Russian-speaking entrepreneurs, directors and financiers working in the fields of international and local businesses, is well-known Anthony Harith, head of the International sector of Hellenic Bank.
He is respected not only for the fact that he perfectly knows the specifics of banking and is fluent in Russian. Antonis always attentive to every client and before to express their opinions or to give professional advice, analyzes the situation from all sides. At the end of 2013 the bank, which employs Antonis independently found investors and spent the necessary recapitalization without the intervention of the "troika". For Cypriots and Cypriot banking sector it became one of the most pleasant news in recent months. We talked with Antonis Harith recapitalization Hellenic Bank, Cyprus crisis of 2013 years and the ways of its resolution, and how will Cyprus 2014 year and what measures need to be taken to restore the country's economy.
- Imagine that you are talking with someone who has not had a chance to witness the crisis in Cyprus. How would you describe him exactly what happened in the country in March and what led to such disastrous consequences, what were the causes and what are the mistakes?
- If a foreigner knew of Cyprus as it has been in the recent past, the story of what happened in March, he would certainly have perceived as a joke, so unexpected and unreal it looks from the outside. Indeed, events have taken place here, an unprecedented for the world of practice. For example, confiscation of deposits, a decision on which was taken at the meeting of the Eurogroup, and the subsequent signing of the Memorandum between the Republic of Cyprus and the "troika" of creditors. As is known, the Memorandum provides for the provision of financial assistance in the amount of 10 billion euros, mainly to support the country's banking sector.
Banking system in Cyprus
- It is said that the Cypriot banking system to function correctly, that it was wrongly built. This is true?
- I'll tell you one thing: to 2011 years, banks in Cyprus were profitable. The argument that the size of the banking system is seven times the country's GDP, is absolutely exemplary. There are countries such as the Netherlands, where the banking sector over GDP in 11-13 time, and that's okay. Cyprus has been very reliable and profitable banking system. Suffice it to recall that the three largest banks in due time passed stress tests. By the way, Hellenic Bank alone volunteered to take the test and successfully did it. It was not until May 2012 years.
Confiscation of deposits and bank recapitalization
- Do you think that could be repeated in Europe, for example seizure of deposits in Cyprus?
- I do not think that such a scenario could be repeated. In Europe, realized his mistake and if it will repeat, many banks simply ceased to exist. In the case of Cyprus it is a pure experiment - close one large bank, "hang" the debt of troubled bank to the second largest bank in the country, forcing it to restructure ... perhaps not yet noticeable, not all believe it, but I believe that Bank of Cyprus will stand and will become one of the most successful banks in Cyprus. The main thing now - to restore the confidence of foreign investors in order to encourage the inflow of deposits in Cyprus. Let one of the historic bank in Cyprus is no longer, let the second bank is experiencing difficulties, but the situation is gradually stabilizing. Trust in Cyprus from the international community will be restored, I am sure. And a good example is the Hellenic Bank, who was able to recapitalize part of the foreign funds. So, 30% -owned by US investment company, 20% - Belarusian Wargaming. More 15% acquired fund Cooperative Bank of Cyprus.
- Why co-operative banks to buy shares of another bank?
- It is not the bank itself, and its foundation. The Fund Co-operative Bank was 75 million euros, and they had to be somewhere to invest. And the fund's management has concluded that the most profitable to date in Cyprus will be investing in a successful bank.
Rebuilding a country
- In your opinion, what should be done as soon as possible to restore confidence in the banking system and to Cyprus as a whole?
- Of course, before Cyprus is now facing a number of serious problems. For example, unemployment. According to forecasts, 2014, this figure will rise to 21%, ie one fifth of the country is unemployed. The second problem - a large number of non-performing loans. In large banks are about 40-45%, it is too much. It is clear that at this level of unemployment, many people have no means to repay the loan; no money, and therefore, the market is not moving. But, as you know, banks can not simply write off these loans. We need to do the revision of the conditions to make some concessions, and by all means try to reduce the amount of problem loans.
- Are there any practical ways to reduce this figure in 40-45%
- I can give you a specific example. For example, if the customer pays on time, he will receive a discount. If it is overdue, it imposed certain penalty. ... Or for every two unpaid premium client repays the loan contribution from the bank. In fact, it is necessary to develop and carefully analyze the various incentive schemes debtors. It is necessary to attract and experts to help find an acceptable solution. However, by and large, in the first place, we should resolve issues related to the extraction of natural gas: look for new partners. We must come to grips with the project of building a terminal for liquefied natural gas.
- And if the gas terminal will not be enough?
- I just believe the opposite, though not an expert in this field. In our exclusive economic zone 12 areas, and in my opinion, the total amount of gas produced will be enough to a large-scale project as the construction of the terminal, turned out to be economically viable. However, in order to make a profit in this area, you need to spend a lot of preparatory work. In 2014 year just need to move in this direction.
- If you are currently heading the Cypriot state, which would have taken three steps in the first place?
- Firstly, I would have made every effort to speed up the process to prepare for the production and transportation of gas. In addition, I would actively attract foreign investors. We have good relations with Russia and other former Soviet republics. It is no secret that the Cyprus economy is largely dependent on tourism. But, for example, the sector of medical tourism is still underdeveloped. And as there are unusual ways to attract tourists - open, for example, Crocodile Park! There are investors who are ready to invest in such a project. Another interesting move - the construction of a dolphinarium. Why not? We need to create favorable conditions for investment. Can be very promising and sports tourism. Just imagine, in the early 1990-ies came to Cyprus in the winter to train 40-ka sports teams from Russia.
- And then what happened? They realized that it is expensive?
- Not only that. They just saw that we have a well-developed infrastructure for sport tourism (quality stadiums, for example). We need to create a sports village following the example of other countries.
- And how do you feel about the idea of a casino in Cyprus?
- I support this idea and supports the construction of a resort-style casinos, which will provide customers with a wide range of services. It is well known that a large number of foreigners visiting Cyprus with a view to play a few days at the casino in the occupied part of the island. Because there they are given the opportunity! Why not make these tourists were to play in our territory? In addition, I support the construction of marinas in all regions, not only in Limassol.
- In your opinion, as the transfer of the seaports to private hands will affect the efficiency of the port sector in Cyprus?
- Of course, the efficiency will increase. We also need to consider making the ports, not only trade, but also tourism. For example, you can attract various foreign companies, which will make our ports of cruises like the Mediterranean and beyond.
Projections for the year 2014
- At the end of the conversation I would like to hear your forecast for the coming year. What happens 2014 year?
- Obviously, 2014 year will be even more difficult 2013-th. Unemployment. The crisis in the construction industry. Non-simple recovery of the banking system. Do not expect that Cyprus will soon again be what it was before March 2013 years.
The only positive thing: now there is a price correction. I believe that, for example, the price of the Cyprus real estate before the March events were too high. Now acquire real estate on the island would be much easier to both foreigners and residents of Cyprus. Finally once again stress the need to make every effort to attract foreign investors in various spheres and on the development of the gas sector.
Certainly, the country has good prospects. They have not disappeared. Just change the terms that will be required for the implementation of these prospects. Abroad we are not yet fully understand what is the real situation in Cyprus and how much it has improved compared to March 2013 years. Therefore, in the coming months 12 efforts should be made at all levels in order to face all the difficulties that I have just described.
History shows that people of Cyprus do not just have a critical situation. 40 years ago, we were able to rebuild the country and to create one of the leading financial centers. We now manage. Only need to understand that it takes a lot of time and patience.