An extraordinary shareholders’ general meeting of the Cooperative Central Bank (CCB) approved on Friday the lender’s merger with the 18 separate cooperative saving banks (CSBs) it administers, the bank said.
“The legal consolidation constitutes a natural development in the Co-op’s restructuring and modernisation procedure given the operational consolidation of the 18 CSBs and the important initiatives that have been undertaken with the transfer of their assets and staff to the CCB,” the bank said.
The CCB, which received since 2013 almost €1.7bn in taxpayers’ money in capital injections, as part of Cyprus’s bailout agreement, and is as a result 99-per-cent government-owned, said that it expects that the completion of the merger will increase its value and improve corporate governance in the bank, allowing it to become “more transparent, competitive and attractive”.
The CCB is working on completing its Cyprus Stock Exchange listing in 2017, before it begins with subsequent share issues to increase its capital and reduce the government’s stake to 25 per cent. Finance minister Harris Georgiades said in an interview that the finance ministry is considering “handing over” shares to the bank’s workers, members and customers, as well as to citizens who lost money in Cyprus’s banking crisis.
“The legal consolidation will in no way affect customers (or) members of the Co-op while it is expected to give its efforts to further strengthen its balance sheet a boost,” the bank said.
The bank, which had €7.4bn in non-performing loans in September in a €12.3bn overall loan portfolio, posted last year an after-tax loss of €122.7m. In the first nine months of 2016 it posted a net profit of €62.1m.
The CCB said that the consolidation will allow the bank to better utilise its staff and increase job security.