Bank of Cyprus said on Thursday it had appointed Yiannis Kypri as chief executive following Tuesday’s resignation of Andreas Eliades, the group CEO for the past eight years.
Kypri, a chartered accountant and graduate of the London School of Economics, held the post of deputy CEO for the past two years having joined the bank in 1980.
Eliades quit the bank earlier this week, citing a lack of cohesion in dealing with challenges in the banking sector.
The bank posted significant losses on Greece's debt writedown and has sought 500 mln euros aid from the government to cover a regulatory shortfall in its core Tier 1 capital.
The bank’s board also decided to keep Yiannis Pehlivanidis as First Deputy CEO.
The island's two largest lenders, Bank of Cyprus and the Popular Bank, booked a combined 4 billion euros in losses in the value of their Greek sovereign debt holdings after European leaders agreed to impose a haircut on private investors of Greek government debt to make Athens's debt pile more manageable.
Imposing the haircut on holders of Greek sovereign debt essentially pushed Cyprus, shut out of international capital markets for a year and in recession, to seek international aid.
The state has pledged a 1.79 bln euro capital injection for Popular taking an 84% stake in the bank.
Eliades is seen as the first scapegoat in a string of resignations that the communist-led government has demanded in an effort to divert attention away from its poor handling of the economy and the lack of austerity measures that should have brought public finances in order.
Instead, the current administration seems to have propped up the amount needed for a Cyprus rescue to 10 bln euros, only a quarter of which is for the banks, with the balance probably headed to pay public sector wages and other government development projects.
It has now targeted former Finance Minister Michael Sarris who joined the Popular Bank as a caretaker chairman late last year to get the bank out of its current difficulties. He negotiated a plan with the incumbent and previous finance ministers that eventually saw the bank’s part-nationalisation.
Reports suggest that Central Bank Governor Panicos Demetriades demanded Sarris’ resignation, saying this was President Christofias’ wish.
Sarris has said that he will stay on to finish the job he started – to return the island’s second largest lender to a path of recovery. Instead, Sarris is expected to propose to the next board meeting that Chris Pavlou be appointed deputy chairman.
Get all the latest news and videos in your inbox. Register FREE