By Stelios Orphanides
A Cyprus Cooperative Bank board member said that the bank wasted too much time on trivia which ultimately prevented it from implementing actual policies that would have helped the bank weather the storm, the Cyprus News Agency (CNA) reported on Thursday.
The merger of the 18 independent cooperative banks should have taken place earlier than early last year, Charalambos Christodoulides, a board member appointed in October 2013 who has already tendered his resignation told the committee tasked by Attorney-General Costas Clerides with probing the demise of the bank said, according to the CNA.
The implementation of this particular policy was difficult as it provided for the closure of branches and rationalisations, he continued.
Indicatively, the preparation of voluntary exit scheme took two years amid resistance of affected staffers, while the bank spent precious time in interviewing candidates to cover deficits in risk analysis, he said.
He also noted that the Co-op was constantly a topic in the news which led to the conclusion that politicians and state officials, including the Auditor general, were intervening with the bank’s affairs, he said. The auditor, he said, should have been more careful with respect to the bank and should have more carefully read the minutes of the board’s meetings.
The board member also said that the handling the plan to reduce the government’s stake in the bank as did not lay entirely with the bank, as the government, owner of more than 99 per cent of its shares, was also directly involved.
Christodoulides also told the committee that in a November 20, 2015 meeting the board prepared a to-do list comprised of six actions, which included the merger of the cooperative credit institutions into one corporation, the transfer of staff and assets, the organisational structure, the centralisation of services, the reduction of the branch network and the policy on the government’s exit from the Co-op, with the latter being handled by the ministry of finance.
Another important board meeting, less than three weeks before, the board discussed a preceded meeting of a Co-op delegation with supervisors, who expressed their main concerns about the bank’s ownership status, the high percentage of non-performing loans and concerns to the bank’s social role preventing it from taking measures.
Lastly, he said that while he ultimately agreed with the selection of Spain’s distressed asset specialist Altamira, he initially dissented when the proposal was presented to the board by the bank’s consultants Blackrock, the US investment management firm, on the grounds that Blackrock had not presented alternative options.
