* CEO Hourican to deal with McKinsey plan for split, NPLs *
The Bank of Cyprus shares that resulted from the bail-in by depositors who are now the new shareholders of the Group, will be re-instated on the Cyprus Stock Exchange on January 31, 2014, only if the 9-month results for 2013 have been submitted by then.
The previous interim management’s plan was to consolidate the half year accounts with the now-resolved Laiki Popular Bank and return to the stock market some time in October or November.
However, the slow pace in merging the accounts and delays in approving candidates for the shareholders’ AGM that eventually took place on September 10, pushed back all plans, as the 4-month CEO Christos Sorotos and his executive team had to deal with keeping the bank intact.
The new board last week picked John Hourican, the former head of Royal Bank of Scotland’s investment banking arm, as its new CEO, who now has to review the restructuring plan commissioned to McKinsey consultants, which still needs the approval of the Central Bank of Cyprus and the Troika of international lenders.
One of the plans on the drawing board is to split the bank into two, in order to try and dispose of non-core assets, while attempting to bring down the runaway rate of non-performing loans.
"This is an unprecedented situation that has happened to Cyprus and to the Bank of Cyprus and I think that, while the problems are actually quite clear, the solutions are as of yet untested, and not clear to me given that I haven't yet taken full possession of the job," Hourican told journalists after meeting Anastasiades on Tuesday. He fully assumes his duties on Monday, November 4.
"We have a lot of work to do and we have to do a lot to restore the confidence, not just in the Bank of Cyprus but in the banking system in Cyprus."
"I will be moving here and I look forward to living in Cyprus and try to make the difference not just for the bank but also for the country," he added.
"There is a non performing loan issue in the bank which we need to resolve, not just domestically but also internationally, and of course that has to be resolved in order for us to restore the confidence on the deposit side of the balance sheet," Hourican said.
Replying to a question concerning the splitting into a commercial bank and a real estate entity, Hourican said it’s too early to say what precisely the solution will be.
On his part, BOCY Chairman Christis Hassapis said he briefed the President over the bank’s restructuring plan.
"The plan is like a Bible on the work to be done in the next five years," he added, noting that he believes that the bank is on track.
“I wouldn’t have taken the job if I didn’t think we can make a difference and I look forward to engaging with all of you and with the lawmakers and everyone in Cyprus over the course of the coming years,” Hourican said.
Soon after he was picked as CEO last week, he told the Financial Times he was “very excited” about the new challenge.
The 43 year old Irish banker added that his appointment was indefinite but envisaged three to five years for the restructuring of the bank.
The Financial Times, which described Hourican’s appointment as a “surprise comeback”, comments that his experience in helping to restructure RBS, which had to be bailed out by the UK government, is believed to be one of the reasons for him being placed at the helm of the Cypriot bank.
According to the Daily Telegraph, Hourican “beat off competition from former Irish Bank Resolution CEO Mike Aynsley” to land the job.
And the Guardian reminded its readers that the new Bank of Cyprus CEO had quit RBS in the wake of the bank’s fine for rigging Libor, even though he was not implicated in the scandal. “He left with a £700,000 payout but left behind £5m in share bonuses,” added the paper.
Get all the latest news and videos in your inbox. Register FREE