Borrowers group welcomes increased competition in Cyprus banking sector
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…
Syprodat backs new cooperative bank but urges transparencyThe Cyprus Borrowers Protection Association (Syprodat) has welcomed thelaunch of the public share offeringfor the proposed Pancyprian Cooperative Bank, while stressing that the project’s success will ultimately depend ontransparency, sound corporate governanceand restoring public trust. The association’s intervention comes after the Cyprus Securities and Exchange Commission (CySEC)approved the prospectusfor the new bank’s public offering, allowing organisers to beginraising €42 million in capitalas part of efforts to establish the new credit institution. Syprodat said the initiative had now entered itsmost critical phase, explaining that successfully completing the share offering is aprerequisite for securing the necessary licencesfrom 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, withup 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 tosupport the real economy, small and medium-sized enterprises, farmers, professionals and young families, while adding that the arrival of another banking institution couldstrengthen competitionand 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 toweigh heavily on public confidencein the banking sector. For that reason, it argued thatcomplete transparencyregarding the bank’s shareholder structure, governance arrangements and internal control mechanisms would be essential if the new institution is toregain the trust of citizens. The association said the project’s success would not be determined solely bycapital adequacy or supervisory approvals. Instead, it argued thatresponsible 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 thatstrengthens competitionwithin Cyprus’ banking sector, provided it is built on transparency, accountability and effective supervision. “Citizens’ trust will only be earned throughconsistency 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 couldprovide greater competitionin 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 couldbenefit both consumers and the wider economyby increasing competitive pressure on commercial banks. “The effort being made is certainly for thecommon goodand we welcome it,” Alexandrou said at the time. He also argued that thecooperative’s traditional social missionwould 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 tobetter interest rates for citizens,” Alexandrou said. The proposal envisages60 per cent of the sharesbeing allocated to individual investors, with the remaining40 per cent reserved for Cypriot companies. The organisers have also retained the option ofincreasing the offeringif demand exceeds expectations, allowing the issue to expand from 42 million shares to as many as 100 million shares, representing the company’sauthorised 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 torevive the cooperative modelwithin today’s banking framework. “The entire undertaking was and remains difficult, butnot impossible,” Hambas said. He also pledged that the new institution would be built ontransparency, democratic procedures and prudent lending policiesdesigned to avoid the accumulation of non-performing loans. The proposed bank will stillrequire licences from both the CBC and the ECBbefore it can commence operations.