The chief executive of Bank of Cyprus stepped down resigned

10.07.2012 The head of Bank of Cyprus Andreas Eliades resigned with reference to the combusted European banking crisis and the "lack of coordination in dealing with its solution". Earlier, the Bank of Cyprus asked the government of the republic to make capital injection of 500 million euros. But the Cypriot Government, in turn, recently nationalized Cyprus Popular, asked for the assistance to the EU and Russia to provide financial support for troubled banks of Cyprus, especially for the Bank of Cyprus, who became a victim of the debt crisis in Greece. Russia is ready to give Cyprus a loan of 5 million euros, if the EU approves the package of measures to rescue the banking system in Cyprus. The question of financial aid will be discussed only at the EU summit in September, but on the opinion of Andreas Eliades there is delaying the decision of this problem: "The challenges we are experiencing throughout Europe are exceptionally difficult, and demand immediate joint mobilization by all, inside and out of the bank. However this mobilization does not happen".

Lack of immediate actions by the EU was the cause of resignation of Andreas Eliades, who managed the Bank of Cyprus for 8 years. The decision on the resignation took effect immediately, and the meeting of the Board of Directors of Bank of Cyprus which will discuss the name of the new chief executive is appointed on 12th of July, 2012.

Expert’s opinion

The Cyprus banking system is at the peak.

So rapid retirements, as happened with A.Eliadesom aren’t without consequences.

"... Citing a lack of coordination in dealing with Europe's banking crisis" - the reason for leaving: the banking crisis.

The problems of the bank are not just problems in the eurozone. There was a policy of action in the bank and Eliades, who worked there since 1980, is a direct participant in all events. And the last 8 years he was been the chief officer who influenced and determined policy of the bank. The bank under his management entered into a financial crisis of 2008.

It is unlikely, that the Board of Directors appoints a new manager and that’s all; the successor will have a lot of questions to the predecessor.

If we compare the Baltic banks with the banks of Cyprus (the latter has always had a high rating by clients), we will be surprised to find that the Cypriots are suffering losses, and Balts have a profit.

Compare: the losses of Bank of Cyprus for 2011 totaled 1.37 billion euros and operating profit ABLV Bank in the same 2011 amounted to 27.18 million euros (19.1 million lats). It is clear, that the sizes of banks are different. But still!

Eliades and Bernice came in 2008 year quite different and the work of banks under their control speaks for itself.

The news of Eliades’ resignation, definitely cause an outflow of capital from the bank and transferring clients to other banks.

It makes sense to consider those banks that have rid of the Greek securities and securities of other countries, that asked for assistance of the European Union.

We know these banks. They exist.

Save your money, as always, the fastest and most prudent. "

On the basis: http://ru.reuters.com

Lomakin Yaroslav ( Managing Partner of Honest & Bright Company Ltd)