She was briefing lawmakers on the overall state of play in the financial sector.
Shortly after the March 2013 financial meltdown, media reports surfaced claiming Cyprus planned to dispose most of its gold holdings in order to help pay down an international bailout.
Reports at the time said Cyprus had agreed to sell just over 10 tonnes of the yellow metal of the 13.9 metric tonnes held by the central bank, in a transaction that would have fetched some€400 million.
CBC officials later denied the reports.
According to the latest data – October 2016 – the central bank holds 13.9 tonnes of gold reserves, valued at €519.5 million.
Briefing legislators at the House ethics committee, Georghadji spoke of an “encouraging” reduction in non-performing loans (NPLs) held by Bank of Cyprus, the island’s biggest lender.
Still, NPLs remained at high levels and this was a complex issue that cannot be easily or swiftly resolved, she added.
The CBC chief said any further drop in interest on deposits would raise the risk of cash outflows.
Interest on loans was at the lowest level in decades.
On the launch of the first wave of repossessions on delinquent borrowers, Georghadji said the CBC was “surprised” at the number of people who were able to repay their debts once faced with the prospect of losing their property.
Defending the banks, she said loan restructuring was proceeding at a slow pace not due of a lack of will, but rather because the banks lacked the necessary staff and know-how.
Georghadji said the CBC, in its capacity as the Resolution Authority, would have no objection to the transfer of the assets of now-defunct Laiki Bank to its creditors.
“Once you vote through a law transferring Laiki’s assets to its creditors, the Resolution Authority will terminate all procedures to sell off the bank’s assets,” she told MPs.
Regarding the sale of ex-Laiki’s branches in Romania, the CBC governor said that the process has suffered a setback, due to the other contracting party, but that the setback was “manageable”.
An agreement meanwhile has been reached for divestment of the lender’s branches in Ukraine, and a decision has been made to sell Laiki’s investment firmin Greece.
Bids for buying up Laiki’s subsidiary in Russia capped at €1 million, Georghadji stated, adding that the CBC has sought from Russia’s central bank clarifications for revoking the subsidiary’s licence.
Responding to MPs’ questions, Georghadji said the CBC is actively supporting a broader police investigation into the 2013 financial meltdown.
The CBC has scanned tens of thousands of documents and handed them to authorities.
Source: Cyprus Mail
