Cooperative bank chief quits, the search is on for new CEO ‘by mid-July’

Marios Clerides, a soft-spoken and well-respected economist, resigned as chief executive of the Cooperative Central Bank, less than half-way through his five-year contract. It has been reported that he resigned for “personal reasons”.

Bank officials said that the search for his successor is already underway, with a replacement recruited probably by mid-July, just before the arrival of the next team of inspectors from the Troika of international lenders.

However, Clerides’ surprise resignation caused a flurry of speculation, ranging from his appointment as the next Central Bank Governor, should incumbent Chrystalla Georghadji quit or be forced out, while other suggest that it follows the same pattern as the earlier-than-expected resignation of Bank of Cyprus CEO John Hourican, who leaves Cyprus at the end of August.

Both banks are still dogged with high rates of nonperforming loans, despite the passage through parliament of the long-delayed framework for foreclosures and insolvencies. Differences with their respective boards over how best to handle the problem have also been cited as reasons for the departures of both Clerides and Hourican.

Clerides, 62, who joined the Coop from Hellenic Bank in December 2013, had a contract to the end of 2018, by which time the state-rescued cooperative bank would have been on a path to recovery and growth, and possibly return to public ownership.

The bank had been bailed out by the government to the tune of 1.5 bln euros, which helped it restructure, downsize and merged all loosely-regulated Coop credit societies into one entity, subsequently offloading non-core assets and selling off unproductive divisions and properties.

On Monday, the Cooperative Central Bank issued a statement confirming Clerides resignation, which has immediate effect.

“We would like to thank (him) for his valuable services to the movement at a critical juncture for the Cooperative and the economy of Cyprus, contributing through the ethos that describes him the successful path of growth, recapitalisation and reorganisation of the Cooperative Credit Sector in the past year and a half,” the CCB said in a statement.

It added that the supervisory committee is proceeding with all necessary steps to ensure a smooth succession to Clerides.

“We continue on the path that we have charted, with the aim to realise our plans for the completion of the effort to create a modern European Cooperative that will continue, through its 18 credit societies (subsidiaries) to provide beneficial services to its members and customers.”

Marios Clerides, a graduate of the London School of Economics who has also served as Chairman of the Securities and Exchange Commission (CySEC), has taught at the University of Cyprus where he served on the council for the Centre for Economic Research and was Chairman of the Cyprus Banking Association. In April 2013, he was appointed to the National Council for the Economy, headed by economics Nobel laureate Dr Christoforos Pissarides that advises the President of Cyprus on economy issues and future policy.

On Tuesday, the Cyprus News Agency quoted Yiannis Stavrinides, in charge of strategy and communication at the Cooperative Central Bank, as confirming that Marios Clerides’ replacement will be selected by the bank’s supervisory committee early next month.

Stavrinides said that vital issues that regard the wider banking sector, as well as the strategic plans of the Cooperative, will be on the agenda of talks with the Troika inspectors.

He added that the pre-selection process should be concluded by the end of next week, without elaborating if specific names had been mentioned, while the recruitment of a non-Cypriot CEO is also possible.