Hellenic Bank CEO Oliver Gatzke steps down

In an unexpected move, Hellenic Bank on Tuesday announced that chief executive officer Oliver Gatzke will be stepping down from his position a year early.

The decision comes after Gatzke informed the bank of his intention to terminate his employment contract, valid until July 22, 2024.

Gatzke’s departure comes as a surprise since the bank has performed well during his tenure. In June, the bank announced that “2023 started on a strong footing for Hellenic Bank”, noting that the bank recorded a solid first quarter, generating profits of €69.7 million. This was primarily the result of higher income and cost rationalisation.

In addition, in its 2023 guidance, the bank noted that “the evolving interest rate environment will continue to support its financial performance in the coming years”.

According to its plan, the plan said that it expects its profit before tax for the full year 2023 to exceed €200 million.

The bank explained at the time that this is mainly driven by the expected changes in interest rates and the improved cost structure following the successful staff exit scheme completed in November 2022.

Describing the parting with Gatzke as “amicable,” the bank stated that, according to Gatzke’s employment agreement, he will be placed on a voluntary leave with full benefits until further notice.

In the interim, Antonis Rouvas, the bank’s CFO, will assume the responsibilities of the CEO.

Rouvas is well-acquainted with the bank and the Cypriot banking system, boasting international and local expertise.

Rouvas affirmed that the bank will remain focused on its goals, continuing to support its clients and the Cypriot economy without interruption.

In addition, the announcement noted that the bank’s objectives revolve around strengthening its business model and successfully completing its transformation plan.

Moreover, Maria Kelesi, head of accounting at the company, will temporarily assume the role of chief financial officer.

This leadership transition marks a significant moment for Hellenic Bank as it continues its pursuit of growth and financial stability in the banking industry.

Gatzke’s tenure at the bank

Since taking on the position of CEO at Hellenic Bank on July 23, 2021, Oliver Gatzke led the bank with a focus on innovation and technology, redirecting resources toward the bank’s online and automated services, reducing its overall number of branches, in order to curtail costs.

Gatzke has overseen a revitalisation of the bank in numerous ways, placing it on a trajectory of rationalisation and modernisation. This has involved numerous notable initiatives. These include Project Starlight, involving the sale of non-performing loans; the purchase of a performing loan portfolio from RCB Bank; a large-scale staff reduction scheme; as well as making the necessary moves that would allow the bank to provide dividends, if possible.

Project Starlight involved the sale of a non-performing exposures (NPE) portfolio and the APS debt servicing company.

The transaction, amounting to approximately €1.4 billion, included the securitisation of the Starlight Portfolio and the sale of APS Debt Servicer to Themis Portfolio Management Ltd, a subsidiary of Oxalis Holding managed by Pacific Investment Management Company LLC (PIMCO).

This move significantly reduced the bank’s NPE ratio from 13.5 per cent to about 3.6 per cent, de-risking its balance sheet.

The voluntary exit scheme took place on November 29, 2022, after an extended dispute showdown with the bank workers’ union Etyk. This had been a climbdown by the bank’s board, which had originally planned to issue redundancy notices to workers, sparking strike threats by Etyk.

Approximately 16 per cent of the group’s employees (446) participated, with 394 employees’ contracts being terminated during the fourth quarter of 2022 and the rest in the first quarter of 2023. The annual payroll cost saving was approximately €30 million, effective from 2023, excluding salary increases for remaining staff.

Another notable incident took place in October 2022, when Gatzke was placed on compulsory leave by the board of directors, which was followed by an internal investigation into allegations of statements and actions attributed to him.

The Cyprus News Agency, as well as other local outlets, reported at the time that the investigations were triggered after allegations were made against Gatzke at one of the bank’s annual general meetings.

The allegations involved reports of a “senior executive” advising staff to buy back shares of the bank on account of them purportedly being undervalued.

Gatzke returned to his duties in December of the same year, following a decision by the bank’s board of directors, after the aforementioned internal investigation had been concluded.

Meanwhile, in June of this year, the bank noted that in 2022, it recorded a profit of €24 million, compared to losses of €12 million in 2021, reflecting the progress in the bank’s transformation toward a client-centric and technology-driven bank.

Additionally, adjusted for the extraordinary cost of the aforementioned voluntary early exit scheme, the bank managed to achieve a profit of €95 million.

Moreover, the Hellenic Bank CEO said at the time that the encouraging first quarter of 2023 provides assurance that the bank is on the right track.

“We believe that the evolving interest rate environment will continue to support our financial performance in the coming years, and we expect the profit before tax for 2023 to be higher than €200 million, mainly driven by changes in interest rates, improved miscellaneous income,” Gatzke stated in June.

“Considering the bank’s expected financial performance and following the Project Starlight completion, the bank will request approval from regulators for commencing dividend payments for the financial year 2023 onwards.”

Before assuming his role as CEO of Hellenic Bank in July of 2021, Gatzke served as the chief financial officer and chief technology officer of Hamburg Commercial Bank AG (formerly HSH Nordbank AG).

During his tenure there, he focused on finance, IT and digitisation, business operations and facility management.

Notably, he was involved in co-leading the privatisation of a state-owned bank in Germany, attracting international financial investors.

Prior to his time at Hamburg Commercial Bank AG, Gatzke had an extensive career at KPMG AG in Germany, where he held various positions, including Partner Transactions & Restructuring Financial Services.