CEO of the Cooperative Central Bank, Nicholas Hadjiyiannis, has told the Cyprus News Agency (CNA) that “this constitutes a recognition of our efforts but means more responsibility and willingness to continue the effort to improve the Cooperative, in a highly competitive Cypriot and European banking environment with particular challenges”.

Hadjiyiannis was invited to comment on press reports concerning the new minimum capital ratio of 14.25% which will apply in the next 12 months to Cypriot banks and the Cooperative.

Through last year’s recapitalisation of €175 million, he added, the Cooperative had recorded a capital ratio of 14%, while a year later the regulatory capital exceeds 16%.

He also pointed out that there are currently three actions aiming to increase the capital, adding that “we have created for ourselves a substantial capital cushion”.

The strengthening of capital, he said, was achieved inter alia through the progress in the management of the Non-Performing Loans. He explained that loan restructuring exceeded in 2015 €1 billion while this year it is close to €1.3 bn.

It is noted that in December 2015 the European Central Bank required the Cooperative to have a minimum capital ratio of 12.25%, in contrast to other systemic Cypriot banks, for which the ECB required 11.75%. For 2017, the SSM requires minimum regulatory capital ratio of 14.25% from both the Cooperative and the other Cypriot systemic banks.

The SSM is the system of banking supervision in Europe. It comprises the ECB and the national supervisory authorities of the participating countries. Its main goals are to ensure the safety and soundness of the European banking system, increase financial integration and stability and ensure consistent supervision.

The SSM is one of the two pillars of the EU banking union, along with the Single Resolution Mechanism.

Source: InCyprus