ANDREAS VGENOPOULOS was never a very competent or dependable banker, as the collapse of Laiki Bank showed, but he has always been an excellent communicator and salesman. This was evident from the first day he set foot in Cyprus in 2006 in order to persuade Laiki Bank’s shareholders to agree to the merger with his Marfin Bank, with a share evaluation that blatantly favoured the latter’s shareholders.
However, he had promised the merger would create “a regional banking colossus” that would sweep everything before it in Greece and the Balkans and pay high future dividends. His sharp and clever sales-pitch convinced the shareholders and the new Marfin Popular Bank was established. Six years after the merger, there was no banking colossus but a struggling bank that took billions in Emergency Liquidity Assistance from the ECB, a proportion of which was used to prop up Vgenopoulos’ ailing banks in Greece that he had placed under MPB. It was at this time that the prospective colossus, which had invested €2.6 billion in Greek government bonds, had to be bailed out by the state, at a cost of €1.8 billion.
It is a lamentable record, for which Vgenopoulos should have felt deep shame and guilt. His leadership had caused Laiki’s eventual winding down in 2013, with thousands of people losing their savings, businesses seeing their capital wiped out and the state being left with a €9bn debt to the ECB that it passed on to the Bank of Cyprus. It would be no exaggeration to say that his arrival in Cyprus in 2006 turned out to be disastrous, not only for Laiki’s shareholders and depositors but for the whole country.
Instead of accepting some responsibility for the devastation he has caused Cyprus, Vgenopoulos does nothing other than pass the blame for what happened on everyone else. He regularly issues strong-worded statements, featuring his own stilted version of events and invariably blaming the “political and economic establishment of Cyprus”. While the Cyprus establishment has a large share of the blame for what happened, it does not absolve Vgenopoulos of his responsibilities, as he seems to believe.
Earlier this week a two-hour interview he gave to a CyBC presenter, who specialises in lifestyle shows rather than economics, was posted on the internet, because the corporation refused to broadcast it. The wily communicator was allowed to say whatever he wanted, rarely challenged or pushed by the interviewer who was clearly out of her depth. It was another monologue by Vgenopoulos, who seems unable to understand that no matter how clever his arguments and debating skills are, the fact remains that he led Laiki to bankruptcy. He might not have committed a crime in doing so, but that does not take anything away from his achievement.