Bank of Cyprus takes on 13.8 bln in Laiki assets

 * Edges closer to normalisation … at snail's pace *

Two months after the banking crisis erupted and second-largest lender Laiki Popular Bank was forced into resolution, the Central Bank of Cyprus announced a provisional opening balance sheet for Bank of Cyprus that is taking on about 13.8 bln euros in assets from the “good bank” operation of Laiki.
Last week, depositors received statements from the bank indicating what amount of their savings were confiscated as part of a 10 bln euro bail-in imposed by the Eurogroup to recapitalise the banks and the Coop institutions. In all, 37.5% of deposits of more than 100,000 euros were converted to Class A shares, with a further 22.5% held in reserve until the two banks’ consolidation process is concluded, probably by the end of June.
Further, some sense of normalcy seems to have return to the Bank of Cyprus as the interim board is now complete, following the latest re-appointment of ex-NBG boss Takis Arapoglou as director. The board is now chaired by former central bank senior manager Sophocles Michaelides and is tasked with appointing a new CEO for the bank, with Central Bank Governor Panicos Demetriades reportedly considering three candidates for the job, including former Piraeus and HSBC executive Michalis Colakides.
“The issue with the CEO should be resolved in the next few days. It's not an easy process, the new board has just been appointed for two weeks now (and in the meantime we had the Easter break), so to find someone very capable to be willing to take this position takes some time,” a senior banking official told the Financial Mirror.
Meanwhile, the lion’s share of the bank’s equity will probably end up in foreign hands as some 70% represents the conversion of deposits to shares, making it even more critical for the government to find a strategic investor. Some of the biggest local shareholders will now be the Bank of Cyprus provident Fund (2% stake), Laiki Bank Provident Fund (1.5%) and Cyta Provident Fund (1.1%).
Following several meetings between central bank and government officials, it seems that the capital controls on all banks and Coops may be almost lifted as early as this Friday, allowing the opening of new bank accounts for legal persons.
At the same time, Bank of Cyprus is working on a second wave of early retirement plans, following one in January for long-serving staff, in order to reduce the labour force from the current 5,500 to 4,250 people, initially targeting those who have more than 25 years of service at the Bank of Cyprus Group, as well as Laiki, while scaled cut back of a further 25% on salaries has also been agreed. Even branches are going through the re-branding process with logos and signs of the century-old Laiki Popular being removed and replaced with Bank of Cyprus.