By Jean Christou
The recent injection of €1 billion into the Bank of Cyprus (BoC) has taken discussion about the bank away from whether the bank will survive to ‘how valuable is this bank? , CEO John Hourican has said.
In an interview with the Sunday Times in Dublin, Hourican recounted the partly-stormy shareholders meeting in August where he had to make an impassioned plea that it was not about foreigners coming to loot the banks, but a vote of confidence from some of the most sophisticated investors in the world. It was something to “celebrate, not denigrate”, he told the Times.
The recapitalisation of what the newspaper described as “Europe’s most knackered bank” was a considerable notch in Hourican’s belt, less than a year after he took up the job. Hourican had previously been head of investment banking at RBS where he became “a politically trussed up and highly paid sacrifical lamb in the Libor rigging scandal in which he played no part”.
Six months later he found himself in Cyprus at the helm of BoC and has no regrets, saying the job appeals to the “contrarian” in him.
He said his decision was partly driven by the injustice of the bail-in.
“I think the bail-in of depositors was a very aggressive act towards a small nation that had sat within the protection of a larger federation,” he says. “I felt the country had been poorly treated.”
Hourican told the Times he had set “an ambitious target of declaring war on all fronts”, cutting jobs, selling loans and radically altering the culture of the bank including setting up a restructuring and recovery unit.
He said a bank in Ukraine has been sold, loan books in Britain, Serbia and Romania were also on the block. BoC’s Russian bank is not up for sale, but Hourican said BoC was not a natural owner.
He said he has cut 1,000 staff there but Russia and the CIS were still important to Cyprus, which he said had earned “an unwarranted reputation”, particularly from sections of the German media.
Anti-money-laundering protocols were “of the highest international
standards” at the bank, he said.
Hourican, 44, is paid €800,000 a year, and no bonuses or share options.
“I wanted it that way,” he said. He was also full of praise for the government, the president, the minister of finance and central bankers.
“They are “very principled, very patriotic and very straightforward,” he said.
Hourcian said BoC was only now starting to address its non-performing loans. “There was a certain absence of moral hazard,” he said, adding that the new laws should reduce foreclosures to two years.
When Hourican took up the BoC challenge, he said it looked like a three to five-year job but with the early share capital rise, the timetable had changed but there was still work to be done, he said.