He was replying to questions about criticism by opposition parties for the way the government handled the sale of state-owned Cyprus Cooperative Bank (CCB) to Hellenic Bank.

The state was forced to buy the CCB in 2012 by injecting €1.8 billion and further intervened when in 2013 the CCB had €300 million negative working capital. “The CCB’s losses were large,” Prodromou said.

However, he added, the two banks have now joined in a formation that is strengthened by a €10 bn injection in deposits which are secured, contrary to rumours surrounding the CCB in the last weeks that deposits are unsafe.

The state has already taken on around €6 billion worth of non-performing loans, after it deposited €2.5 billion in CCB last month as the bank was facing a possible run on deposits following rumours about its viability.

Prodromou said the state will pass on all non-performing loans it owns to a new body to be set up to deal with the non-performing loans owned by all banks.

He also said that the state will make an additional deposit of €1 billion to the CCB in exchange for performing loans worth €500 million and all of the Bank`s immovable property, worth €600 million.

After that, and together with a review of the legislation “we will be able to provide a solution to Non-Performing Loans, similar to the proposal of all political parties,” he added.

Source: Cyprus Mail