Public sector workers’ unions and bank employees’ union Etyk are planning to create a new cooperative savings bank.

Civil servants’ union Pasydy secretary-general Stratis Matheou told the Cyprus Mail on Wednesday he was in favour of the plans.

“The middle class has suffered in the last 10 years because we lost the cooperative movement. That movement gave us easy access to loans and a friendlier banking experience,” he explained.

He was also keen to point out that the cooperative movement’s demise in Cyprus at the end of the last decade was not the fault of the movement at large but of a few poorly managed institutions.

“Our sector, which served public sector workers, teachers, and police force employees, only gave loans out to natural persons. We had fewer than 100 non-performing loans at time of closure,” he said.

“Some people obviously made mistakes, but the cooperatives in the public sector were healthy. Unfortunately, they closed them all in one fell swoop,” he added, insinuating that the move at the time had somewhat thrown the baby out with the bathwater.

He went on to say that the reformation of the cooperative movement is an “absolute necessity for the middle class”.

Asked about the steps towards such a bank’s creation, he said there is a “long process” ahead, but that the first moves have been made to bring it about. Additionally, he said the bank’s creation must be approved by the European Central Bank.

The European Central Bank told the Cyprus Mail that it considers “four main areas” when a bank applies for a licence.

Those include “the amount, quality, origin, and composition of the applicant credit institution’s capital and other regulatory requirements” and its “programme of activities, structural organisation, and business plan”.

In addition, it considers “fit and proper assessments” of the management of the bank in question, as well as a “suitability assessment” of direct and indirect shareholders,

These factors, it said, are assessed in cooperation with national supervisory authorities.

Plans for the creation of a cooperative savings bank had been announced by Etyk secretary-general Christos Panayides on Saturday.

“With this effort, we are aiming to expand our colleagues’ options for borrowing at low interest rates and thus satisfy their needs since, especially in recent years, due to the excessive increase in interest rates, they have suffered unimaginably,” he said.

He added that bank employees had asked for part of banks’ rising profits to be shared with their employees when their collective labour agreement is next renewed.

He spoke of “excessive profitability” that banks saw in the last financial year, and said the banks “should not forget” that employees sacrificed their own salaries and benefits to save the banks money when times were tougher.

“Our colleagues consciously and responsibly shouldered this disproportionate burden to save their banks. It is right and correct today, while they are making hundreds of millions in profits, that a part of these profits should return to these same colleagues,” he said.