25/01/2010 06:44
The distortions in the domestic banking system are linked to the institutional ambiguities that govern the supervision of the commercial banks and the Coops, Alpha Bank (Cyprus) CEO, Kostas Kokkinos said. In his interview to StockWatch, Mr. Kokkinos said that the impacts on the domestic system from the absorbance of cheap liquidity from the European Central Bank will not be as expected because the Cooperatives are regulated by another authority and they do not follow the same competition rules as the banks.
“If the banks follow the directives and rules of the CB and the Coops follow other rules, the results will not be as expected. How will the interest rates drop if not the same rules are followed? Basically, the Coops defy competition”, he said.
In his interview, Mr. Kokkinos said that 2010 will be a difficult year for the economy and the banks because the public finances restrict the government’s ability to use fiscal tools in order to boost growth. He anticipates that credit growth will grow zero in 2010 due to low demand.
Despite the negative macroeconomic conditions, Alpha Bank has low provisions and NPL indices. Analyzing its loan portfolio, Mr. Kokkinos stressed that in retail banking, the bank gave special emphasis to the housing loans, rather than the other banks did, which focused on the consumer loans and the credit cards. “The housing loans are paid more easily because there are connected with the social status of the borrower”, he said.
Mr. Kokkinos also explained that Alpha Bank launched its activities in Cyprus recently (1998) and, in this way, it avoided granting loans to saturated sectors of economy, such as manufacture and the primary sector that face structural problems.
Following the strong credit growth in the past few years, which pushed Alpha Bank up to the 3rd place in loans, Mr. Kokkinos signaled the end of the market shares war among the banks. “We do not care about the market shares any more, we are not after them. At the current stage, we want to bring a good balance between the loans and deposits and be strong and healthy so as to grow when crisis is over and the conditions allow it”, he said.
After eight years in his leading position in the bank, Mr. Kokkinos told StockWatch about the challenges that a non-Cypriot bank faces on the island and the “multiple rules” that people in Cyprus have due to its small size. “Members of the same family have businesses, participate in Boards of state and semi-governmental organizations, and play a role in society, politics etc”, he noted.
As for the prospects of concentration in the banking sector, Mr. Kokkinos said that “too much have been said”. “Something might be done to the benefit of the system”, he concluded.
“If the banks follow the directives and rules of the CB and the Coops follow other rules, the results will not be as expected. How will the interest rates drop if not the same rules are followed? Basically, the Coops defy competition”, he said.
In his interview, Mr. Kokkinos said that 2010 will be a difficult year for the economy and the banks because the public finances restrict the government’s ability to use fiscal tools in order to boost growth. He anticipates that credit growth will grow zero in 2010 due to low demand.
Despite the negative macroeconomic conditions, Alpha Bank has low provisions and NPL indices. Analyzing its loan portfolio, Mr. Kokkinos stressed that in retail banking, the bank gave special emphasis to the housing loans, rather than the other banks did, which focused on the consumer loans and the credit cards. “The housing loans are paid more easily because there are connected with the social status of the borrower”, he said.
Mr. Kokkinos also explained that Alpha Bank launched its activities in Cyprus recently (1998) and, in this way, it avoided granting loans to saturated sectors of economy, such as manufacture and the primary sector that face structural problems.
Following the strong credit growth in the past few years, which pushed Alpha Bank up to the 3rd place in loans, Mr. Kokkinos signaled the end of the market shares war among the banks. “We do not care about the market shares any more, we are not after them. At the current stage, we want to bring a good balance between the loans and deposits and be strong and healthy so as to grow when crisis is over and the conditions allow it”, he said.
After eight years in his leading position in the bank, Mr. Kokkinos told StockWatch about the challenges that a non-Cypriot bank faces on the island and the “multiple rules” that people in Cyprus have due to its small size. “Members of the same family have businesses, participate in Boards of state and semi-governmental organizations, and play a role in society, politics etc”, he noted.
As for the prospects of concentration in the banking sector, Mr. Kokkinos said that “too much have been said”. “Something might be done to the benefit of the system”, he concluded.
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