Cypriot Lawmakers OK Hellenic Bank Takeover of Cooperative Bank

FILE - An aircraft takes off from Larnaca airport past the control tower, Saturday, Oct. 7, 2017, at the southern coastal city of Larnaca, Cyprus. (AP Photo/Petros Karadjias)

NICOSIA – The Cypriot Parliament approved a bill would give state guarantees to Hellenic Bank in a takeover of Cyprus Cooperative Bank (CCB).

The legislation allows the government to offer financial incentives for organizations when it comes to matters deemed in the public interest, in this case giving state protection to the Hellenic Bank’s risk.

Hellenic Bank will acquire the healthy portfolio CCB whose holdings are saddled with 60 percent bad loans at a cost of some 7 billion euros ($8.24 billion) and let the commercial bank off the hook for those.

Cyprus’ banking system and economy were nearly brought down in 2013 over bad loans, mostly to Greek businesses who weren’t paying, and in big holdings in Greek bonds devalued 74 percent, stiffing investors.

Cypriot President Nicos Anastasiades, who reneged on promises not to let banks confiscate a sizeable portion of accounts over 100,000 euros ($117,660) to save themselves, also broke his word he would hold bank managers accountable but let them get away.