In a statement on Monday, Hellenic confirmed the chief executive’s rumoured exit, effective immediately, and said it had commissioned a recruitment firm – perhaps tellingly, an “international” one – to assist in recruiting a suitable replacement.

“Hellenic Bank announces that, following mutual decision and consent, Mr Makis Keravnos leaves the bank on September 1, 2014, where he held the position of group chief executive officer over the past nine years,” the bank said. “The board is in the process of identifying suitable candidates for the position of chief executive officer, in collaboration with international house Heidrick & Struggles.”

Addressing the bank’s staff in a letter on Monday, Keravnos also announced his departure and claimed his decision had been made independently of rumours that the bank’s new foreign owners planned to replace him when his contract expired, in August 2015.

“I extend my warmest gratitude to the new board and to shareholders both new and old, for the confidence they have shown in offering to renew my contract,” Keravnos said. “However, I explained my prior decision to decline any further extension of my contract.”

Keravnos went on to cite the upcoming challenges the bank will be facing in the near future as the main reason behind his resignation.

“Our bank, due to the on going developments and challenges to the economy and particularly the banking sector, including the stress tests, the single supervisory mechanism, and the new bills under discussion, is entering a new period of restructuring and revisiting its medium-term and long-term strategic planning,” he said.

“For this phase, which has already begun, due to my decision I cannot be present. New leadership must take over immediately, so that it can immerse itself in addressing these challenges from the beginning.

“That is why, aiming at easing this important task of strategic restructuring and the transition process, we have jointly decided with the board to part ways amiably.”

Speaking on state TV later on Monday, Hellenic’s board chairwoman Irena Georgiadou confirmed Keravnos’ version of events and said the bank is close to identifying his replacement.

“Keravnos had informed the board in early May 2014 of his intention to step down, and asked that the process to select a suitable replacement be initiated immediately,” she said. “This process was started early in the summer, and although we are not in a position to announce the new CEO, we are in a very advanced stage.”

Georgiadou said she considered this time a “window of opportunity” for the bank to grow, and that its prospects were very favourable.

“We consider this a large window of opportunity for the bank to develop in the right way and help the Cyprus economy recover,” she said. “Hellenic Bank is the best bank in Cyprus with regard to loss provisions, and it has significant liquidity which we are looking for ways to funnel into the Cyprus economy.”

Talk of Hellenic’s chief resigning had appeared in the local press for days, culminating in remarks by Archbishop Chrysostomos on Sunday, in which he all but confirmed as much. The Cyprus Church, once Hellenic’s majority shareholder, maintains a smaller stake in the lender, which is now effectively, controlled by American hedge fund Third Point and computer-game designer Wargaming. The two international investors jointly own 45% of the bank’s equity.
 Asked whether Keravnos was being forced out, Chrysostomos opted to remain cryptic.

“Those who have the majority wish to exercise it,” he said.

Commenting on the fact that developments at Hellenic appear to follow a trend pervading the Cypriot banking system, whereby traditionally Cypriot banks have been bought by foreign interests, he said that it was the “incompetence of many” that led things to this point.

He claimed that during his eight years at the helm of the Cyprus church he has worked hard for the two banks – Bank of Cyprus and Hellenic Bank – to remain in Cypriot hands, citing the Cyprus problem as the reason.

“Unfortunately, many failed to foresee the seriousness of ownership in the banking system and the usefulness of Cypriot banks, and allowed things to deteriorate to this point,” he said. “If I had been against [former Laiki Bank’s strongman] Vgenopoulos and (Piraeus Bank boss) Sallas when they wanted to take over Cypriot banks, it was because there remains an unresolved national problem and Cypriot banks are a necessity, now more than ever.”

Chrysostomos also argued that the difference between local and foreignbank ownership was that local investors focused on helping the Cypriot people, instead of making a profit.

“The difference between us, once majority shareholders in Hellenic Bank, with the current foreign ownership, is this: we tried to serve our people and did not labour for profits,” he said.

The Archbishop expressed certainty that once the bank’s share rebounds in value, foreign investors will liquidate their investments and leave.

Source: Cyprus Mail