We’re sorry, bank tells shareholders

 

Cyprus’ second-largest bank yesterday apologised to irate shareholders for its exposure to Greek debt which has saddled the bank with mammoth losses and forced it to seek new capital.

Marfin Popular Bank, which was yesterday renamed Cyprus Popular Bank, posted 2011 losses of €2.5 billion after taking a 60 per cent write-down on the value of its Greek bonds.

It now plans a €1.35 billion share issue to meet regulatory requirements for a 9 per cent core Tier 1 capital adequacy ratio by the end of June.

Attempts to find new investors were continuing but the Greek economic outlook appeared to be holding some potential investors back, bank executives said.

The decisions were made amid shareholders’ intense criticism against the bank’s previous leadership, especially former chairman Andreas Vgenopoulos and former CEO Efthymios Bouloutas.

One shareholder went as far as to suggest Vgenopoulos is taken to court, for selling shares for €12, which are today worth just 10 cents.

Popular, created from a merger of two Greek banks and a Cypriot bank in 2006, amassed some 3 billion euros in Greek sovereign debt from 2007 to 2009.

“Looking back, it was wrong, and we must apologise,” Chief Executive Christos Stylianides told shareholders in Nicosia. “I know it is not enough, and we are doing all we can so the bank gets back on its feet, and we can add value for shareholders.”

The bank said it was actively looking for investors to participate in its new share issue and said there were encouraging indications of interest but hurdles remained.

“The truth is there are some reservations over the climate of uncertainty in the Greek economy,” said Michael Sarris, a former finance minister appointed as non-executive chairman in November.

“We believe a combination of a strategic investor with three or four institutional investors will be of help in raising capital,” he added.

 

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.