BRUSSELS, June 19 (Reuters) - EU competition regulators approved on Tuesday Cyprus’ plan to grant 3.5 billion euros ($4 billion) to failed Cyprus Cooperative Bank (CCB) for its liquidation which will include the sale of some assets and deposits to Hellenic Bank.
Cyprus tried to restructure CCB, the island’s second largest credit institution, in 2014 but failed after the bank did not recover sufficient money from its portfolio of non-performing loans due to corporate governance issues and legal obstacles.
The European Commission said the state aid measures include a counter-guarantee to the guarantees provided by CCB to Hellenic Bank related to the sale, including an asset protection scheme.
The Cypriot scheme “will remove about 6 billion euros of non-performing loans from the Cypriot banking sector and thereby contribute to its recovery,” the EU state aid enforcer said.
$1 = 0.8665 euros Reporting by Foo Yun Chee and Phil Blenkinsop;