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Financial Mirror (Cyprus) - - FRONT PAGE -

The long-time chief ex­ec­u­tive of the Hel­lenic Bank, whose con­ser­va­tive poli­cies may have saved the bank from a sim­i­lar demise of the other lenders in Cyprus, an­nounced his res­ig­na­tion on Mon­day in what an­a­lysts be­lieve is an ef­fort by new share­hold­ers to have a greater say.

Makis Ker­avnos, CEO since Septem­ber 2005, hav­ing pre­vi­ously served as Min­is­ter of Labour and Min­is­ter of Fi­nance after the ac­ces­sion of Cyprus to the EU in May 2004, has on sev­eral oc­ca­sions crit­i­cised the poor man­age­ment of other banks that led to their be­ing taken over by for­eign in­vestors.

In a heart­felt mes­sage to staff and share­hold­ers, Ker­avnos said that Hel­lenic Bank over­came the eco­nomic cri­sis with the least pos­si­ble im­pact.

“No de­pos­i­tor lost even a cent from the write­down of de­posits [as im­posed on other banks] and the Hel­lenic Bank main­tained strong name, one that in­stills trust, which is why we man­aged to re­cap­i­talise with pri­vate in­vestors’ funds,” he said. “My decision is fi­nal,” Ker­avnos said, adding that “due to me decision I can no longer be present. The (bank’s) new man­age­ment must ac­tively and im­me­di­ately take charge and par­tic­i­pate ac­tively from the start.”

He ex­plained that his with­drawal was mu­tu­ally agreed and on am­i­ca­ble terms. Ker­avnos added that due to the on­go­ing de­vel­op­ments and chal­lenges in the econ­omy – stress tests, ECB’s su­per­vi­sory role, new reg­u­la­tions – the bank is en­ter­ing a new phase of re­vis­ing its medium to long term strate­gic plans.

The bank said in a state­ment that the board has re­cruited the ad­vi­sory firm Hei­drick & Strug­gles to find suit­able can­di­ates for the job, sug­gest­ing that the new CEO will not nec­es­sar­ily be a lo­cal can­di­date.

Arch­bishop Chrysos­to­mos II, head of the Church of Cyprus that has seen its stakes in both Hel­lenic and big­ger lender Bank of Cyprus dwin­dle due to their res­cue by lo­cal and for­eign funds, on Sun­day con­firmed news of Ker­avnos’ res­ig­na­tion, ex­actly a year prior to the ex­piry of his cur­rent con­tract.

The church leader said that with the two in­vestors now con­trol­ling about 45% of the bank – Third Point of New York and Wargam­ing.net, the on­line vir­tual bat­tle plat­form con­trolled by Be­larus in­vestors – have the fi­nal say, much to his pre­vi­ous ob­jec­tions to the ar­rival of such in­vestors who dis­placed the Church’s for­mer con­trol of 25% in the bank.

But this was con­sid­ered a ne­ces­sity as lo­cal in­vestors were un­able to prop up the bank’s cap­i­tal due to the eco­nomic cri­sis that fol­lowed last year’s bailout by the Troika of in­ter­na­tional lenders. Asked if Ker­avnos was be­ing forced to re­sign, the Arch­bishop said “they (Third Point and Wargam­ing) have the majority and they con­trol the bank.”

In May, Hel­lenic Bank share­hold­ers had ap­proved the ap­point­ment of a new board, in­clud­ing the first fe­male chair­man of 40-year-old bank, Irena Ge­or­giadou, for­merly Com­mis­sioner re­spon­si­ble for Pub­lic Sec­tor Re­form.

On Mon­day, Ge­or­giadou told CyBC ra­dio that Makis Ker­avnos’ res­ig­na­tion was noth­ing new and that it had been of­fered in May.

Hel­lenic Bank an­nounced that after-tax losses dou­bled year-on-year to EUR 95.5 mln, due to a de­te­ri­o­ra­tion of the bank’s loan port­fo­lio and fur­ther in­crease in pro­vi­sions.

The bank’s new chair­woman, Irena Ge­or­giadou, in her first re­port to share­hold­ers, warned that the Cyprus econ­omy and so­ci­ety con­tin­ued to face “an un­prece­dented cri­sis”, but that the ob­sta­cles faced by the cri­sis will be over­come bring­ing bet­ter days for all.

Ge­or­giadou said that dur­ing the sec­ond quar­ter, the bank strength­ened its bal­ance sheet fur­ther with com­fort­able liq­uid­ity and im­proved cov­er­age of non­per­form­ing loans (NPLs). De­posits in­creased by 6% since the end of 2013, and the net loans to de­posits ra­tio im­proved even fur­ther to a best in class ra­tio of 57%.

“In terms of cap­i­tal, we com­ply with the reg­u­la­tory re­quire­ments. In an­tic­i­pa­tion of the re­sults of the Com­pre­hen­sive As­sess­ment and the en­su­ing Stress Tests by the ECB, we are con­sid­er­ing our cap­i­tal plans and in this re­spect we have en­gaged the firm Roth­schild who

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