Arab Bank: no decision on future of Cyprus operation

THE NEW country manager of Arab Bank in Cyprus, Sami Makarem, said yesterday no decision had been taken yet on the future of the bank in Cyprus.

Makarem was commenting on reports at the weekend saying the bank had decided to continue operations in Cyprus despite a deadlock in negotiations on the redundancy packages of a number of staff.

According to the Jordan Times, the bank, operating in Cyprus since 1984, decided to go ahead with its original plan to reduce the number of branches from 12 to four, and concentrate on business rather than retail banking.

Citing wage costs as 75 per cent of operational expenditure, the bank blamed the job cuts on high labour costs and the saturated retail sector, which made it difficult to compete with local banks.

It was this plan, which involved the redundancy of around 70 employees, that caused a crisis when Arab Bank failed to reach agreement with bank employees’ union ETYK.

ETYK requested voluntary, early retirement instead of redundancy. This would cost the bank an additional £2.5 million on top of the £2.5 million it was prepared to pay for redundancies.

A proposal by the Labour Ministry limiting the package to £3 million was rejected by the bank, and last week then country manager Jack Beighton wrote a letter to the Ministry saying its mediation was no longer required and that the bank was shutting up shop and dismissing all 176 employees. He then resigned.

The appointment of new manager Sami Makarem, along with the intervention of Central Bank Governor Christodoulos Christodoulou resulted in the possibility that negotiations would continue.

Yesterday, Makarem said he was aware of the report in the Jordan Times but said he had no new information. “We are trying to solve the crisis,” he told the Cyprus Mail.

The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.