Heads roll in co-op sector

A NUMBER of co-op officials have been dismissed mainly because they had granted loans irresponsibly, it emerged on Friday, as the new Central Co-operative Bank (CCB) top brass warned it will not tolerate practices that prevailed in the past.

Speaking to the Cyprus News Agency, CCB board chairman Nicolas Hadjiyiannis confirmed the dismissals but avoided divulging any details.

“We’ve had some cases where administrative decisions were taken, including dismissals,” he said. “They were cases that were known for some time. Our line is clear, zero tolerance.”

The CCB chairman stressed however that the process did not constitute a purge.

“We are moving forward with a clear strategy of transparency and effectiveness,” he said earlier Friday.

Media reports said the cases concerned between two and five general secretaries who had been handing out loans liberally.

Hadjiyiannis said experts were also looking into whether legal measures could be taken against them.

The co-operative movement is currently undergoing what is perhaps the biggest overhaul in its history, as it comes under the ownership of the state.

As part of the island’s €10 billion international bailout, co-ops will receive €1.5 billion in taxpayers’ money.

The sector will also be reduced in size through mergers and will come under the supervision of the Central Bank.

Hadjiyiannis said the mergers will be concluded on March 22.

As part of the sector’s restructure, the island’s 93 co-operatives will be merged into 18 with some 25 per cent of the 410 branches expected to go.

Like commercial banks, co-ops also have to deal with the effects of the recession on their loan portfolio.

Around 30 per cent of their loans, or €4bln are classified as non performing (NPL)

The CCB has set up a unit to manage NPLs, currently in the process of being staffed.

The plan is for the unit to handle NPLs of over €200,000, while the smaller loans will be handled at branch level.

The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.