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Business Cyprus

Ross defends new BoC nominees, bank must embrace new technology

Wilbur Ross

By Angelos Anastasiou

IN AN interview with the US cable channel CNBC yesterday, American entrepreneur Wilbur Ross described former Deutsche Bank boss Josef Ackermann, whom he has just nominated as chairman, as being “uniquely positioned” to lead the bank in tackling strategic issues facing the bank.

“We had dealings with Dr Ackermann for a very long time through Deutsche Bank, which is one of our major banks,” Ross said. “I have great respect for him, particularly as a strategic goal manager, and I think as Bank of Cyprus clears up its delinquent loan portfolio […] it then needs to develop a strategy for how to deal with mobile banking, and how to deploy its resources.”

“So, I think Dr Ackermann is uniquely positioned to deal with those issues,” he added.

The billionaire investor, who sunk some €400m in the Bank of Cyprus’ capital raising last August, has himself been nominated for the vice-chairmanship of the Bank of Cyprus’ board. The shareholders’ annual general meeting, which will elect the new board, has been set for November 20.

Commenting on the direction he would like to see the troubled bank take in future, Ross seemed to have a clear vision of what it should be aiming for.

“It clearly needs to adjust to the new world of internet technology, just like other banks everywhere else have,” Ross said. “I think bricks and mortar are becoming a much less important component of the banking experience. In Bank of Ireland and some of the other banks we’ve had involvement with, we’ve created internet lounges so that people can feel very comfortable transacting more routine things, without the need for human intervention.”

According to CNBC, Ross said he was “hopeful” that Bank of Cyprus would pass new asset quality tests imposed by the ECB later this month. He argued that a lot was hanging on the results of the tests.

“Until banks find out whether the ECB thinks they have adequate capital, they’re not going to be aggressive about making loans,” he said.

Meanwhile, the association of Laiki depositors (SYKALA), who had their uninsured deposits converted to BoC stock when Laiki Bank was resolved in March 2013, claim they are entitled to a seat on the new board as they collectively remain the lender’s biggest single shareholder with a holding of 9.6 per cent.

“In the new board of the Bank of Cyprus, as proposed by the new shareholders, Laiki depositors are not represented,” SYKALA said in a statement.

SYKALA is represented in the current BoC board via Adonis Papakonstantinou, who was not included in the new shareholders’ proposals.

“Instead, the removal of the existing board member representing our interests is proposed,” the association added.

SYKALA said it will table the issue both with the new shareholders, the Central Bank of Cyprus and the Resolution Authority.

“We will seek to meet with the new shareholders to inform them of this omission, which we believe is not an attempt to exclude Laiki’s depositors,” the statement added.

“The principles of corporate governance necessitate the Association’s representation on the Bank of Cyprus board.”

It added that this would fall in line with the Central Bank’s view that all shareholder groups should be represented on the bank’s board.

“Anything short of this could be construed as a hostile stance towards the Bank of Cyprus’ largest shareholder,” SYKALA added ominously.

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