizens and I believe that it is an imperative to return the coops to the citizens as soon as possible”.
“Receiving this amount is not a priority but instead to ensure that the coops will have a future and prospects away from the state’s asphyxiating interventions,” he said. “In the very near future, we shall elaborate and discuss options in this direction, namely to return the coops to the citizens without excluding options concerning our fellow citizens who suffered losses from the haircut”.
The Cooperative Central Bank is preparing for a listing on the Cyprus Stock Exchange in an attempt to issue new shares as part of a gradual increase from 2018 onwards. As a result of the capital increase, the government’s share is expected to ultimately shrink to 25 per cent.
Georgiades said that he wouldn’t like the coops to become yet another “semi-governmental” organisation, weeks after the parliament passed a law limiting the auditor general’s competences in auditing the lender, which the government backed with the need of preserving the bank’s flexibility to act in a competitive environment.
“I want to be clear that such a prospect would not benefit the coops,” as it would violate European state aid regulations and would deprive the bank flexibility and effectiveness, he said.