Economist welcomes return of cooperative bank

The planned re-establishment of the cooperative bank could strengthen competition in Cyprus’ financial sector and benefit both consumers and the wider economy, according to the president of the Cyprus association of economics teachers Argyris Alexandrou.

His comments come after the initiative to establish the Pancyprian Cooperative Bank entered its capital raising phase, following approval of its public offering prospectus by the Cyprus Securities and Exchange Commission (CySEC).

The share offering will run from July 22 to November 17, 2026, with up to 42 million new shares, each with a nominal value of €1.00, being made available to investors through the Athlos Capital platform.

The initiative aims to establish a new cooperative bank, with the newly created participation company acting as the vehicle through which citizens and organisations can acquire shares.

“The effort being made is certainly for the common good and we welcome it,” Alexandrou told the Cyprus News Agency (CNA).

“It is positive that it is being recreated in such a short period of time,” he added.

Alexandrou said the new cooperative bank’s social mission would distinguish it from commercial lenders and deliver benefits to both society and the economy.

“When the cooperative was created, it was established for a good purpose and to protect vulnerable and poorer social groups,” he said.

He explained that the cooperative is a non-profit institution, unlike commercial banks.

“It will therefore benefit society and citizens,” Alexandrou said.

He also argued that the return of the cooperative bank would increase pressure on commercial banks to become more competitive.

“The existence of another bank, such as the Cooperative, will provide greater incentives for more businesses to compete, ultimately leading to better interest rates for citizens,” he said.

Alexandrou also commented on the profitability of Cyprus’ banking sector since the 2013 financial crisis and the bail-in of deposits.

He said banks now generate substantial income from charges and fees, in addition to interest earned on loans.

According to Alexandrou, customers are now charged for a range of everyday banking services, including carrying out transactions and maintaining current accounts.

“Banks are now financially secure, which explains the substantial profits they are recording, and their stability is not under threat,” he said.

Asked about the decision to allocate a large proportion of the 42 million newly issued shares to the public, Alexandrou said this reflected the project’s purpose.

“The project is intended for the people, so it is more appropriate that the shares are allocated to the people,” he said.

He explained that shareholders are the ones who vote at general meetings and ultimately influence the company’s decisions.

“It is therefore right that the shares are given to the public so they have a voice and a say in the decisions that will be taken for the cooperative,” Alexandrou concluded.

The proposed ownership structure provides that 60 per cent of the shares will be allocated to individual investors, while the remaining 40 per cent will be reserved for Cypriot companies.

The organisers have also said the board retains the right to increase the size of the issue if demand exceeds expectations, allowing the offering to expand from 42 million shares to as many as 100 million shares, representing the company’s authorised share capital.

The new bank will still require banking licences from both the Central Bank of Cyprus (CBC) and the European Central Bank (ECB) before it can begin operations, with organisers already preparing the necessary applications.