George Appios Managing Director and CEO 20 th March 2015 Developments in the Banking Sector.
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Transcript of George Appios Managing Director and CEO 20 th March 2015 Developments in the Banking Sector.
George AppiosManaging Director and CEO
20th March 2015
Developments in the Banking Sector
20/3/2015 2
The Day of Reckoning for Cyprus Banking System • Government Over-Spending• Public Over-Borrowing• Banks Over-Lending• Under-Regulated
15th March 2013
• Bail-in of Biggest Bank • Resolution of 2nd Biggest Bank• State Aid of 3rd Biggest Bank/Coop• System in Shambles & Capital Controls
BEFORE
AFTER
Banking System effects – Loans and Deposits
20/3/2015 3
€72.5 bln
€61.6 bln
€70.2 bln
€46.1 bln
Dec 2012L/D 103%
Dec 2014L/D 134%
Deposits Loans
20/3/2015 4
• We Had to Rebuild. • We Had the Technology. • We Had the Capability.• We Had to Make the Banking System:
Better Stronger More Reliable
After the Initial Shock
Banking System – Regulatory Changes
• New Definition of NPLs and Provisioning Procedures
20/3/2015 5
Major New Central Bank Directives
• Stricter Anti-Money Laundering Directive
• Arrears Management (Code of Conduct with Clients)
• Restructuring and Loan Origination Rules
• Corporate Governance and Board Members Qualifications
• More Demanding Capital Requirements (CRD4 and CRR)
• ECB Single Supervisory Mechanism
Banking System – Regulatory Changes
• Transparency – Credit Bureaus (Artemis & Aeantas)
20/3/2015 6
Major New Legislative Changes
• Bankruptcy and Guarantor Protection
• Liquidations, Insolvency, Examinership, Administration
• Personal Payment Schemes, Debt Relief Orders
• Establishment of Banking Ombudsman
• Control of Loan Interest Rates and Bank Abusive Actions
• Directives gradually lifting all Capital Controls
Banking System – Issues to be managed
20/3/2015 7
• High Non-Performing Loan Ratios
• Relatively Low Provision Coverage Ratio
• Relatively High Security Coverage Ratios
• Declining Property Values Lead to More Bad Debt Provisioning
• Higher Provisions Lead to More Capital Requirements
20/3/2015 8
Property Drop in Value Historic Index Movement
Jun 15
?
20/3/2015 9
Thank you
спасибо