The island`s CCIs have been nationalized by the state, after the government injected €1.5 billion to recapitalize the sector on the basis of a due diligence review carried out by US asset management company Pimco. The capital came from the financial assistance Cyprus agreed with the European Commission, the European Central Bank and the IMF, collectively called the Troika. As part of the bailout conditions, the Coops should implement a restructuring plan that will reduce the CCIs total number to 18 from 193 and should rationalize its operating expenses.

Speaking to CNA, Nicolas Hadjiyiannis, President of the CCB Committee said the plan aims at 10% of the Coops 3.000 employees, specifically targeting employees over 45. The CCB aims at saving €14 million from 2015 onwards, he said. Furthermore, the CCB Board appointed Efthymios Pantazis, former CCB senior director, head of the non-performing loans management division, a division considered crucial, as NPLs exceed 44% of the Coops loan book of €13.42 billion. The Board appointed Paola Toumazi Chief Restructuring Officer. The Board also appointed Andreas Trokkos, a former Finance Ministry Director, head of the Unit to monitor the implementation of the restructuring plan.

The approval of the sector's restructuring plan by the European Commission's DG Competition is a precondition for granting €1.5 billion, which has been deposited in a Central Bank of Cyprus account since the disbursement of the second tranche of the Cyprus programme.

Source: Financial Mirror