“I am not saying we are through – the banking system and the economy still have a long way to go – there are important steps to be taken, but we can all see that the very difficult, dangerous times are behind us,” Harris Georgiades told state television. “We are in a period of stabilisation.” The new 16-member board includes six foreign nationals, mostly Russians, representing individuals who lost considerable amounts of money in the forced conversion of 47.5 per cent of deposits exceeding €100,000 in order to recapitalise BoC. Cypriot provident funds are also represented in the board, as well as the mighty Church of Cyprus, a major BoC shareholder before the dilution that followed the cash seizure. The finance minister said it was positive that the board represented the owners of the bank who had an incentive to see the bank do well.

The name that stands out among the foreign members was that of Vladimir Strzhalkovskiy, a former KGB official and ally of Russian President Vladimir Putin. Strzhalkovskiy was elected vice-president of the board, which is headed by academic Christis Hassapis. Other members are Dmitry Chichikashvili, president of Insigma Group, a Moscow-based construction company, Igor Lazhevsk, Deutche Bank’s deputy chairman for Eastern Europe, Anzhelika Anshakova, a board of director of Binbank, Eriskhan Kurazov, General Director at CJSC, a Moscow-based finance group, and Anton Smetanin, a lawyer who has served on the board of the Bank of Moscow.

The Cyprus Mail has learned that during their first meeting on Wednesday, the Russian directors had asked to see the lender’s non-performing loans (NPL). BoC is plagued by NPLs worth hundreds of millions belonging to big developers and the board will soon have to deal with the matter. On the plus side, observers suggested yesterday that the old regime that is responsible for the mess has mostly gone.

The board is made up of people with a personalstake in the bank whose survival would enable them to recoup what they lost and possibly more. Of course it will be an uphill battle considering the fact that the island’s economy is in freefall. The President of the European Parliament said Cyprus was brought to its knees by the terms of the bailout decided by the Eurogroup in March. “Small and medium businesses and private individuals have no access to loans at the moment. Thus investment in the country is not possible unless they come from outside,” Martin Schulz told reporters. The EU official said this was catastrophic as it led to the economy coming to a complete halt. “We must talk with the European Investment Bank because I do not thing there is any other country that needs investment so much as Cyprus,” he said.

Source: Cyprus Mail