Anger as Hellenic Bank eyes more branch closures

Hellenic Bank has announced it will close down more branches by the end of 2020, despite criticism it is abandoning rural communities that need them most.

Talking to MPs of the House’s Audit Committee the general manager of the Group George Karagiorgis said that the bank intends to close more branches following the closure of 43 Co-op branches acquired during last year’s the takeover.

The move follows the closure of branches in rural and mountain villages with locals taking to the streets on a number of occasions to protest.

Earlier in the summer, residents from villages in Limassol’s wine-growing region protested against Hellenic Bank’s decision to shut down a branch in Pachna, the last remaining in the area.

A string of 20 villages, known as the ‘Wine Villages’ in the west of Limassol have been left without a single bank to serve them.

Present at the meeting were a number of rural communities affected by the closure of Co-operative branches such as Dromolaxia, Meneou, Acheritou, Pelendri and Kambou.

Pelendri - a village in the Troodos mountains community leader said that residents of the area begged Hellenic officials to leave at least an ATM behind so they could conduct their business without having to travel to long distances.

Karagiorgis made it clear Hellenic will not reopen any branch it has shut down nor will it increase the number of mobile banks on wheels but may increase the number of routes.

Currently, Hellenic has two buses which serve as banks on wheels and visit a string of rural villages.

Finance Minister Harris Georgiades said a total of 120 consolidated branches of the Hellenic Bank have been operating since Monday, but their number will have to decrease in order to comply with banking practices in the rest of Europe.

He recalled that “ten years ago there were 923 branches, while today they number 386. Within 10 years some 550 bank branches were closed”.

He argued that “with 386 branches, Cyprus is fourth with the most branches proportionate to population size”.

Regarding the number of bank employees, Georgiades argued that Cyprus comes third on the list as there is one bank employee for every 97 citizens.

Hellenic posted profits of EUR 319.3 mln in 2018 against losses of 45.7 mln in 2017 as a result of the negative goodwill from the acquisition of the Cyprus Co-op Bank’s healthy portfolio.

The negative goodwill reflected the difference between the EUR 74.2 million it paid in cash and the net fair value of the assets acquired and liabilities assumed.

A total of 486 bank branches have closed in Cyprus over the past six years following the demise of two of its largest lenders, Laiki Bank and the Co-op in 2013 and 2018 respectively.

As a result, bank customers have seen service points drastically reduced by more than half.