Bankers Wanted: Lenders in Athens Struggle to Fill Top Spotsby and
Greek lenders seeking senior executives to join their boards
Hiring staff with international experience is a bailout clause
As if mountains of bad loans and falling shares weren’t enough, Greek banks are having to contend with another headache: finding qualified people for their corporate suites.
The National Bank of Greece is seeking a chairman of the board, a chair for its audit committee, as well as non-executive directors. State-owned Hellenic Financial Stability Fund, the biggest shareholder in both Piraeus Bank and the National Bank of Greece, has extended its deadline for applications for its chief executive officer post originally set for Aug. 25, a person familiar with the matter said. Piraeus Bank has been looking for a CEO since January.
A stringent list of eligibility requirements is making it hard to find candidates and capped salaries and the risk of potential penalties are making the once-attractive positions unappealing. While Greek lenders’ trouble filling top jobs is mirrored at London houses like Standard Chartered Plc and Barclays Plc, their problem is compounded by conditions laid down in the country’s latest bailout agreement on how boards need to be reconstituted.
“Even for those who are currently out of work, the prosecution of the former head of Greece’s statistical authority reinforces concerns that managers at Greek banks may find themselves politically exposed, facing legal liabilities in a dysfunctional system,” said Andreas Koutras, a London-based consultant at Valere Capital.
Greek banks are struggling to contain the fallout from the deepest economic slump since World War II and the biggest sovereign debt restructuring in history. Their shares have dropped more than 40 percent this year, about twice as much as their euro-area peers. In 2015, the market value of Greek lenders was practically wiped out, forcing them to tap investors and taxpayers for capital injections.
Snowed under bad loans totaling over 100 billion euros ($113 billion), the lenders have committed to clean their balance sheets through writeoffs, sales and servicing agreements with distressed-debt managers over the coming years.
Under Greece’s latest bailout agreement, bank boards should have been reconstituted by end-July. Meeting that deadline wasn’t made any easier by auditors representing creditor institutions, which stipulated that anyone who has served in a public-sector post, or has been affiliated with a political party over the past four years -- like National Bank of Greece’s current chairman Louka Katseli -- is disqualified for a bank-board job.
In addition, all board committees’ chairs are required to have at least three years’ experience on a board of an international banking group not operating in the Greek market. “These experts should have no affiliation over the previous 10 years with credit institutions operating in Greece,” the law reads, effectively banning Greek bankers from chairing board committees.
Consequently, Piraeus Bank hasn’t been able to replace Anthimos Thomopoulos, who was forced to resign amid a quarrel between shareholders. Acting-CEO George Poulopoulos said in an interview last month that Greece’s biggest lender hopes to fill the vacancy by end-September. The National Bank of Greece has set the deadline for applications for its vacancies for September 25. Meanwhile, headhunters at Korn Ferry have been entrusted with the task of finding candidates for the Hellenic Financial Stability Fund’s CEO.
“For foreigners, the salaries offered are rather meager, and they know that there’s no concrete story, a narrative to lure them, so no potential upside in leaving their careers,” Koutras said.
Base salaries in Greek banks are capped at the remuneration of the Governor of the Bank of Greece, so long as lenders are under a taxpayer-funded financial backstop. The most recent available data from bank filings show that total compensation for bank directors ranged between about 200,000 euros and 390,000 euros per year.
So, the only thing going for those jobs may be the sunny weather in Athens.