“It must be understood that the Co-op bank is not being sold. The state is not selling any of the shares that it holds in the Co-operative Bank.”

The Co-op, Georgiades added, needs to draw capital, “therefore, what has been announced is not the sale of the Co-op, but rather a call for investment in the Co-op.”

Responding to criticism from political parties, he noted that this action will secure the financial stability of the bank, so that no depositor would be concerned, while at the same time taking a step in the right direction of dealing with non-performing loans.

Asked if the investors choose not to buy the bank’s bad portfolio, Georgiades said, “that would equal the creation of a management institution, which is something that has been recommended by the government and political powers, has a cost, but has a benefit.”

Earlier in the day a senior bank official said plans to privatise the state-owned Cyprus Cooperative Bank (formerly the Cooperative Central Bank) would benefit depositors and performing borrowers alike.

On Monday the co-op bank opened a virtual data room to be used by potential investors to securely exchange data and analyses, as the lender seeks to reduce the state’s share.

The process launched by the bank has two parts, one offering the choice of acquiring the bank as a licensed entity, or part or all of its assets and liabilities.

Other Cypriot commercialbanks can take part in the second option.

The process will close on March 29. It is being handled by Citigroup Global Markets Ltd.

After that, potential investors will be given time to submit binding offers.

The co-op bank was recapitalised with €1.67bn in taxpayer money in 2014 and 2015, but it is struggling with some €6.4bn in non-performing loans (NPLs), accounting for more than half of its loan portfolio.

In light of the developments surrounding the ownership of Co-Op Bank, unions Sek, Peo and Pasydy on Tuesday announced that the rights of workers at the bank would need to be secured and continue to be in place.

The unions added that staff positions would also need to be secured, and that “in no way would any case regarding forced retirement or firing be acceptable.”

In their message, the unions also requested that they be informed of any development at the Co-Ops by the governing body.

Speaking on state broadcaster CyBC, Yiannis Stavrinides, head of the CCB’s Strategy and Communications Service, said two options are now on the table.

The first is an increase in the bank’s share capital, allowing a private investor to participate as a shareholder. Here, the lender’s shares would not be sold, but rather increased, because the CCB itself does not have the authority to divest state assets.

In this case the investor would control the CCB’s entire balance sheet, including normal banking operations as well as the portfolio of bad loans (NPLs).

The other alternative is for interested investors to acquire the CCB’s banking operations alone – the entire balance sheet, the branches and the personnel – without the delinquent loans.

The investor would pay the state – the current owner of the CCB – the asking price. Subsequently, in this scenario, the state would be left only with the NPL portfolio – the “bad part” of the bank.

Later, the investor would be able to absorb the CCB or merge it with another bank under their control. It would be up to them to retain the CCB brand or not, Stavrinides said.

The bank official argued that, assuming interested parties come forward, it would be a positive development both for CCB customers and for borrowers who are meeting their obligations.

“Obviously a depositor prefers it if they hold their savings in a bank that has no NPLs,” he said.

Stavrinides recalled that the state reducing its share in the CCB had been a precondition of bailing out the bank.

Media reports meanwhile said a number of parties have expressed an interest in the CCB. These included Bank of Cyprus, Hellenic Bank, Eurobank, as well as investment funds from Canada and China.

Banking sources were quoted as saying that the entire process for a deal selling all or part of the CCB should be completed by April 30 – the deadline by which the lender must disclose its financial results for the year 2017.

Akel supporters held a demonstration in Limassol regarding the developments at the bank early Tuesday evening. Approximately 200 people gathered outside the branch on Limassol’s Gladstonos Street at 6pm. During his speech at the demonstration, MP Georgios Georgiou expressed his concern for the developments and called on the authorities to take the appropriate measures to protect the people.

Source: Cyprus Mail