Inspection leads to Attica shakeup

Serious findings during an on-thespot inspection conducted jointly by the Bank of Greece and the Single Supervisory Mechanism (SSM) of the European Central Bank led to a radical – the second within a few weeks – shakeup of the governing board of Attica Bank this week, with the resignation of chief executive Alexandros Antonopoulos and six other members.

Bank sector sources say that, in spite of the strict guidelines issued by the BoG – which has had the lender under close scrutiny for some time now – Attica Bank recently proceeded with issuing of loans without adhering to basic banking principles.

The regulatory authorities responded immediately with a new inspection, demanding the replacement of the management and the rapid compliance of the bank with credit sector rules.

In response to a question by the Capital Market Commission on Wednesday, Attica said it restructured its board in cooperation with the BoG, adding that the new administration will immediately comply with the recommendations of the inspection report. The fact that the bank’s response also refers to a new European law on the streamlining of credit institutions, including a bail-in process, shows that Attica’s management and stakeholders were threatened with some very tough options.

The bank added that last month it received a draft of the inspection report by the SSM and the BoG, which contained findings on the operation of internal governance, the business model, the share capital increase, the procedures referring to credit risk and the information technology systems used by the lender.

The final version of the inspection report will be delivered to the bank in September.

Its new management, led by executive president Anna Pouskouri, will immediately proceed to a radical restructuring and the strict implementation of banking rules at all levels of operation. It will also cover the 70 million euros not covered by the share capital increase in the context of last year’s recapitalization of the sector.