BANK OF Cyprus CEO Andreas Eliades yesterday lashed out at the underhand tactics of his counterpart at Marfin Popular Bank on the day the BoC announced a record first-quarter net profit rise of 67 percent to £62 million.
Eliades, speaking at the presentation of the BoC’s first quarter results for 2007, accused Marfin CEO Andreas Vgenopoulos of trying to “pull wool over the BoC shareholders’ eyes” by trying to sneakily acquire the bank without having to pay a penny.
Yesterday’s presentation centered on the media frenzy surrounding Greek financier Andreas Vgenopoulos’ call for a merger of the overseas activities of the two rival banks.
The Bank of Cyprus reiterated their view that the proposal was hostile and was part of Marfin’s long-standing plan to take over the BoC.
“It’s just a guise to take control of Bank of Cyprus, to get us on the cheap, for free,” Eliades said. “This co-operation that Mr Vgenopoulos is talking about has never again been seen in the international market.
“A call to merge international activities has never happened before, two banks simply cannot be rivals at home and partners abroad. It would effectively be an amputation of the bank.”
MPB also announced impressive results for the first three months of the year on Wednesday, however Eliades believes that the two banks have an entirely different approach.
He continued his attack on their rival bank by saying “it is obvious that we do not have a common philosophy with Marfin”, while he quoted statements Vgenopoulos had made in the past as an indication that the Marfin CEO could not be trusted.
The issue of a possible alliance between the two banks is expected to come to a head on June 6, when Marfin is expected to raise the issue at the annual shareholders’ meeting of the Bank of Cyprus in Nicosia. Marfin is the single largest shareholder in BoC with an 8.3 per cent stake.
Deputy CEO Charilaos Stavrakis expressed his confidence that BoC shareholders would not fall into the trap set by Vgenopoulos.
“We are very certain that our shareholders will deliver an unanswerable response to Vgenopoulos during the AGM,” he said.
The Bank of Cyprus described the results for the first quarter of 2007 as “spectacular” and largely attributed due to solid lending volume growth and cost containment efforts.
Apart from announcing after-tax profits of £62, an increase of 67 per cent on the corresponding period last year, the bank posted a record high 26.6 per cent return on equity, a value that exceeds the 25 per cent target set for 2009.
The bank also recorded an all-time low cost to income ratio of 44 per cent for Q1 2007, five per cent down from Q1 2006.
The island’s largest lender’s net interest income rose 28 per cent to more than £100 million, while pre-tax profit rose 62 percent to 124 million euros and earnings per share rose 65 percent to 19.3 cents per share.
Bank of Cyprus reported strong growth in core banking activities, particularly housing loans, and especially in insurance. It also reported strong growth in deposits, with a 20 percent annual increase in Cyprus and 21 percent in Greece, which has already become a key market.
The bank said it stuck to its forecasts of a 31 per cent increase in overall profit for the year to 415 million euros.
In a bid to make overseas markets account for the 70 per cent of its operations by 2009, the BoC opened a branch in Romania earlier this year and confirmed that it was exploring the possibilities of expanding to add to its branches abroad in Greece, Russia, the Ukraine, the United Kingdom and Australia.
Eliades also announced the introduction of a Reward Scheme for BoC staff based on results, while refused to be drawn into exactly how much money would be given to the personnel saying only that “the scheme would be rewarding to the staff, who play an integral part in these spectacular results, while at the same time will not be detrimental to the shareholders”.
??
??
??
??
