george appios managing director and ceo 20 th march 2015 developments in the banking sector
TRANSCRIPT
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