Vgenopoulos quits Marfin Laiki with guns blazing

 * Costas Mylonas is new non-exec chairman *

Andreas Vgenopoulos, the outspoken architect credited with building up Marfin Laiki Bank from the second biggest lender in Cyprus into a leading bank in south east Europe and the CIS, has resigned as non-executive chairman and has left the board.
He left just as he had arrived on the Cyprus banking scene five years ago, amid controversy and critical of the island’s slow legislature and the media.
Representing the two biggest shareholders – his own Marfin Investment Group and Dubai Financial – Vgenopoulos still controls 28% of the shares and pledged to support the bank’s management in the current troubled financial times.
He is replaced by Costas Mylonas, until recently a non-executive member of the board.
Vgenopoulos cited a conflict of interest as the main reason for his departure, saying that the chairman should not represent a large shareholder.
“The Cyprus banking system will have to make up its mind on whether banks remain private sector entities or by receiving public support become partially or wholly nationalised,” he said, following the recently announced proposal for a 50% voluntary haircut of Greek debt, to which Marfin Popular Bank has an exposure of about 2.1 bln euros.
Vgenopoulos said that he was “convinced that at present, the interests of Cyprus and its people are aligned with the interests of the banks’ private shareholders” and that the management of banks “should not attempt to maintain banks in private hands at any cost.”
He said that Finance Minister Kikis Kazamias’ plans for a bank stability fund were “in the right direction”, but it still has some shortcomings, especially as regards assurances to foreign investors.
Any capital increase should be the last one and investors should not be urged to invest further in further plans at lower prices in order to meet stringent liquidity ratios as demanded by the European banking regulators.
In the case of a need for a government bailout, he suggested that private investors should be offered the first option to participate in any capital increase and that the state should follow to pick up the rest of any unsubscribed shares, albeit at the same price as that paid by the private investors.
Recalling that two years ago he had been somewhat “ungraceful” in his remarks surrounding his wish to merge Marfin Laiki with Bank of Cyprus, the island’s largest lender, and the clash that ensued with the Governor of the Central Bank, Vgenopoulos also remarked that “very rarely have I had favourable comments and most of the time [the media] has been unfair to me.”
He insisted that mergers are still good, arguing that in good times, the merged entities would benefit from synergies and profits and that in bad times a streamlined group would be able to reduce costs more efficiently.