The Cooperative Bank of the Peloponnese is heading toward a split between a “good” and “bad bank” as it is the only cooperative lender to have failed to cover its capital requirements. Its healthy side will be passed on to National Bank of Greece.
The country’s central bank decided yesterday to revoke the bank’s operating license as the deadline for the share capital increase of 17 million euros had passed without the bank having managed to collect the funds needed. Sources say it did not get anywhere close to that amount, meaning there was no choice but to revoke its license.
The bank’s deposits, amounting to 120 million euros, are fully safeguarded as they will be passed on to National Bank, which is also taking over the 14 branches the lender had across the Peloponnese. Sources say an effort is under way to safeguard the jobs of the bank’s 66 employees too.
National is taking over only the deposits that are guaranteed from the first euro, while the loans will go into the bad bank to be sold in the hope of collecting some of the outstanding payments to go toward the Deposit Guarantee Fund.
The other three cooperative banks that had to cover capital requirements, the Pancretan Cooperative, the Hania Cooperative and the Epirus Cooperative, have successfully completed the process exclusively through private funds.