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Govt.’s measures need time, HB CEO says
February 16, 2009
Hellenic Bank CEO, Makis Keravnos said that the government’s measures for the strengthening of the island’s economy will need time to be adopted. In his interview to StockWatch, Mr. Keravnos referred to the “delayed” additional measures and expressed his view that certain big projects such as the marinas and the golf courts will not be constructed due to the lower demand for villas. The CEO also expressed his grief for the fact that Cyprus is going back to the period of consecutive deficits.

Former Finance Minister and current banker also talked about the fast credit growth in 2008 and stressed that the problems with the bank liquidity could have been foreseen. Mr. Keravnos noted that further measures must be taken by the competent authorities to soothe the money market and insisted that the only measures that were taken towards this direction are from the banks themselves. Mr. Keravnos expressed his doubt on the practical implementation of certain measures, such as the loan of €300 million by the European Investment Bank. “It will take time for the money to be granted to the SMEs”, he said.

In his interview to StockWatch, the CEO also defended the conservative lending policy that Hellenic Bank followed in 2008 and the loss of 1% in the market share that it suffered. “We were right to foresee the crisis in the market, especially to those of the foreign property buyers, and we were right to restrict the loans to the British to 5% against 40% that the other banks have”, he emphasized.

Mr. Keravnos said that Hellenic Bank’s results for 2008 will deteriorate.

In the first nine months of the year, the bank enjoyed profits of €66 million. For the full year it expects profits of €60 million. Its pre-tax profits in 2007 had reached €153 million.

Mr. Keravnos believes that the lower results have to do with the connection of the Cypriot lending rates to those of the European Central Bank as well as the strong competition in the deposit rates. “According to the new data, the bank’s budgets for 2009 will not fly high”.

In his interview, the CEO said that the conditions will not change immediately. “In Greece, the Hellenic Bank showed losses of €11.3 million and continues to suffer losses despite the efforts for the improvement of its activities.

On the other hand, the bank bets on the Russian market, where it has strengthened its presence lately. “In the next few days, the Russian regulatory authorities will approve the bank’s operation in Russia”, he stated.

HB CEO, finally, referred to the course of the property sector, stressing that prices will return to rational levels. (source: Stockwatch, Cyprus)
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