Hellenic benches CEO over staff share buys

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Hellenic Bank’s CEO Oliver Gatzke has been sidelined by the board pending an investigation into allegations that he had forced staff into buying HB shares in a bid to boost the share value.

In a statement to the Cyprus Stock Exchange on Monday, the island’s second-largest lender informed the authority it had to suspend its CEO pending their investigation into the matter, which could be construed as market manipulation.

“In order to ensure the smooth conducting of the investigations, it was necessary for the CEO to abstain from his duties until the completion of the said investigations,” said Hellenic’s note to CySEC.

During his absence, Gatzke will be replaced by Petros Arsalides, secretary of the board of directors and general manager of the chairman’s office.

According to reports, the CEO of Hellenic’s largest shareholder Demetra Holdings Plc, Nearchos Ioannou, accused a “high-ranking bank official” of pressuring staff into buying shares at the bank’s AGM last month.

Reports claim that Ioannou’s description of the said official clearly matched Gatzke.

Demetra is Hellenic’s largest shareholder, with a 21% stake.

According to Phileleftheros daily, the accusations prompted a reaction from the Securities and Exchange Commission, which requested that Hellenic conduct a probe into the accusations.

Following CySEC’s request, Hellenic said its CEO Oliver Gatzke would be going on compulsory leave until the investigations are concluded.

Gatzke is considered the driving force behind the bank’s 2022-2024 Strategic Plan to transform and address structural challenges, with an increased focus on digitalisation and cost control.

The bank’s three-year plan includes packaging and selling off Non-Performing Loans, such as the most recent deal, Project Starlight.

Project Starlight, the sale of a €700 mln of the gross non-performing loan portfolio and an agreement with now-defunct RCB to acquire its performing loan portfolio significantly reduced the bank’s pro-forma NPE ratio to c.3,6%, one of the lowest among peers.

The 54-year-old German banker joined Hellenic in March 2021 from Hamburg Commercial Bank.