8 July 2015

Customers of FBME Bank’s Cyprus branch are advised that payouts from their accounts have been moved to one a week of EUR 1,000, rather than the daily amounts of EUR 200, which has been the rule since early March. The registration of requests has to be completed by noon Cyprus time on Wednesdays; the Administrator, Andrew Andronikou will review documentation and sign cheques at 4.30 pm on Thursdays, and the cheques themselves will be issued on Friday afternoons. The process has started from the week commencing 6 July.

This brings a touch of sanity to a situation that was seeing thousands of pieces of paper flying around between the Bank and the Administrator, and the Bank of Cyprus, which was kindly acting as paying agent as long as FBME customers opened an account with them (and thereby generating income for them). It reduces the sheer volume of cheques that needed to be printed, while cutting the risk that the process will be undermined by badly printed cheques, as happened in April. The only losers are the cheque printers of Cyprus who probably couldn’t believe their luck with the anomalous former arrangement.

Well done everyone for only taking just over four months to come up with this reform. Special mention should be made of Andrew Andronikou in finally persuading the Central Bank of Cyprus to accept the change. It must be pointed out though that it enables him to revert to a situation where he is in Cyprus for only a couple of days a week.

Andronikou’s appointment commenced with a ‘raid’ on FBME’s Cyprus branch on 30 April. There is still no report from this so-called ‘raid’ in line with usual CBC habit of taking totally unnecessary and highly unhelpful actions, the reasons for which they never explain. The only effect of the raid so far – the results of which could be further used to disprove allegations against FBME – is that it may have triggered the walk-out of the former CBC Administrator Dinos Christofides.

At this juncture it is worth reminding readers of the CBC practice of dipping into the deposits of FBME customers to pay for the guarding firm G4, Andrew Andronikou and others, without recourse to any legal process, by-or-leave from the Bank, or even an indication that a proper tender procedure has been followed in awarding contracts.

G4 had been costing varying amounts around EUR 16,000 a week for their people to do nothing at the Bank in Nicosia, in Limassol, at a warehouse and others at a new and unoccupied Bank building. Andrew Andronikou is being paid EUR 50,000 a month plus EUR 10,000 for agreed expenses (probably the weekly flights to and from London). FBME has not been advised how much Kroll and the law firm D L A Piper are being paid, the Bank just sees a steady erosion in the level of funds being held by the Central Bank of Cyprus.

Finally, the CBC is still clinging to the fiction that it can withhold EUR 150 million of the funds of FBME depositors for its Deposit Protection Scheme, despite the opinions of legal counsel and, apparently, those of its own advisors too.