The new CEO of Bank of Cyprus will be appointed soon, Sofocles Michaelides, Bank of Cyprus’ Chairman of the interim Board of Directors has said.
Following a €10 billion bailout agreement with the Eurogroup, Bank of Cyprus, the island`s largest lender, has absorbed the good part (insured deposits and assets) of Cyprus Popular Bank, which will be wound down. Under the agreement, 37.5% of uninsured deposits (above €100,000) will be converted into capital in a bid to recapitalize the bank, which posted mammoth losses after writing down is Greek bond holdings following the Greek sovereign debt haircut. Bank of Cyprus has entered a consolidation procedure, with its Board and senior management resigning following instructions of the Central Bank of Cyprus, acting as Resolution authority. The CBC appointed the 15 members of the interim Board who in turn elected Michaelides, a former CBC executive, as Chairman.
However, an additional 22.5% of uninsured deposits in Bank of Cyprus remain frozen until the independent evaluation of the bank’s assets to be concluded by the end of June.
"The March developments, the Eurogroup’s decisions and Cyprus’ loan agreement, have brought about rapid changes to the financial system. For the Bank of Cyprus and the Cyprus Popular Bank an era has finished with important success when they were serving the long-standing values of our community but with weaknesses when they began diverging from these values," Michaelides said in a circular to the bank’s employees.
Michaelides notifies the employees on the developments within the Board, whose mission is to oversee the bank’s restructuring and recapitalization until the next shareholder’s General Annual Meeting.
Describing the current period as "an unprecedented juncture of challenges but also big opportunities," Michaelides notes "the task for which we have been appointed is particularly difficult and unprecedented in the history of our country’s financial system."
"In light of the best interest of the bank and with dedication to the traditional values of Cypriot society, we are optimistic that by the end of our mission we will create the all new BOC strong, able to carry out its systemic role for which it is intended," Michaelides concludes.
