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Thursday 6th August 2020
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Hourican calls for change in the law

BANK of Cyprus CEO John Hourican said on Wednesday, that non-performing loans are stabilising.

Hourican, who was addressing a conference in Nicosia on the future of asset management in Cyprus and Greece, assured that the Bank is more aggressive in pursuing the ‘high end’ borrowers and compassionate when it comes to ‘lower end’ borrowers, stressing however the need to amend current legislation on the matter.

He further highlighted the need for confidence to return to Cyprus’ banking sector.

“The Bank is delivering, the Bank is making progress”, he assured, adding that “we are announcing each step of that progress as we go”.

What I need everyone in Cyprus to do, Hourican pointed out “is to begin to give us some wind to our sails to ensure that we can continue to make that progress”.

Replying to a question on non-performing loans (NPLs) he said that “we are pursuing all of our non-performing loans with the decree of vigour that we are allowed under the regulation that we found ourselves and the loans we have available to be executed”.

He continued saying that “we are being compassionate in the lower end of our lending space and we are being aggressive at the more higher ends”.

“If we find a viable business we would like to see that viable business can survive and we make any restructuring to ensure that people stay employed”, he stressed.

On the other hand he added that “if we find a non-viable business we proceed to execute collateral that covers our loans”.

Hourican went on to say that “there are results”. If you see the statistics overall, he explained, “you will see that the non-performing loans are stabilised and it is our intention to continue to try and drive an improvement in that position”.

At the same time Hourican dismissed the notion that “nothing is happening”.

It is the case, he said, “that we are having to work one by one in the confines of the legal system of Cyprus, which is very poor”.

“We do want and we do need a change in the law to help us improve the position on NPLs, and that is not to say that we are not placing ourselves as close to the law and doing everything we can on every individual in trying to recover those loans”, he noted.

Replying to another question he said that there are “a lot of things that have to come right in order the Bank to generate capital, generate returns to investors”.

He spoke of the need “to have confidence in the system as a whole”. Banking, he pointed out, “is about confidence”. Cyprus, he stressed, “needs to return to having confidence in its banking system”.

At the same time he reiterated that BoC is “making good progress”, noting that “we have a clear repatriation of overseas capital agenda going on”.

Cyprus received in March 2013 a €10 billion bailout from the EU and the IMF to avert the meltdown of the island’s oversized banking system. However, following the bailout non-performing loans soared reaching €26 billion. Debt restructuring is considered by Cyprus’ lenders as an important element in the success of the island’s financial adjustment programme.

– Cyprus News Agency


  1. @ Martyn G

    Not even an acknowledgement.

    Perhaps we should all write similar letters. After all they (BOC) speak of a new era of honesty and integrity and in a recent interview Hourican’s new side kick, whose name escapes me, demands what is rightfully theirs (BOC’s), interest payments or debt clearance.

    Why therefore should BOC deny title deeds to those who have been duped to buying mortgaged properties?

  2. The core, the rotten core, of the Cyprus legal, banking and regulatory systems, and the now massive lack of confidence in them since March last year will not respond, here in Cyprus or, importantly, internationally until more of the corrupt practices are a) defined and b) acted upon, c) remedied.

    Hourican to his credit is slowly peeling back the multiple layers of the underlying and overlapping problems and, gently it seems, so far, is pointing his personal and organisational fingers towards some of the ‘trouble spots’ – including we should hope the weak and probably corrupt? ‘corporate governance’ which seems, particularly, to have been lacking.

    He has taken on leadership of a bank in Crisis, for which he is presumably being well paid/rewarded, and one of his major tasks will be to break down some of the enormous cultural barriers that Petros Florides has identified as the Cyprus’ Seven Deadly Sins

    cronyism, tokenism, short-termism, populism, scape-goatism, client-ism and tribalism

    But with the ECB about to embark upon another round of ‘tightening the screws’, especially on small Eurozone banks, (which even the enlarged BoC, undoubtedly is):

    ‘The intervention comes as Europe braces for the findings of the ECB’s asset quality review into the health of eurozone banks. It is expected to force dozens of lenders to raise more capital’ Sunday Times, 1st June

    we can only ‘hold our breath’ and see what Miracles- or further ‘rabbits out of the proverbial ‘hats’ – Hourican and his fledgling new Board – with further support from the Troika? – can produce to start seriously tackling these ingrained constraining factors. It’s a big, Big task and likely to take a long, long time – so we can only hope early remedial progress can be made by Hourican, by the Cyprus government to pull BoC ‘back from the brink.

    @AndyP: it was an excellent letter, too detailed and penetrating probably to get a reply: presumably you didn’t even get an Acknowledgement?

  3. Compassionate to lower end borrowers.

    What a joke.

    They have put my interest rate up to 14%.

    My partner made redundant and after phoning them 4 times I have been left to hang out to dry. No offer of help.

  4. Until properties that have been ‘sold’ by developers, that have been paid for in full, or are being bought by serviced mortgages are removed from the developers portfolio and issued with clean title deeds, there will be little confidence in the property market. Loans need to be repaid, this is a principle that should be taught in all Cypriot schools, and failure to do so will mean the property or other collateral will be seized. Laws must protect the innocent and punish the guilty, a idea that seems alien to this country.

  5. In an alternate but parallel universe, the CEO of Bank of Alashiya, Mr Jack Howhecan, in a hard-hitting statement curiously devoid – for obvious reasons – of any concrete or tangible evidence of anything happening, stressed his commitment to pursuing the issue of Non Performing Loans in the Alashiya banking sector.

    “What we need, in order to: repatriate funds to Alashiya; get the big boys at the higher end to service their debt or if not, then seize their collateral, is for the principal beneficiaries and instigators of the current laws to change them in our favour and to their detriment”.

    When approached for their views on the above, during a rather sumptuous fish meze luncheon, representatives of the Cyprus Bar Association were not able to comment as they were laughing too much.

  6. For your info Nigel, Hourican has never replied to my letter which was also sent by post to him on 28 December 2013.

  7. One of the many headaches for Hourican and others is the potential flood of legal action. Some who have paid for their property in full will challenge it being taken back to pay the debts of others. Some who have walked away from their loans or who simply refuse to pay will challenge any legal action against them because they will believe the loan was mis-sold due to the corrupt procedures in place which means they do not own what they thought they had bought!

    It is now public knowledge that loans were given to developers who had not serviced their original debts and that those same lenders lent to unsuspecting ‘buyers’. I use the term buyer loosely as the buyer thought they were buying a property (not a debt) which at the end of the term would result in them owning a property (not just the privilege of paying a loan plus interest for years). I had to repeat that as I still can’t believe this is acceptable, even in Cyprus and certainly not in the EU.

  8. Hourican has demonstrated that he can read and stay awake, which is a good start.
    For instance, he has noticed that “the legal system of Cyprus is very poor”.
    However, he is wrong when he “stresses” that “Cyprus must return to confidence in its banking system”.
    It is foreign investors who must return to confidence in both the banking and legal systems of Cyprus before anything much happens.

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