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Bank of Cyprus CEO: Banks better placed to face Covid-19

09/10/2020 09:34

Panicos Nicolaou, CEO of the Bank of Cyprus, the island’s largest lender assured that Cypriot banks will support the economy and economic activity, severely hit by the Covid-19 pandemic, stressing that the island’s banking sector is better placed to face the current downturn.

Addressing the 4th Business Leaders Summit, Nicolaou said that businesses and the state alike should prepare for future technological changes “which are coming faster than we anticipated.”

On the banking sector, Nicolaou acknowledged that the Cypriot banks are facing challenges mainly concerning low profitability due to reduced interest margins and high operating costs, problems that are common for all banks in the EU.

“Compared with the 2013 crisis, the great difference this time around is that we started from a much better starting point both in terms of liquidity and capital adequacy, which allows to absorb the shock and to support economic recovery. Without banks there can be no healthy economy, low unemployment and recovery,” he said.

Noting that the Cypriot banks have fixed their balance sheets to a large extend, Nicolaou said private debt, ie corporate loans and loans to households amounted to €23.7 billion or 116% of Cyprus’ GDP in the end of June 2020 compared with €48.5 billion or 250% of GDP in December 2012.

He said that “is very important to put an end with non-performing loans of the past crisis and to prevent new NPLS from the covid-19 crisis.”

“We should support consistent borrowers and depositors and not strategic defaulters and other savvy persons who learned to live at the expense of the others,” he said adding that maintaining a high standard of living cannot be achieved via unchecked borrowing or by a delinquent culture simply for some to continue their lifestyle by exploiting slow procedures and the complex legal system.”