CYPRUS MAIL Tuesday, August 21, 2012
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BoC is mulling loan-book swap Bank moves to strengthen capital base
Finance Minister Vassos Shiarly at yesterday’s House committee meeting
New board for Cyprus Airways AFTER a marathon meeting, the House Finance Committee and the government yesterday agreed on the eight new members of the board of ailing carrier Cyprus Airways (CY). Conclusion of the procedure means CY would receive around €15 million – part of a €31 million share capital increase conditionally approved by parliament last month. The cash will be released by the state when the new board is formally appointed. Parliament last month passed a law calling for the replacement of the eight state-appointed members of CY – one of the conditions they attached for the release of the cash. Parliament also wants the company to draft a new reliable restructuring plan within three months before it releases the rest of the money. Following hours of discussions, MPs and the government agreed on accountant and businessman Stavros Stavrou to head the
board, flanked by former planning bureau director Panicos Pouros, accountant and business consultant Minos Charalambous, Adonis Pigasiou, member of the University of Cyprus Research Centre, Achilleas Tsangaris, accountant, and Kyriacos Kakouris, senior finance ministry official. The other two members were chosen from the workers’ ranks a process that caused most, if not all the delay yesterday. Eventually it was agreed to appoint captain Charalambos Tappas and Xenakis Xenofontos, the head of CY’s engineers. As a precondition both men would have to give up their positions in their respective unions. “They will represent themselves in their personal capacity and not the unions,” Finance Minister Vassos Shiarly said after the meeting. The board has three other members who represent private shareholders.
TEACHING VACANCY 2012-2013 The American Academy Larnaca has a Geography teaching vacancy for September 2012 (part time). All applicants should have a first degree in the above subject area. A post graduate teaching qualification will be an advantage. Applicants should be fluent in English. Further information as well as an application form for the above post can be found on the website under ‘vacancies’: www.academy.ac.cy Applications should be emailed to info@academy.ac.cy by 12 o’ clock noon, Friday 24th August 2012. Salary according to qualifications and years of service. Canvassing will disqualify
BANK of Cyprus (BoC) is looking into swapping part of its loan book in Greece with a Greek bank operating on the island as part of moves to strengthen its capital base, it said in a stock exchange filing yesterday. Cypriot banks operating in Greece have been battered by the country’s debt crisis and deep recession which have caused losses in the sovereign debt restructuring and a rise in non-performing loans. As a result Cyprus sought emergency financial aid from its EU partners on June 25. The filing from the island’s biggest lender came in response to a newspaper report that it is in talks with Greek lender Alpha Bank on swapping part of its loan book with Alpha’s loans in Cyprus. “In the context of planning to strengthen its capital position and shield its balance sheet, the bank is looking into a number of options.
One such option is exchanging ... assets and liabilities with one of the Greek banks active in Cyprus,” BoC said in the filing. “At this stage there is nothing specific to announce,” it said, without naming any Greek bank. Alpha Bank, which declined to comment, is one of Greece’s three largest lenders which have offered to buy Credit Agricole’s struggling Greek unit Emporiki Bank, put up for sale by the French lender to limit its exposure to Greece. The report by daily newspaper Kathimerini said Alpha Bank’s impaired loans in Cyprus were smaller than the BOC’s non-performing credit in Greece and that the difference would be made up in some form including shares. Greece’s economy is expected to stay in recession for a fifth straight year in 2012, with gross domestic product seen contracting by more than 7.0 per cent. BoC rattled domestic markets by unexpectedly seeking
state financial support just prior to a regulatory deadline to bolster its core tier 1 capital in June. A few days earlier the lender’s board told shareholders it needed just €200 million to replenish its battered capital. The capital requirements of the Popular Bank, was a key reason forcing Cyprus into requesting the international bailout. Both banks suffered record 2011 losses as a result of a write-down in their portfolios of Greek sovereign debt, an impairment agreed by European leaders, including Cyprus’ president, to make Greece’s debt more sustainable. The decision proved costly for the island, with the Popular Bank needing at least €1.8 billion from the state, while BoC has asked for €500 million. BoC posted losses of €1.37 billion in its full-year 2011 results after the Greek sovereign debt write-down.