Cyprus Mail
Business Cyprus

Former co-op chief says NPLs were declining (updated)

Former co-op bank CEO Nicolas Hadjiyiannis said they had managed to achieve a substantial reduction of non-performing loans before the lender was shuttered earlier this year but he also said European supervisors had behaved like colonialists.

Testifying before an inquiry looking into the collapse of the co-op for the third day, Hadjiyiannis said they got the “colonialist treatment” from European supervisors who had taken over from the Central Bank of Cyprus in 2014.

“We got an unbelievable hammering at the time,” he told the three-member panel probing the collapse of the lender which had been nationalised in 2013.

Hadjiyiannis said in one meeting in 2015 his eyes welled up and he almost walked out.

“I was never insulted so much in my life. I don’t accept insulting the bank and my country. They were unbelievable… they shouted at us.”

The high levels of NPLs and the lender’s apparent inability to collect its dues were among the main reasons for the co-op’s demise.

Looking back, Hadjiyiannis said he could not see what else he could do to achieve a bigger reduction.

The co-op’s NPLs peaked in the summer of 2015 at €7.7bn but were reduced to €6.4bn by the end of December.

Hadjiyiannis got the third degree from the head of the panel Giorgos Aresti for not being personally aware of a list of problematic loans compiled by the bank for each district.

The problematic loans ran in the thousands.

“It was the heart of the problem…
why did you delegate this to your subordinates?” he pointedly asked the witness.

The panel also heard of the existence of over 3,000 accounts held by clients who were associated with Politically Exposed Persons (PEPs).

Combined, these accounts accounted for loans worth almost €1bn.

Approximately €200m of these loans were classed as non-performing, with an average arrears of 3.6 years.

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