Gold Magazine June - July 2013, Issue 27 | Page 34
THE
PRUDENT
BANKER
Gold: In what way has the new financial
environment, created in Cyprus after the
Eurogroup decision and loan agreement,
affected Hellenic Bank and the measures it
has taken?
Makis Keravnos: The changes to the financial sector and the economy, particularly
those emanating from the decisions taken by
the Eurogroup, as reflected in the Memorandum of Understanding (MoU) that Cyprus
has signed, have created a new environment
for Cyprus and changed the banking sector
significantly. Hellenic Bank, despite taking
precautions and, as always, managing the
effects of the crisis in the best interest of its
shareholders, customers and investors, has
unfortunately also had to suffer the consequences of these decisions.
obtains a license from the Securities
and Exchange Commission to operate
as a Cyprus Financial Services Company.
2004 Opening of the new Head Office building in Nicosia. • Adoption
of EFQM (European Foundation for
Quality Management).
2005 Hellenic Bank is recognised
for the second consecutive year by
Hellenic Bank Group CEO Makis Keravnos acknowledges that the decisions
taken by the Eurogroup and the repercussions of the Memorandum of Understanding between Cyprus and the
Troika have changed the banking sector
significantly, caused a loss of confi-
Although the Group is not subject to any
reorganisation/resolution measures, and its
customers “escaped” a levy on their deposits,
it will be affected by the changes to the supervisory/regulatory framework that are included
in the MoU. In addition, the restrictions
imposed on the transfer of capital and, generally, the present negative economic environment and the drastic changes to the other two
banks have all had a direct negative impact on
the Group.
We believe that the Eurogroup’s decision
was unfair to Hellenic Bank’s customers and
investors, who are feeling the consequences
even though they chose a Bank which took
timely decisions and preventive measures in
order to minimise the effects of the crisis,
which was not in any way caused by the actions of our Group. However, despite the
decisions that have negatively affected the
financial system, Hellenic Bank continues to
provide a smooth service, to take preventive
actions and to maintain its strong balance
sheet. At the same time, it is making constant
efforts to strengthen its capital base and to
maintain a healthy liquidity position.
Since the Eurogroup decision on Cyprus of
25 March 2013, the Board of Directors, the
Executive and General Management of the
Group have focused on taking measures to
handle all potential and anticipated negative
impacts on its operations due to the new circumstances. In particular, the loss of business
confidence in Cyprus is a major hurdle and
one that need to be overcome through a joint
effort by the Government, the Central Bank,
local businesses and individuals, as quickly as
possible.
JP Morgan for its fully automated
transfers of almost all SWIFT payments sent from Hellenic Bank to
JP Morgan.
2006 The leading quarterly magazine The Global Custodian, specializing in the international security
services business, names Hellenic
Bank’s Custodian Service as first
among custodians in Cyprus.
32 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS
What are the main challenges that Hellenic Bank is currently facing and how is it
called to manage them?
The biggest challenge that Hellenic Bank is
facing at this moment is to ensure its recapitalisation, by achieving the goal of maintaining its private ownership and avoiding the
need for state support. According to the
PIMCO report – about which Hellenic has
expressed its reservations, citing among other
concerns its non-transparent nature – on the
recapitalization needs of the banking sector,
Hellenic Bank has a capital surplus of €23
millio n according to the baseline scenario
and a capital gap of €333 million according
to the extreme scenario. Following the sale
of the Bank’s branch network in Greece to
Piraeus Bank on 26 March, in addition to
the savings resulting from the sale, the capital
gap of the Bank was reduced to an estimated
€300 million (according to the extreme scenario). The Central Bank of Cyprus has given
the Bank until the end of September to find
the funds required on the basis of this scenario and we are examining various financial
and legal options in relation to this. The situation is quite complex and difficult, involving
painful measures such as the sale of our Greek
operations, but we are hopeful that we can
maintain the private status of the Bank and
that we will not need any state support, despite the difficult conditions and the negative
environment in which we operate.
How have the restrictions applied by the
Central Bank of Cyprus (CBC) affected
the banking system as a whole?
Hellenic Bank is obliged to comply with the
2007 The Ukrainian Central Bank
grants approval for the opening of a
Representative Office in Kiev. • For
the second consecutive year, The
Global Custodian ranks the Custodian Services of Hellenic Bank first
among custodians in Cyprus. • Hellenic Bank becomes the first Cypriot
bank to offer trilingual Electronic
Banking services, after the intro-
duction of the Greek and Russian
versions of Hellenic Net Banking.
2008 ISO 9002 international
service quality certification is reconfirmed for the Limassol International Business Centre. • The Global
Custodian recognises the Bank’s
custodian services unit as the ‘Top
Rated’ Custodian for the third consecutive year.