Bank of Cyprus boss resigns over euro crisis

City A.M. Reporter
THE CHIEF executive of Cyprus’s largest lender, Bank of Cyprus, resigned yesterday, citing a lack of coordination in dealing with Europe’s banking crisis.

Andreas Eliades was chief executive officer for eight years and instrumental in leading the bank’s foray into Greece, where the lender is now heavily exposed to its debt mountain. He said he was leaving with immediate effect.

Bank of Cyprus rattled domestic markets by unexpectedly seeking state financial support just prior to a regulatory deadline to bolster its core Tier 1 capital last month.

Capital requirements of the island’s second-largest lender, Popular Bank was a key reason forcing Cyprus into requesting an international bailout on 25 June.

Both banks suffered record 2011 losses as a result of a writedown in their portfolios of Greek sovereign debt, an impairment agreed by European leaders, including Cyprus's president, to make Greece’s debt more sustainable. The decision proved costly for the island, the Eurozone’s third-smallest economy.

As a result, Popular Bank required a €1.8bn capital injection from the state, while Bank of Cyprus has asked for €500m. The bank said its board would meet tomorrow to discuss Eliades’s succession.