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How Bank of Cyprus came back from its bail-in to listing in London | World Finance - YouTube
Channel: World Finance Videos
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World Finance: In January 2017, Bank of Cyprus
Holdings was listed on the London Stock Exchange.
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It's the latest milestone on its path back
to strength, since the Cypriot financial crisis
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and a €10bn bailout in 2013.
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In those four years the bank has made stunning
progress in restructuring its risk, improving
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capital adequacy, and establishing high corporate
governance standards.
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Compliance director Marios Skandalis joins
me now.
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What was Bank of Cyprus' position in 2013,
and how far have you come?
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Marios Skandalis: Well, following the events
of 2013, when the economy went through a bailout
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with the Troika, the banking sector had to
go through a major remediation.
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Bank of Cyprus had its depositors receiving
a more than 50 percent haircut of their deposits.
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Bank of Cyprus also absorbed all assets and
liabilities of the second-largest bank shutting
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down, including €11.4bn of emergency liquidity
assistance.
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So you can understand it was a chaotic situation.
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However, in 2014 we had a successful capital
injection from private investors of €1bn.
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That same year we had a successful comprehensive
assessment by the European Central Bank.
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But it was 2017 that has been the hallmark
of this rebirth and remediation of Bank of Cyprus.
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In February we had been successfully admitted
to the London Stock Exchange, and a successful
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issuance of €250m tier two capital notes.
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World Finance: How significant has your compliance
function been in keeping the bank on a positive course?
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Marios Skandalis: The compliance function
was the function that has undergone the most
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heavy and major remediation in the bank.
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Given the direction by the board of directors
that rather than just adhere to the regulatory
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framework in place in Cyprus, but applying,
adopting, and adapting to best international
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practices and procedures; that meant simply
for us a complete cultural transformation
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of our function.
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In doing so, we took a holistic view, and
we applied six strategic pillars in fully
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remediating the function: being reviewing
the overall restructuring and organisational
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structure of the compliance function, enhancing
our monitoring activities, enhancing our assurance
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activities, enhancing the awareness and training
competency of the staff, and establishing
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new transparent channels of communication
with our regulators and competent authorities.
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World Finance: Tell me more about the corporate
governance standards that the bank has embraced.
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Marios Skandalis: Corporate governance is a core aspect of the new compliance function of the bank.
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Our listing to the London Stock Exchange is
one example of that.
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Our bank today is the only institution in
Cyprus that is concurrently governed by two
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codes: the Cyprus Stock Exchange code, and
the UK code.
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We operate the corporate governance function
through our corporate governance group policy,
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our group diversity policy, our group nominations
policy, and our group fitness and probity policy.
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Our board undergoes an annual internal review
of its composition and functioning, and also
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a triennial assessment by an external consultant.
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This blend of procedures that we have applied
– and of course, having the London Stock
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Exchange and the Cyprus Stock Exchange monitoring
our corporate governance function – sets
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our bank as a benchmark among the best well-governed
institutions in Europe.
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World Finance: Being listed on the London
Stock Exchange does give you a greater international
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profile; what are you hoping to achieve with
this?
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Marios Skandalis: Being listed and traded
on one of the most mature and reputable stock
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exchanges in Europe not only enhances the
liquidity of the trading of the shares, but
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at the same time it ensures that the fundamentals
of our organisation reflects on the price
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of our shares.
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It gives us the credibility towards our internal
and primarily external stakeholders, like
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our investors primarily, and our customers.
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For more about Bank of Cyprus’ compliance
transformation, including its financial crime
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clean-up campaign and its approach to digitisation,
click through to watch the second half of this interview.
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