Hadjiyiannis said in an interview with the Cyprus News Agency that the ultimate aim is to enhance confidence in the Cooperative Credit Institutions (CCI), the economy and institutions generally. The Coops account for about 40% of the island's banking system. "Our goal is to create an organisational infrastructure and a mode of operation that will ensure the successful implementation of the Restructuring Plan, which provides for the restoration of profitability of the CCI in a period of time," he noted.

He also pointed out that the recently revised Memorandum clarifies that no contribution will be made by the depositors for the CCIs’ recapitalisation needs following a €1.5 bln capital injection to the island’s Cooperative banks to cover their capital shortfall. As a result, the state now controls 99% of the Coop banks’ shares.

Under the bailout terms, the 193 CCIs operating are being merged into 18 Cooperative Savings Banks, while the Independent Commission for the Future of Banking in Cyprus recently suggested that the remaining Coop banks also merge into one mega-entity, whose shares could be listed on the Cyprus Stock Exchnage.

Source: Financial Mirror