EU regulators okay Cypriot state aid for failed bank

Hellenic Bank Pcl

19/06/2018 10:49

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  HBNK.CY .
    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;)
 ((foo.yunchee@thomsonreuters.com; +32 2 287 6844; Reuters
Messaging: foo.yunchee.thomsonreuters.com@reuters.net))