Local
articles | 05 August 2014

Bank of Cyprus to help borrowers, says CEO

In the face of the foreclosures bill, Bank of Cyprus' CEO John Hourican recently assured mortgagers that repossession is not a Bank of Cyprus priority, nor will home auctions money ever be a source of profit for the bank.

"What we aim to do is provide loans to those who can bring in regular payments…we're not becoming a repossessions company," he added. Hourican stressed that the goal of the repossessions legislation is not to punish those homeowners who face genuine repayment issues, but deal with wealthy debtors taking advantage of legal loopholes in the system and refusing to pay up, even though they have the cash. The CEO was clear about his commitment to prevent mass sell-offs and protect vulnerable groups.

He was also confident about the bank's future, saying that the upcoming approval by the General Assembly of a capital increase will be crucial to both liquidity and trust and shall help stabilise the bank. With the repossessions debate raging and the House due to vote on relevant legislation by late August, the International Monetary Institute (IMI) said adoption and effective implementation of the bill was crucial to the resumption of bank loans and to restoring production and increasing employment.

In its report ‘Cyprus: Facing rising non-performing loans’, the IMI said a compromise had been reached with the Troika on repossessions, which secures a necessary equilibrium between the rights of both debtors and creditors. On the other hand, it questions the certainty of Cyprus completing the fifth memorandum evaluation, because of both the repossessions bill, as well as non-performing loans. It claims strong social reaction against the strategy agreed with the Troika on dealing with the high percentage of NPLs.

Centre-wing Diko, which has been quite vocal on the issue, seemed to confirm the IMI conclusions yesterday, when the party's president Nicholas Papadopoulos expressed strong opposition to many terms and aims of the repossessions bill. Asked whether Diko insists on voting against the proposed legislation, Papadopoulos said that he still recalled the President's commitments on protecting family homes and declaring that he will draw up legislation providing alternatives to debtors. Instead, he added, President Anastasiades has submitted a mass repossessions bill which puts the weight almost squarely on the shoulders of families, while those who owe the most in non-performing loans are simply left untouched. Papadopoulos pointed the finger at commercial banks and co-ops, saying they are not doing enough to reel in businesses not responding to their loan obligations. "Banks can issue decrees and warn with taking over the business and selling its assets," he said.

He further offered the assessment that repossessions are only a small part of the equation, as managing the banking crisis is a much wider issue which includes liquidity problems, funds that were transferred to Greece from the Cyprus banking institutions and of course the haircut as well as anerroneous NPLs strategy. "Disciplinary procedures should be stricter towards seeking those responsible for failing to protect Cypriot debtors," he noted. Papadopoulos said that all proposals are on the table in the framework of an inter-party dialogue including an Akel-Edek initiative on protecting the first home, as well as his own party's suggestion on creating a code of ethics for banks forcing institutions to restructure loans.

Source: InCyprus

Cooperation Partners
  • Logo for Cyprus International Businesses Association
  • Logo for Cyprus Chamber of Commerce and Industry
  • Logo for Cyprus Investment Funds Association
  • Logo for Association of Cyprus Banks
  • Logo for Invest Cyprus
  • Logo for Cyprus In Your Heart
  • Logo for Cyprus Shipping Chamber
  • Logo for Ministry of Energy, Commerce, Industry and Tourism
  • Logo for CFA Cyprus