Cyprus Mail
Business Cyprus

Hellenic trying to resolve issue of offset co-op accounts

Ioannis Matsis

Hellenic Bank is trying to resolve the problem created by the co-op bank, which had off set customers’ deposits against loans and other obligations on the last day of its operation.

Those accounts were not transferred to Hellenic, which acquired certain co-op assets and liabilities at the end of the previous month, making the operation of some businesses impossible, as the co-op bank no longer has a banking licence.

It is understood that the legacy entity, which replaced the co-op bank, does not have the millions needed to reverse the decision.

Hellenic Bank CEO Ioannis Matsis said on Monday that the lender had given a solution for 4,562 accounts, most being retail accounts including small and medium retail clients, and was waiting for supervisor approval to transfer them.

Matsis said certain current accounts with overdrafts were not transferred to Hellenic because under European Central Bank regulations they had been categorised as non-performing loans.

The reason was because the debtor had other, non-performing loans at the co-op.

The setoff and subsequent freezing of the accounts created problems to vulnerable groups like pensioners, who counted on the cash.

During the weekend, Matsis said, work was done and a solution was found but it needed the approval of the Central Bank.

The 4,562 current accounts included in the deal have an overdraft limit of €25m and a balance of 21m.  The majority of the accounts, 3,673, belong to retail clients, including 889 to small and medium businesses.

There are however, thousands more with NPLs whose accounts have been transferred to Spain’s Altamira, which was contracted in 2017 to administer the co-op’s bad loans.


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