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CEO ousted as administrator called in to run Bank of Cyprus

27 March, 2013

Yiannis Kypri, the Chief Executive Officer of the Bank of Cyprus, was dismissed by the Central Bank on Wednesday with an administrator taking over the restructuring of the island’s largest lender.

The bank will absorb the “good bank” operations of troubled Popular Laiki burdened with 9 bln euros in debt after the recent Cyprus bailout plan approved by the Eurogroup of euro zone finance ministers before dawn on Monday.

A political decision by EU leaders in 2011, including then-President Demetris Christofias, resulted in a 70% haircut of all Greek government bonds, which Cypriot banks held in their portfolio and subsequently succumbed to these losses.

The central bank was handed extraordinary powers by parliament last Friday that voted through a package of regulations to help with the splitting up and winding down of Laiki, imposing a levy-for-equity on savers with deposits of more than 100,000 euros and fixing currency controls to contain a bank run when these open on Thursday after being shut for nearly two weeks.

The Central Bank of Cyprus appointed Dinos Christofides, an accountant with 32 years of international banking experience, to oversee "the restructuring of the [Bank of Cyprus] and the absorption of part of Cyprus Popular Bank".

"It means that from now until further notice I will be running the bank," he told Reuters on Tuesday. "It could be short term ... or it could be longer."

At the same time, the Central Bank appointed Andri Antoniades, a chartered accountant with 28 years of banking experience, five of which as acting CEO of HSBC in Cyprus, as the special administrator who will oversee the split and winding down of Laiki.

Ironically, Kypri took over as CEO last September after the Bank of Cyprus reported record losses due to its exposure to Greek debt with the sole purpose of restructuring the bank, downsizing it by selling assets or seeking strategic partners and reducing the workforce through voluntary retirement programmes.

Meanwhile, the resignation of Chairman Andreas Artemis was rejected by the rest of the board on Tuesday, as were the resignations of board members Vassilis Rologis, Costas Severis, Anna Diogenous and Takis Arapoglou.

Kypri said he was summoned to the central bank early on Wednesday and asked to submit his resignation.

"The reason I was given was that, based on the resolution decree recently passed by parliament and upon demands of the troika, an administrator had been appointed at the Bank," he said in a written statement.

"Until now I have not received a formal letter from the governor of the Central Bank on the matter," he said.