Cyprus Mail

Legacy Laiki head resigns, saying ‘I have had enough’

Legacy Laiki administrator Chris Pavlou

Legacy Laiki Special Administrator Chris Pavlou resigned on Tuesday saying he has had enough.

“I have resigned tonight,” he told the Cyprus Mail. “I have had enough.”

Last week, DIKO chairman Nicolas Papadopoulos launched an assault against Pavlou accusing him of mismanagement, in what appeared to be an attempt to get rid of the seasoned and well-respected banker.

Pavlou’s six-month appointment expired on Tuesday, and the Central Bank (CBC) had the option of renewing it – an eventuality Papadopoulos apparently wanted to eradicate.

Instead of renewal for six months, the CBC had asked him to stay on until the end of the year, at which point the administration of Legacy Laiki’s assets would be transferred to the European Commission’s Single Resolution Mechanism (SRM).

But at the same time an amendment to the resolution law was tabled before the House Finance Committee on Monday, which would prevent the administration of Laiki being transferred to the SRM.

Legacy Laiki’s administrator is mandated with maximising the value of the bankrupt lender’s remaining assets, so that its creditors can recoup as large a chunk of their losses as possible.

In this case, the bulk of the creditors are the depositors whose money – over €100,000 – vanished after the island’s largest lender, the Bank of Cyprus, was given a lifeline that required absorbing part of the failed bank.

And the part that wasn’t absorbed – Legacy Laiki – consists of those assets left behind for value-maximisation.

These were placed under the care of a special administrator, initially Andri Antoniades, who was replaced in April by Pavlou. Meanwhile, some of the Laiki depositors banded together and created SYKALA – the ‘Laiki Bank Depositors Association’ – to form a unified front and take the legal route.

If passed, the bill will allow the people who lost their money when Laiki went down – thus far collectively treated as a single unit represented in its entirety by SYKALA – to call a general assembly and appoint their own administrator.

The bone of contention appears to be the Investment Bank of Greece (IBG), a Legacy Laiki subsidiary, incidentally also headed by Pavlou.

This obscure entity is essentially a goldmine waiting to be tapped.

IBG is a relatively small bank, formerly owned by Laiki and licensed to operate in Greece.

Its entire loan portfolio was transferred to the Greek Piraeus Bank in the chaotic shuffle of March 2013, when the Greek operations of local banks were sold off to Piraeus to mitigate the risk of contagion to Greece.

Since then, IBG has operated mainly as a deposit-holding retail bank focusing on “commission income in order to avoid any credit risk and maintain its high capital adequacy and liquidity ratios”, with minimal risk exposure to speak of.

A bank with a capital buffer of over 40 per cent and an equally high liquidity ratio is, indeed, a very attractive proposition, especially in today’s environment.

Related Posts

Anastasiades bids farewell to Greece as president

Jonathan Shkurko

Ministries working together to combat human trafficking

Antigoni Pitta

Protective equipment grant scheme for 2023 announced

Jonathan Shkurko

Journalists union reelects Giorgos Frangos as president

Jonathan Shkurko

Employers should ensure employees can go to the polls, says Oev

Jonathan Shkurko

Election ads prohibited at polling stations

Andria Kades


Comments are closed.