MICHALIS Sarris, chairman of troubled state-controlled Popular Bank resigned from his post yesterday following pressure from the Central Bank.
Sarris was replaced by board member Andreas Phillipou, who had spent years in banking supervision at the Central Bank.
In a written statement issued after the board meeting, Sarris said he resigned at the behest of the Central Bank but did not wish to comment further.
“Recently, the Central Bank Governor verbally expressed his desire that I depart, noting that this was also the position of the government,” Sarris said. “Since this is the wish of the regulator and main shareholder of the bank … then certainly I will respect it. I believe that this is not the right moment for further comments.”
Sarris was appointed in early 2012 to oversee the bank's recapitalisation drive – a difficult task after the heavy losses suffered by the bank due to its huge exposure to Greek debt.
Sarris said he had assumed the post “at a difficult time for the bank” following an invitation from the shareholders and the inducement of the authorities.
“I am only sorry that this development would not allow me to continue to provide my services to our country from this position during a difficult period for our future, which was the only reasons I accepted this position,” Sarris said.
Popular’s failure to come up with the necessary capital forced the lender to seek state assistance in late June.
Cyprus, which has been shut out of international capital markets for more than a year, had to seek a bailout to meet its €1.8 billion obligation to the bank.
Sarris’ departure had been rumoured for some time, mainly because of his frequent comments on fiscal slippage being partly to blame for Cyprus’ present predicament.
Sarris had served as finance minister under the previous administration, successfully ushering the island into the eurozone.
His name had been mooted in August last year to replace Charilaos Stavrakis, but his demand to have free reign over the economy apparently did not sit well with the administration.
He was also close with former Central Bank governor Athanasios Orphanides, whose term was not renewed when it expired in early May.
Orphanides has accused authorities of fiscal profligacy, which he blamed for Cyprus economic troubles, saying problems could have been averted had the state heeded his warnings sooner.
The government however, blames Orphanides for the banks’ exposure to Greece that led to the current troubles.
Sarris’ ouster followed the resignation of Bank of Cyprus CEO Andreas Eliades early in July, citing a lack of coordination in dealing with Europe's banking crisis as his reason for leaving.
Bank of Cyprus, the island’s biggest lender, rattled domestic markets by unexpectedly seeking €500 million in state support just prior to a regulatory deadline to bolster its core tier 1 capital last month.