* H1 hit by 114 mln losses in Greece *
Bank of Cyprus chairman Theodoros Aristodemou announced on Wednesday he had resigned for health reasons. He is expected to be replaced by veteran banker Evdokimos Xenophontos.
This follows the departure in summer of CEO Andreas Eliades, as losses in Greece have compounded the bank’s troubles, including a takeover in Russian that is now being criticised.
Aristodemou, a property developer, said in a letter to the board that "serious health issues" had forced a two-month absence abroad, and it was unclear when he could fully resume his duties.
News reports suggested that Aristodemou, chairman since 2008, had informed the central bank of his intention during a meeting with regulators on Tuesday.
Bank of Cyprus sought 500 mln euros in state assistance after its regulatory capital was depleted by a debt restructuring for Greece earlier this year.
Cyprus itself sought a bailout from European Union partners in June to cover both its fiscal requirements and the capital needs of Bank of Cyprus and also Cyprus Popular Bank, the second largest lender. Both were heavily exposed to Greek debt.
The bank is expected to announce 114 mln euros in losses for the first half on Thursday, pushing it closer to a deal, probably with Alpha Bank, to swap its loan book in Greece with Alpha’s loans in Cyprus.
A newspaper report last week said Alpha Bank's impaired loans in Cyprus were smaller than the Bank of Cyprus's non-performing credit in Greece and that the difference would be made up in some form including shares.
However, the bank needs to untangle itself from reports of inadequacies in the due diligence report conducted for the takeover of Uniastrum Bank in Russia, while the pressure remains for the removal of high-ranking officials, supposedly for rejecting favourable loan deals to pro-administration corporations and associations.
Following the departure of former CEO Eliades, some reports have been critical of his compensation package, while others have suggested he took out large loans at favourable rates.
In any case, veteran banker and board member Evdokimos Xenophontos is widely tipped to step in as chairman of the bank, as he also enjoys the support of major shareholder Dmitry Rybolovlev.
Get all the latest news and videos in your inbox. Register FREE