Shareholders in Bank of Cyprus Pcl, the lender forced to seize deposits as part of the nation’s financial rescue this year, elected a new board, giving sizable representation to Russian investors.
Christis Hassapis, a professor of economics at the University of Cyprus, was named chairman and Vladimir Strzhalkovsky, the former chief executive officer of MMC Norilsk Nickel OJSC, was elected as deputy chairman, the Nicosia-based bank said in an e-mailed statement late yesterday. The two were chosen by a new 16-member board at the bank’s first shareholder meeting since June 2012.
Six non-Cypriots were voted onto the board yesterday, reflecting the losses foreign investors, primarily Russians, took in the “bail-in” of savers with more than 100,000 euros ($133,000) at Bank of Cyprus and Cyprus Popular Bank Pcl, the nation’s No. 2 bank. Popular was folded into Bank of Cyprus as part of a 10 billion-euro deal with the euro area and the International Monetary Fund.
Cyprus’s government secured the funds in March in return for measures including a tax on bank deposits demanded by creditors in a bid to shrink the country’s banking industry. The measures have led to the Mediterranean island needing to impose capital controls as it wound down Cyprus Popular.
Bank of Cyprus exited resolution after the central bank approved a deposit levy of 47.5 percent on July 30. That is 10 percentage points more than what was originally taken from uninsured deposits at Cyprus’s biggest lender in April as part of the bailout. Depositors received bank shares in return.
Members of the new board include Igor Lojevsky, a Deutsche Bank AG executive and former head of Deutsche’s Russian unit.
Euro-area finance ministers and the IMF are expected to discuss Cyprus’s first review this month and approval would allow the disbursement of 1.5 billion euros by the European Stability Mechanism and about 86 million euros by the IMF.