THE BOARD of directors of the dear old Bank of Cyprus have thought of a quite brilliant way to mark the first anniversary of the Eurogroup decision that allowed the bank to take half the money of its depositors and wipe out its shareholders for its recapitalisation purposes.
As a show of respect and deep gratitude to its depositors, the directors of the B of C will be flying to Moscow on March 25 – the actual day, 12 months ago, the Eurogroup made its decision – so they could hold a ‘special anniversary’ board meeting there. The Russian directors will probably already be there, thus saving the bank of the cost of the five business class air tickets.
The directors, who will be accompanied by their spouses, will stay at the super-luxury Ararat Park Hyatt Hotel in the centre of Moscow, a few minutes’ walk from the Kremlin and Red Square for four days, even though board meetings rarely last longer than one afternoon.
The cheapest room at the Hyatt is €362 a night with deluxe rooms costing €432. It is doubtful the directors would have been booked into suites which cost a little over €800 a night as this would have been a bit extravagant in these difficult times for the bank.
The bank’s directors obviously did not want to be accused of spending too much of the money taken from the depositors on the special anniversary holiday. After all the strict Professor Panicos is still the Governor and he might not approve of such profligacy, even though he also had a passion for first class travel and luxury hotels, as long as the Central Bank was picking up the bill.
HAPPY BUNNY chairman Christis Hassapis came up with the brilliant idea of combining business (very little) with pleasure (lots of it), wasting the struggling bank’s money on a totally unnecessary trip to Moscow for a board meeting that could have been held in Strovolos at zero expense.
Admittedly, he has every reason to celebrate the anniversary of the Eurogroup decision that gave him his big break in life. He is one of the few people in Kyproulla who benefited on a massive scale from the bail-in, seeing all his dreams come true as a result of it. Overnight he acquired everything he did not have – fame, social status, instant recognisability, power and several suits.
This is why he is always in euphoric mood. He is now in a position to arrange an all-expenses-paid, four-day holiday for the 15 directors of the B of C and their wives/husbands in a super-luxury hotel in Moscow without justifying his decision to anybody.
And his generosity, funded by the bailed-in depositors’ money, is designed to win the loyalty of his fellow directors, whose support could be necessary for him to hold on to the chairmanship. Wining and dining them at Moscow’s very expensive restaurants is not a bad way to win the support of the Cypriot directors. The mega-wealthy Russian directors will not be impressed by his generosity, but they will appreciate going to a board meeting by car rather than by private jet.
Regardless of all this, the truth is the chirpy chairman sent out a reassuring message to the banks’ customers – their seized funds were being put to very good use.
THE HAPPY BUNNY has been using his position to build up his personal power and is said to have developed dictatorial tendencies at the bank. He has decreed that nobody apart from him and CEO John Hourican is allowed to talk to the media.
As Hourican is not interested in talking to the local media, the publicity-crazed chairman has become the only person available to speak to newspapers and television stations. A few weeks ago Christis vetoed plans by the CEO to hire a press spokesperson (a candidate was interviewed before he found out about it) so that he could remain the one and only person with the authority to speak on behalf of the bank.
It is not even as if he comes up with very smart remarks when speaking to the media. In an interview published this week in Dutch business newspaper, De Financiele Telegraaf he said the bank’s financial results for 2013 showed some encouraging signs. It was not clear from the interview translation whether last year’s losses in excess of €2 billion were one of the encouraging signs.
But his most revealing response was that “the experiment of the hair-cut was unfortunate.” While nobody could ever accuse him of allowing such an unfortunate experiment to be carried out on his hair, he should acknowledge that the deposits hair-cut, for him personally, was a very fortunate experiment indeed.
Without it, he would not today be the happiest bunny in Kyproulla.
THE BIG celebrations for the hair-cut anniversary should be taking place at the Bank of Piraeus, which benefitted more than anyone from the Eurogroup decision that forced the sale of the Cypriot banks’ Greek operation to it.
Thanks to the deal, negotiated by Professor Panicos’ favourite consulting firm Alvarez and Marsal, the B of P, which was on the verge of collapse – in a worse financial state than the B of C – overnight became Greece’s biggest bank. And the price it paid was peanuts. As one banker has said, the deal enabled “the transfer of assets worth €4bn to Piraeus and bankrupted the B of C”.
This would not have been possible without the resolution law Panicos drafted in 2012 and kept a carefully-guarded secret until March 22 last year when he submitted it to the legislature warning that if it was not passed the same day the ECB would close down the B of C. The law had a provision allowing the Central Bank to sell assets of banks without the approval of a bank’s board, which is a requirement under company law.
The B of C board had rejected the ridiculously low price Piraeus offered for its assets in Greece, but it was over-ruled by Panicos, who “always acted in the best interest of our country.” In this case, he acted in the best interests of Piraeus and has earned the right to be the guest of honour, if the bank has an anniversary bash.
THE KYPROULLA dream (fame, power and money), which Christis has been living since last September, is coming to an end for Cruella Markadji at the Central Bank who had gone from being just another anonymous secretary to becoming the ultra-powerful PA of the Governor as soon as AKEL appointed Professor Panicos.
Now Cruella’s glory days are coming to an end. With Panicos set to leave in a couple of weeks, she will no longer be able to the waltz around the Central Bank, showing off her power, barking orders and terrorising staff. And the all-expenses-paid trips abroad, accompanying the governor, are over as well.
I hear that the desperately miserable Akelite apparatchik is trying to cope with her pain by writing poetry. A sensitive soul, deep down, she has been posting her depressing poems, about dead-ends, loneliness, crying endlessly on her Facebook page, according to friends that have access to it. Despair often fuels great creativity and Cruella may discover that her real gift is for poetry rather than running a Central Bank.
STAYING on banking issues, you have to admire the ability of the obnoxious bully Loizos Hadjicostis, President of the bank employees union ETYK, to always get his way. Some 10 days ago, the collective agreement was renewed for his members and they got everything he was demanding in exchange for agreeing to small pay cuts.
Bank employees will carry on paying a paltry 0.58 per cent on housing loans and one per cent on other loans that the rest of us are paying seven and eight per cent for. They are paying less interest than the banks are offering to attract deposits – another example of the B of C putting the money it took from depositors to good use.
But insufferable Hadjicostis’ greatest achievement was to secure the extension of the retirement age to 65, despite very strong opposition from the banks which felt this would be a very costly measure, as it would mean keeping on its highest paid employees for longer. However the bully was as intransigent as a Turk on this issue and got his way. Without the extension he would have been obliged to retire and step down as president of the union. He would have called an indefinite strike at all banks rather than allow that to happen.
OUR LEADING daily Phil has found a very clever way of generating money in these cash-starved times. It finds a sponsor to pay for the publication of a glossy magazine about some issue of supposed public interest, sells advertising in it and offers it free to its readers.
In January it did one about our economic woes and the challenges we would face in 2014. It consisted of some 50 articles, most of them mind-numbingly boring, written by ‘local personalities’. The issue was sponsored by the generous B of P.
In February it published a similarly uninspiring mag on the challenges and prospects of tourism. It was sponsored by the Cyprus Tourism Organisation, to the tune of €35,000. Why is the CTO wasting money funding Phil’s vanity publishing? Thirty-five grand would have been much more usefully spent promoting Cyprus in a publication abroad. Someone should inform the CTO general manager Marios Hannides that his organisation’s mission is to attract tourists from abroad and not to waste the taxpayer’s money helping out local business.
THE SUPPORTERS of the annexation of Crimea by Vladimir Putin, re-discovered their voice this week, urging Prez Nik to oppose any proposed sanctions against Mother Russia at the European Council.
In the end the sanctions were so innocuous, even Nik was able to support them, without fearing a backlash from the supporters of Mummy Russia’s right to invade, occupy and annex another country. As EDEK reliably informed us there were no similarities between Russia’s actions and what Turkey did in Cyprus. “Support for the principles of international law is one thing and the intentional confusion and distortion of dissimilar events and situations another thing.”
That makes no sense at all, but I doubt it was EDEK’s intention to do anything more than confuse us.
APPRENTICE Makarios, Yiorkos Lillikas urged Nik to put the national interest above everything else and not align himself with the US and other countries that wanted to impose sanctions on Mother Russia. “We expect him to consider the cost to the Cyprus problem and the Cyprus economy of siding with the US,” warned the Paphite demagogue.
He needn’t have got so stressed about the issue. The Cyprus economy will suffer a cost, not because of our support for sanctions, but because in his last address to his people, the ultra-nationalist Putin vowed to bring back all offshore companies to Russia. As for the Cyprob, I am sure Russia will carry on offering the help it has always given – changing words and phrases in Security Council resolutions that we object to.
US AMBASSADOR John Koenig, in a speech he made at Larnaca Rotary Club last Tuesday, related a story told to him by the late Galfcos Clerides, when he was serving in Cyprus in the mid-nineties. This is what he said:
“One of the first times I met him (Clerides), he told a story about what it was like to be the Speaker of the House of Representatives of Cyprus in the very early years of the Republic.
“He was lucky to have been sent out by President Makarios to try to increase awareness of the Cyprus situation among the leaders of the Commonwealth. He had been seated next to the President of India one afternoon in New Delhi when it was quite warm. The (Indian) President seemed to be deep in thought, hands in front of him in this caged fashion, as Clerides rolled through the various aspects of the Cyprus issue over about 20-30 minutes. He was getting into some of the more cogent reasons India should be more interested in Cyprus, and then suddenly, he got to the conclusion. Mr. President, it has been a pleasure to see you, and the President of India said: ‘I am glad to hear that the situation in Jamaica is really coming along’.”
The late, great Spy Kyp, who visited India as president many years later had a very different experience. On his return home he triumphantly announced, “there is great interest for the Cyprus problem in India.”
SPEAKING of India, I hear that it is being seriously considered for the next board meeting of the B of C, but the happy bunny has still not decided on a city.
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