A member of the co-op bank’s board of directors told an inquiry looking into the causes of its failure that while at first the situation at the bank was chaotic and its staff unskilled, it eventually managed to operate as a proper, competitive bank before it went out of business.
At the co-op, “everything was possible,” board member Giorgos Kittos, told the committee on Friday, describing the irregularities.
An unspecified cooperative branch extended a loan to a 90-year-old woman with a 40-year maturity, while others accepted as collateral either overvalued properties or churches and cemeteries, he said.
The bank the government bailed out in 2014 with €1.5bn initially before injecting an additional €175m the following year, did not operate as a bank at first and was under constant supervisory pressure, Kittos said.
The Cyprus Cooperative Bank was forced to sell its operations to Hellenic Bank after it failed to reduce its non-performing loans stock fast enough, which ultimately wiped out its equity.
Kittos, appointed to the board in October 2013, said that he was not aware of a list of written-down loans, submitted to the committee after the finance minister approved it.
He also said that the board’s remuneration committee, of which he was a member, had taken no decision to pay an annual €25,000 fee to Dionysis Dionysiou, a finance ministry official who acted as a liaison between the bank, owned by the government to 99 per cent, and its main shareholder.
The decision to pay him this fee may have been taken elsewhere, likely by Finance Minister Harris Georgiades, he said.
The post Co-op gave loan to 90-year-old, mortgaged cemeteries, probe hears appeared first on Cyprus Mail.
Read more → https://cyprus-mail.com/2018/08/31/co-op-gave-loan-to-90-year-old-mortgaged-cemeteries-probe-hears/
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