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Business Cyprus

AKEL leader lashes out over NPLs appointment

AKEL leader Andros Kyprianou

By Sinead Kelly

AKEL leader Andros Kyprianou lashed out at President Anastasiades on Tuesday over a report by local daily Phileleftheros that the Bank of Cyprus (BoC) has appointed Anastasiades’ former law firm as legal consultants in its disputes with various customers who have particularly large non-performing loans (NPLs).

“The President will find himself exposed if his law firm starts foreclosure proceedings against ordinary people,” Kyprianou said, implying that the firm’s actions would reflect on Anastasiades and his policies. “I feel the President should have intervened, or the firm should have protected the President.”

Nikos Chr. Anastasiades & Partners, the law firm Anastasiades founded and ran until his election as President last year – at which point he resigned – has been reported as one of the three law firms selected by the BoC to serve as its legal consultants in dealing with some of its larger non-paying customers. However the law firm had issued a statement late last night rejecting the allegations.

The bank has found itself faced with a staggering NPL portfolio, which approaches 50 per cent, a significant portion of which represents some large loans taken out by big businesses which are currently unable to service them.

Some reports indicate that the bank’s 30 largest defaulting borrowers owe a total of €6 billion. Collecting on these loans would solve many of the trouble bank’s problems.
Besides Anastasiades’ firm, the paper named Scordis, Papapetrou & Co LLC, and Christodoulos G. Vassiliades & Co LLC and Char. Vassiliades as being appointed. The paper also cited sources indicating that the bank was close to settling 150 NPLs totalling over €30 million.

But Kyprianou appeared convinced that the firms would not necessarily be going after the big fish. “I don’t think that this will be the case,” he said. “I think that they will be going after borrowers indiscriminately, at least as far as I am aware.”

He also said he has known about this matter for weeks, but decided to come out now as he expected the appointment to be avoided.

“I have been aware of this for a month now,” he said, adding “I had not commented thus far because I expected that either the firm or the President himself would protect their credibility, which they still have time to do.”

The delay in effectively addressing the issue of NPLs has revealed strains in the relationship between the bank’s CEO, John Patrick Hourican, and the board of directors.
On Monday, board member Marinos Yialelis said while the executive management – meaning Hourican and his team – has been given a “blank cheque and all the tools they asked for” in dealing with the issue of NPLs, progress in collecting has been “unsatisfactory.”

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