Bank of Cyprus has entered a phase of normalization, Minister of Finance Harris Georgiades has said, adding "we have reached a point where we can say we feel much more confident for the stabilization of our banking system."
Georgiades met with the President and the CEO of the Bank who briefed him on the progress with regard to the implementation of its restructuring plan. Georgiades` meeting with BOCY comes just a week before the arrival of a Troika mission for the third review of Cyprus` adjustment programme implementation.
In statements following the meeting Georgiades expressed satisfaction over the implementation of the restructuring plan.
"We can say that Bank of Cyprus has already entered a normalization phase," he said.
Pointing out that Bank of Cyprus is the island`s largest bank, Georgiades said significant progress has been noted with regard to management and governance issues and conveyed his support and confidence to the bank`s management.
The Cypriot Minister noted that the effort should continue not just in the Bank of Cyprus but also in all Cypriot banks underlying that "without a doubt we have reached a point that allows us to feel confident over the stabilization of our banking system."
On his part, Bank of Cyprus Board of Directors President Christis Hassapis said the bank is ahead of its restructuring plan as it has done much more than what is envisaged in the plan.
Replying to a question, Hassapis said the bank is working to contain the rise of non-performing loans (NPLs) that had exceeded 40% by September 2013.
"I think we will have positive results in that area as well," he added, noting, "there has been a stabilization of these loans and we believe that there will be a clear reduction of the NPLs in the next period," he concluded.
Cyprus banking sector came to the brink of collapse last year, when the government reached a €10 billion bailout agreement with the Troika (EC, ECB and the IMF) which featured a haircut on uninsured deposits, to save Bank of Cyprus (BOCY), the island`s largest lender, whereas Cyprus Popular Bank entered liquidation. Following the agreement BOCY has entered a resolution process, which concluded last July. Under a new Board and new management headed by Irish John Patrick Hourican, the bank, which relies heavily on ECB emergency funding, is implementing a restructuring plan and strives to contain soaring non-performing loans of the bank`s assets by September 2013.
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