New era in Cypriot banking landscape

A banking era came to an end with the ironing out of the last details of a deal under which Hellenic Bank, Cyprus’s third largest lender, will acquire the operations of the Cyprus Cooperative Bank (CCB), banking sources said on Thursday.

Cypriot President Nicos Anastasiades called to his office the leaders of the four biggest trade unions to brief them on the details of decisions aimed at safeguarding the interests of CCB’s 2,500 employees.

His spokesman said that about 900 of them, mostly older employees, will be offered “generous” terms for voluntary retirement, while the rest will either stay with the CCB or be absorbed by Hellenic Bank.

Trade unionists said after the meeting that the details for securing the rights of employees are part of the deal. They said they were satisfied by what they heard, but further negotiations will be needed between trade unions and the bankers.

The deal signals the end of a banking era that goes back to 1909, when small-scale farmers and businessmen set up the first Cooperative Credit Society.

They pooled together their savings so as to get rid of loan mongers by giving loans to the farmers though their credit society.

The practice caught up and within about 50 years there were 350 cooperative credit societies operating at village level.

The owners were their depositors and loan owners, who had to buy some shares before getting a loan.

A Cooperative Central Bank was set up in 1925 to manage the funds of 24 existing local societies.

The Cooperative Movement, as it became known, flourished between 1960 and 1980, when small village branches in 350 communities started operating on the lines of small banks and additionally operated village cooperative stores.