The next Bank of Cyprus CEO should be selected by September and this may seem like a long time away but the relevant process by the Board’s Appointments Committee is set to run faster than expected.
And this because NewDay, a leading specialist financial services provider in the UK, has announced the appointment of John Hourican as its new CEO who will take up his role in early September. Most probably, he will also want to take a break in between the two jobs.
The message the Bank sends out is that most probably there will be an end to the selection process long before September. In fact, shortly after the General Assembly of May 14 which is the last to be chaired by Josef Ackermann. And the one marking the beginning of the Bank’s Takis Arapoglou era, since it has already been made public that he is taking over the chairmanship.
Thus, the new state of play of the Bank’s Group includes foreign shareholders, a Greek national at the board’s helm and Cypriots as part of the management team. The geographic and professional identity of the Group’s CEO is the only question still pending. Insiders say this should be a person with significant knowledge of retail banking and of the Cypriot reality as well, since the Bank is now focusing on development rather than rectification.
The completion of Helix project with the sale of €2.7 billion of red loans to Apollo Fund marks a very important step towards the bank’s disengagement from troubled loans. But the signs are clear that the sale of a second non-performing loan package is a must before supervisors can describe the bank’s indicators as being at permissible levels.
When announcing the 2018 results, the Bank indicated a strong capital level but it remains to be seen whether this will be enough to absorb the capital shocks from the sale of an apparently particularly problematic loan portfolio.
At the same time, the new CEO – along with the management – should finally touch upon the issue of staff costs since the pressure on the loan-to-deposit ratio will also affect the bank’s revenues, pushing up its staff costs ratio.