The decision came in response to an exercise carried out by the Singe Supervisory Mechanism of the ECB. However as a result of the increase in the coverage ratio, the Co-op Core Tier One ratio, an index of a credit institution capital adequacy, declined from 13.5% in the end of June to 12.01% prompting the state, which is the major shareholder of the Co-op, to boost its capital by €100 – €200 million.

“The main shareholder intends to strengthen the Co-op capital base, creating a further buffer over and above the supervisory requirements and in this direction a capital plan will be submitted,” a press release issued by the Cooperative Central Bank (CCB) says.

“Today we are making a decisive step. We shield our balance sheet that will allow us to efficiently build on the verygood results in the pace of restructuring. At the same time we absorb significant on-off provisions in our balance sheet, securing our compliance with the new more strict supervisory requirements,” the President of the CCB said.

The cooperative credit Institution was nationalised in 2013 as the state injected €1.5 billion to increase its capital. The money came from a €10 billion financial assistance package the government concluded with the EU and the IMF.

Source: InCyprus