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Financial Mirror (Cyprus) - - FRONT PAGE -

forced to ab­sorb last year.

Out­go­ing chair­man Chris­tis Has­apis said in his part­ing com­ments that will prob­a­bly be re­peated dur­ing the AGM, that he and his board were hand­ing over a strong-cap­i­tal bank.

Last year, the bank held suc­ces­sive and fiery meet­ings after the bailout pro­gramme for Cyprus in­cluded a bail-in of some EUR 4 bln by de­pos­i­tors-turned-share­hold­ers, with the for­mer own­ers of the bank di­min­ished to less than 1% of to­day’s cap­i­tal.

This re­sulted in sev­eral board shuffles and three CEOs in sev­eral months, with the in­cum­bent John Houri­can re­main­ing in of­fice for just over a year now and im­ple­ment­ing a dras­tic re­struc­tur­ing that in­cludes down­siz­ing, the sale of non-core as­sets at home and over­seas, as well as strin­gent plans to re­cover non-per­form­ing debts, es­pe­cially from ma­jor clients who have funds but refuse to pay.

Ross, whose group of in­vestors pumped a to­tal EUR 400 mln in the bank’s cap­i­tal raise, in ad­di­tion to a EUR 120 mln in­jec­tion from the Euro­pean Bank for Re­con­struc­tion and De­vel­op­ment (EBRD), hopes to achieve a ma­jor turn­around in the bank’s mid- to longterm fu­ture, telling the Fi­nan­cial Mir­ror in a re­cent in­ter­view that he in­tended to take it “from re­sus­ci­ta­tion to growth.”

“I do not strip as­sets or liq­ui­date com­pa­nies. I try to breathe life back into them,” Ross had said, bas­ing the fu­ture prospects of the bank on the re­cently dis­cov­ered off­shore en­ergy re­sources, the pri­vati­sa­tion of some 1.4 bln euros worth of state-owned com­pa­nies, over­seas ex­pan­sion and the in­tro­duc­tion of mod­ern tech­nolo­gies, such as mo­bile bank­ing.

On last month’s re­sults of the Euro­pean Cen­tral Bank stress tests, Ross said that the Bank of Cyprus “is un­der­go­ing an im­pres­sive meta­mor­pho­sis” and has re­duced its de­pen­dency on Emer­gency Liq­uid­ity As­sis­tance from the Euro­pean res­cue funds by re­pay­ing EUR 3.7 bln, has achieved a lot in delever­ag­ing and the sale of non-core op­er­a­tions, and has re­turned to prof­itabil­ity.

The three-sce­nario stress tests showed that Bank of Cyprus would have an as­set qual­ity rate, a ba­sic in­dex and ad­verse in­dex of 11.5%, 11.6% and 5.8% of common eq­uity Tier 1 (CET1) cap­i­tal, with a sur­plus of EUR 81 mln, if the present con­di­tions re­main un­til the end of 2016. Co­in­ci­den­tally, that is the same amount of prof­its an­nounced for the first half of the year, with the 9-month re­sults to be ap­proved by the new board and an­nounced next week, on Novem­ber 27.

Thurs­day’s AGM will most likely ap­prove the Ross-team that will be headed by Josef Ack­er­mann as non-ex­ec­u­tive chair­man, Wil­bur Ross and Vladimir Strzhalkovskiy as co-vice chair­men, and Arne Berggren (EBRD nom­i­nee), Maxim Gold­man, Dr. Christodou­los Pat­salides and Michalis Spanos as new board mem­bers, to­gether with CEO Houri­can and two se­nior bank ex­ec­u­tives, Mar­ios Kalo­chori­tis and Ioan­nis Zo­graphakis who are up for re-elec­tion.

Zacharias Palexas will also be can­di­date for the board, nom­i­nated by the for­mer Laiki Bank de­pos­i­tors (SYKALA), while Bank of Cyprus and ex-Laiki bond­hold­ers are ex­pected to stage a protest in front of the bank’s head­quar­ters from 8.30am.

Ac­cord­ing to a spe­cial res­o­lu­tion to be ap­proved at the AGM, the num­ber of board mem­bers shall be no less than seven and no more than 13, which means that Palexas may be elected to the new board.

The meet­ing will need to ap­prove the con­sol­i­dated fi­nan­cial state­ments for 2013, that had been pend­ing due to the takeover of the now-de­funct Laiki Bank and the loss of both banks’ Greek op­er­a­tions, as part of the bailout plan and write­down of toxic Greek gov­ern­ment bonds.

The agenda also in­cludes re­tain­ing EY (Ernst & Young) as au­di­tors, main­tain­ing last year’s re­mu­ner­a­tion level for board mem­bers (Chair­man EUR 68,000, Vice-Chair­man 51,000, non-ex­ec­u­tive mem­bers 13,000 and com­mit­tee mem­bers 2,100-6,300) and a host of spe­cial res­o­lu­tions, such as board num­bers to be re­duced from 10-to-18 to 7-to-13, five board mem­bers com­pris­ing a quorum, and other de­ci­sions to al­low for a smoother func­tion­ing of the bank.

There is also a pro­posal to re­move An­ton Smetanin, An­jel­ica An­shakova, Dmitry Chichikashvili, Eriskhan Ku­ra­zov, Ado­nis Pa­pa­con­stanti­nou and Mari­nos Gialelis from the board.

The pro­posed new mem­bers have al­ready been vet­ted by the Cen­tral Bank of Cyprus as part of “The fit­ness and pro­bity (As­sess­ment Cri­te­ria) Di­rec­tive” as well as the Guide­lines of the Euro­pean Bank­ing Au­thor­ity.

Mean­while, the 8.9 bln shares are ex­pected to be re­in­stated on the Cyprus Stock Ex­change and the Athens Stock Ex­change by the end of next month and prob­a­bly on Fri­day, De­cem­ber 19, ac­cord­ing to of­fi­cial sources.

“What­ever the case, the prospec­tus of new shares will prob­a­bly be ap­proved by the Cyprus Se­cu­ri­ties and Ex­change Com­mis­sion and the stock relisted on the CSE oin or­der to start trad­ing again be­fore the end of the year,” the source said.

The stock’s re­turn will give a new im­pe­tus to the near-dor­mant CSE, with an ini­tial list­ing price of 24c, the value at which shares were sold in pri­vate place­ment to in­sti­tu­tional in­vestors. If the stock price holds, then the bank will close the year with a mar­ket cap­i­tal­i­sa­tion of EUR 2.14 bln.

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