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A public opinion poll conducted this week poses the ‘taboo’ question if Cyprus banks (and by extension Cypriot companies) should be foreign managed.
Quite probably, the issue at hand is the departure in September of the Bank of Cyprus ‘rescue CEO’ John Hourican, who was brought in soon after the 2013 financial crisis and, at gunpoint, told to save the island’s largest systemic bank.
Although we must admit that Hourican has done a good job in restructuring the bank, merging it with toxic Laiki and getting rid of unwanted assets, he never managed to get around the attitude of bank employees, and Cypriots in general.
At first, he tried to pick a fight with MPs, telling them that essentially, they were to blame for delaying legislation that would help resolve the NPL saga and get these bad loans and unsecured mortgages off the banks’ backs.
Little did he know at the time that Cypriot politicians have a mule’s stubbornness and rhinoceros-like thick skin, which is why we are still debating the merits of the laws that secure the first home and a civilised resolution of the non-performing loans.
He then tried to get the island’s biggest crooks, those who owed millions, hundreds of millions even, in unpaid loans to restart paying their debt to the bank, which was in desperate need of cash to pay down its bailout.
Hourican managed, thanks to some creative manoeuvres, to completely pay off the emergency liquidity assistance (ELA), delist it from the Athens bourse and re-list it as a revamped Irish-structured bank on the London Stock Exchange, where the stock price has been lingering at around 1.30-1.40 euros, about a third from where it was two years ago.
The bank is now more streamlined, on the way to returning to profitability and struggling to adopt novel technologies in order to rid itself of the often clueless and unfriendly staff, who will remain as a deadweight on the bank’s payroll, hence expenses.
So, has Hourican failed? Quite the contrary, he has achieved what no Cypriot could even dream of and has worked tirelessly to get his job done, without the burdens of political and social ties to any group.
Cyprus has in recent years seen a growing number of foreign chief executives at the helm of high-profile companies who are free from any strings.
And these companies have done well, as there has been no political intervention from a ruling or opposition party, from know-it-all civil servants and other self-appointed saviours of society. More so, they have succeeded because the owners had the vision to hire outside experts to run their company.
Despite the thousands of ‘management’ degrees earned by Cypriots, none of them says how to be a decent boss and an efficient administrator, which is a very rare breed on the island.
Funnily enough, Cypriots who have headed for other shores too have excelled in their field, many of whom have become ‘foreign’ managers in other countries.
Whether or not we should have a foreign chief exec is not the question. Finding the right one is the problem, and if local talent is not available, there’s nothing wrong in bringing in outside expertise. If we can afford it, of course.
