New Board for BoC. First reading- some important realizations:
1) The “old guard” is out –at least for the most part. The clique that had arranged monstrous loans to bad loan takers, rolling over, “restructuring” and then hiding the losses doesn’t have the access it used to. The cronyism that brought the bank to this mess, is no longer viable.
2) The board is controlled by the bigger shareholders -people with a personal stake in making sure the bank will survive and perhaps even return to profitability in the future. This is particularly important in view of the aberration of having a General Meeting with no Balance Sheet and no Results. While the biggest fear has been that the bank will show results that are worse than feared (and we feared a pretty nasty picture), the new Board has every reason to manage the situation.
3) The breakup of the bank in to an S&L on the one hand and a mutated AMC on the other, is now looking more hopeful as book cooking will not work without support from the board, and the composition of the Board show little incentive to cook the books.
4) No single “faction” controls the Board to a large enough degree to ensure more of the same cronyism. Big investors are represented in shares that are reasonably close to the amount of equity they control. There is a balance of power.
5) Central Bank, Finance Ministry and SEC (together forming the Resolution Authority) managed to cooperate better than any time since taking over. The new Board doesn’t have a political tint to it and they all agreed to voting for members that (to a large extend) would probably be elected if the Resolution Authority hadn’t used up its 18% in the vote. Politics is now a much weaker factor than before.
6) Some of the more worrying names were left out. This is good.
These are the good news- the bad news is that asset quality is still a mess and the bank’s viability is still far from ensured. But at least we now have a team eager to play ball.
Christis Hassapis –Chairman
Vladimir Strzhalkovskiy –Vice Chairman