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Our View: Akel’s nostalgia for ‘people-centric’ co-ops is misplaced

SOME political parties still refuse to accept that the Co-operative Central Bank has lost its co-op status and has become just another bank. In September it will be listed on Cyprus Stock Exchange, while 25 per cent of its shares would have been given to its customers, attorney-general permitting, with the state remaining the majority shareholder.

However, once the CCB, – renamed Co-Operative Cyprus Bank – this week, is placed on a healthy footing, which may take a few years, the state would try to sell all the shares it holds in order to recover a part of €1.7 billion of the taxpayer’s money it put into the co-ops to save them from bankruptcy. The CCB will be just another CSE-listed, public company with the objective of recording healthy profits for its shareholders.

To become a healthy bank, the CCB needs to reduce its non-performing loans (NPL) which are currently a staggering 60 per of its loan portfolio. The board’s decision to set up a joint venture with the Spanish company Altamira, which specialises in dealing with bad loans, was correct given that the bank’s attempts to reduce its NPLs had been far from successful.

This business move has not met with the approval of the political parties. Akel spokesman Stefanos Stefanou issued a statement, saying that the setting up of such operations “facilitates the mass sale of properties to big investment funds.” Combined with the closing of 90 sub-branches in rural areas, Akel “wonders how the bank is performing its people-centric role and in what ways it was maintaining its local character.” Stefanou asked: “Is it, any longer, in a position to safeguard co-operative principles and values?”

Edek wished success to the joint venture, but warned that the “human face and social sensitivity of the co-operatives should not be lost.” It seems that neither Akel nor Edek have yet realised that the reason the co-ops went bankrupt was their human face and social sensitivity. Thanks to the co-operative values and their people-centric role, the co-op banks were mismanaged and corrupt organisations driven to bankruptcy by the political parties and their inadequate placemen that were in charge.

This people-centric role, which included borrowing money and not paying it back, cost the taxpayer €1.7bn, which the state has a moral obligation to recover eventually. The investment will not be recovered by the Co-operative Cyprus Bank maintaining it social sensitivity, but by acting like an uncaring, insensitive bank, with the sole objective of maximising profits.

 

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