(Adds comments by political parties and politicians in the 14th paragraph)
By Stelios Orphanides
The overall amount of lawmakers with non-performing loans at the Bank of Cyprus exceeds €35.3m, a list published by today’s Polities said.
Bank of Cyprus said it prepared the list in order to comply with its obligations towards the central bank in its role as supervisory authority, the lender said today.
“Bank of Cyprus follows to the letter directives of the supervisory authorities and is not in position to take such decisions on its own,” the lender said in an emailed statement today.
The number of overall outstanding amount of the loans of members of the parliament to Cyprus’s largest lender is almost €51.3m, while the total value of collaterals exceeds €47.1m, according to the list.
Central Bank of Cyprus governor Chrystalla Georghadji told lawmakers yesterday at a session of the parliamentary ethics committee that the monetary authority drafted a list of lawmakers with non-performing loans to Bank of Cyprus.
She said the list was put together in the same way United Kingdom does with respect to politically exposed persons.
The chairman of the committee spoke earlier of an attempt by the central bank to blackmail lawmakers via leaks to the press about information of lawmaker debt in arrears.
Stelios Kiliaris, one of the central bank’s executive directors said yesterday he would quit his job citing a rift with governor Georghadji, adding she had told him and other members of the central bank’s board of directors that she had a list with lawmakers who have non-performing loans at Bank of Cyprus.
Georghadji denied Kiliaris’s allegation, including that she had also said law firm Andreas Neocleous & Co. LLC had bribed the deputy attorney general Rikkos Erotokritou.
Bank of Cyprus said that the list was handed over to the central bank, “as Bank of Cyprus ought to do”, adding that the lender was not in position to know more details.
“Personal data management and bank confidentiality are extremely important issues and Bank of Cyprus shares its customers’ disappointment and anger,” the lender said. “”While Bank of Cyprus does not comment on its customers’ accounts, in the case of political leaders included in the list and following communication with them we are in position to say that overall amounts listed as obligations of Averof Neofytou (DISY) and Andros Kyprianou (AKEL), include obligations related to their respective parties. Something similar applies in the case of Nicos Katsourides,” a lawmaker of AKEL.
“We are expressing our deep concern for the inconvenience and uncertainty caused at an institutional level, at a time in which the banking system and the economy in general, following their stabilisation, have entered a recovery course,” Bank of Cyprus said.
Economic recovery should not be jeopardised while supervisory stability has to be maintained “one way or another,” the lender said in its statement.
Several parties and politicians issued statements in reaction to the leak of the list, either denying that their loans are not performing or offering clarifications.
DISY chairman Neofytou said that the Bank of Cyprus press release “clarified completely the issue caused by the leak”.
“When uproar and leaks aim at serving other purposes than transparency, they cause damage to the economy, the financial sector and the country’s credibility,” Neofytou said. “The country wants and the society demands that key people for the country’s financial system and economy act more responsibly and seriously”.
Andros Kyprianou, secretary general of AKEL, said he will take legal actions against all those who included and leaked his name “in lists with non-performing loans”.
“The truth is that I do have loans,” Kyprianou said in statement adding that neither the preparation nor the publication of such a list could prevent AKEL from demanding justice.
“If Hourican or anyone else believes that we could change our political position on foreclosures or other issues with such practices, is completely wrong,” Kyprianou said referring to John Hourican, chief executive officer of Bank of Cyprus.
Hourican came under attack by political parties in early February after comments he made in an internal email leaked to the press in which he criticised the “bemusing politicisation of the insolvency law”. Lawmakers suspended in December the implementation of the foreclosure law citing the government’s delay in submitting a legislative framework on insolvencies, which prompted Cyprus’s international creditors to freeze bailout funds.
Kyprianou added that he instructed an accounting office to prepare a list of his family assets and financial obligations which he will give to the public.
DIKO said that lawmakers of its faction will “immediately” submit to the House president statements with the non-performing loans and financial obligations
“Getting a loan either in the case of a member of the parliament or any other person, is not wrong,” DIKO said in a statement. “What is wrong, is when a deputy’s personal interest determine his voting behaviour,” as well when deputies use their office to get a better treatment from the banking system.