* BOC and HB merger “would not add any value to the two banks” —
Archbishop Chrysostomos II, the outspoken head of the Church of Cyprus who has views on anything from matters of the state to the economy, wants to see a greater return on investments in the two Cyprus-owned banks and the best way to achieve this, he says, is for Bank of Cyprus and Hellenic Bank to expand their operations in Russia.
The Archbishop told the Financial Mirror in an interview that the two banks, where the Church commands a 3.7% and 25% stake, respectively, should consider closing some branches in Greece.
The prelate of the Greek Orthodox church added that merger talk between the two, as was the case between the National Bank of Greece and Alpha Bank, would not add any value to the two Cyprus banks.
“Both (Bank of) Cyprus and Hellenic have strong fundamentals to prosper by following independent and organic growth. Personally, I have great trust in the management of both banks and I am certain they will take the right decisions,” he said.
“It is vital that Cyprus has two major banks. If, however, a hostile bid is raised on either or both banks, only then will we consider this option and the underlying circumstances.”
“Considering the serious problems Greece is currently facing, combined with the significant exposure of their portfolios there, I would advise them to close a large number of branches and in a parallel move expand further into Russia where there is a strong recovery and there are clearly better prospects.”
“Russia is a market that must not be undermined by the management of both banks and I am sure they will shape their strategies accordingly,” the Archbishop added.
However, he raised an old controversial issue by saying that “although Marfin Popular is a major bank, due to its share structure it can no longer be considered a Cypriot bank. As I had stated in the past, Dubai’s presence as a major shareholder has changed many things for the Group.”
As regards the church’s significant holdings in BOCY and HB, as well as a 0.8% stake in Marfin Popular, the Archbishop said that due to the financial crisis, the church cannot increase its investments in the banks, as much as it would like to.
“Our revenues (from dividends) have also been reduced by two thirds – from 20 mln euros we used to earn in earlier years, last year they fell to 7.5 mln euros with a similar or worse situation this year. Unfortunately, I don’t see anything that will overturn this situation.”
As regards other ventures, Chrysostomos II said that his proposal to revive the bankrupt Eurocypria was based solely on safeguarding the wellbeing of the 300 or so employees and that he had proposed to the potential new investors that the airline’s headquarters move to Greece in order to be allowed to fly over Turkey, an idea that was rejected, after which the Church withdrew its interest.
As regards discussions for cooperation with the Qatari investors, the Archbishops said the matter was closed.
TURKEY – QATAR
“There was interest to jointly develop a commercial centre on a large parcel of land in Nicosia, but the deal did not go through, despite their invitation for me to visit Qatar.”
“We did not submit any proposal, nor did we see any offer. I think that Turkey is behind all of this which will probably even lead to the current venture with the (Cyprus) government to fail.”
As regards his sensitivity over labour issues and workers’ rights, the Archbishop admitted that he had suggested that 20% of the workforce at the drinks maker KEO, in which the Church has a controlling say, be laid off.
“In the past few years, the company has been loss-making and despite have a very large work force, we never proceeded with any redundancies. However, when some people rejected the offer that their wages be frozen for two years, I gave the order to fire them immediately.”
Finally, he said that the license agreement with Mega TV is being renegotiated and the Church’s proposals have so far been rejected.
“Our main concern is that the channel follows our policy on the national issue. If they do not agree by June when the digital platform comes into effect, then we will not renew the agreement and we will see ‘O LOGOS’ returning to our screens once again,” he concluded.
