Cyprus: Hourican looks to calm Cypriot storm
The new chief executive of Bank of Cyprus faces challenges on a scale that perhaps dwarf those he faced when restructuring the investment bank at RBS. Compelled to deal promptly with mounting bad debts, he also has to cope with the local reputational aftermath of the bank’s EU-imposed bail-in. Will his diet of “hard work and heavy lifting” see the bank through its crisis?
If bail-ins are to become the new model for rescuing banks, John Patric Hourican might become a critical actor. The former RBS senior banker has been charged by the international authorities with turning around crisis-stricken Bank of Cyprus, the Mediterranean island’s biggest bank. The bank has been able to survive only because its depositors were forced to forfeit some of their deposits. As a result of this EU-induced bail-in, the bank is reviled throughout Cyprus and its management has lost the trust of customers. Hourican’s job is not merely to turn around Bank of Cyprus’s dire financials, but also to regain Cypriots’ confidence in their country’s banks. One commentator observed: "The job is a poisoned chalice."
When Hourican arrived at Bank of Cyprus at the end of October, he found tempers frayed. "The institution was demoralized," he says. "As with all cardiac arrests, people had lost their confidence; they felt quite emotional about what had happened, they were looking for someone to blame. There was a tension in culture that we have to work our way through. People were embarrassed about working for the bank."
Hourican’s recipe for the rebuilding of morale is "hard work and heavy lifting".