Syprodat backs new cooperative bank but urges transparency

The Cyprus Borrowers Protection Association (Syprodat) has welcomed the launch of the public share offering for the proposed Pancyprian Cooperative Bank, while stressing that the project’s success will ultimately depend on transparency, sound corporate governance and restoring public trust.

The association’s intervention comes after the Cyprus Securities and Exchange Commission (CySEC) approved the prospectus for the new bank’s public offering, allowing organisers to begin raising €42 million in capital as part of efforts to establish the new credit institution.

Syprodat said the initiative had now entered its most critical phase, explaining that successfully completing the share offering is a prerequisite for securing the necessary licences from the Central Bank of Cyprus (CBC) and the European Central Bank (ECB) before the bank can begin operating.

The public offering will run from July 22, 2026 to November 17, 2026, with up to 42 million new shares, each carrying a nominal value of €1.00, available to investors through the Athlos Capital platform.

The association said the proposed bank aims to support the real economy, small and medium-sized enterprises, farmers, professionals and young families, while adding that the arrival of another banking institution could strengthen competition and provide greater choice for both depositors and borrowers.

However, Syprodat cautioned that the experiences of the 2013 collapse of Laiki Bank and the 2018 dissolution of the Cyprus Cooperative Bank continue to weigh heavily on public confidence in the banking sector.

For that reason, it argued that complete transparency regarding the bank’s shareholder structure, governance arrangements and internal control mechanisms would be essential if the new institution is to regain the trust of citizens.

The association said the project’s success would not be determined solely by capital adequacy or supervisory approvals.

Instead, it argued that responsible lending policies, compliance with the European supervisory framework and sound corporate governance would ultimately determine whether the initiative succeeds.

Syprodat added that it supports every initiative that strengthens competition within Cyprus’ banking sector, provided it is built on transparency, accountability and effective supervision.

“Citizens’ trust will only be earned through consistency and the actions of the new bank,” the association said.

The comments follow similar support expressed by economists and the organisers of the initiative, who have argued that a new cooperative bank could provide greater competition in a banking market dominated by a small number of lenders.

Last week, Cyprus association of economics teachers president Argyris Alexandrou said the return of a cooperative bank could benefit both consumers and the wider economy by increasing competitive pressure on commercial banks.

“The effort being made is certainly for the common good and we welcome it,” Alexandrou said at the time.

He also argued that the cooperative’s traditional social mission would distinguish it from commercial lenders.

“The existence of another bank, such as the Cooperative, will provide greater incentives for more businesses to compete, ultimately leading to better interest rates for citizens,” Alexandrou said.

The proposal envisages 60 per cent of the shares being allocated to individual investors, with the remaining 40 per cent reserved for Cypriot companies.

The organisers have also retained the option of increasing the offering if demand exceeds expectations, allowing the issue to expand from 42 million shares to as many as 100 million shares, representing the company’s authorised share capital.

Speaking after the prospectus received regulatory approval earlier this month, Panikos Hambas, president of the committee of the Pancyprian Cooperative Society for Participation and Promotion of Cooperativism Ltd, said the initiative sought to revive the cooperative model within today’s banking framework.

“The entire undertaking was and remains difficult, but not impossible,” Hambas said.

He also pledged that the new institution would be built on transparency, democratic procedures and prudent lending policies designed to avoid the accumulation of non-performing loans.

The proposed bank will still require licences from both the CBC and the ECB before it can commence operations.