Bank executive appointments taking far longer than expected

The completion of management changes in Greek banks – a critical issue that was supposed to have closed weeks ago – remains open and it appears that it will take several more weeks before new administrations are appointed.

Four long months after the assessment of the four banks’ board members by the Hellenic Financial Stability Fund (HFSF) was completed, several matters remain pending, mainly concerning board changes to Piraeus Bank and National Bank.

Regarding Piraeus, it appears that the parties involved – stakeholders and institutional authorities – have decided on the new chairman: Giorgos Hatzinikolaou, who has a long and rich career abroad. What is posing a bigger challenge is the appointment of a chief executive. The shortlist contains six candidates, three of which are being pegged as favorites. If the stakeholders and the authorities reach an agreement, then the new CEO could be announced next week; otherwise a decision will be put off to the end of the month. Piraeus Bank has operated under a temporary CEO since January.

In National’s case, the bank is seeking a new chairman as well as board members. Employing an open process, it has collected CVs and has scheduled interviews over the next few days. There are four or five candidates for the chairman’s post and the aim is to have the final selection procedure completed in the next 10 days.

The board assessment began last November with the ratification of the legislative framework, followed by months of board member valuations by the HFSF. Criticism has been voiced about the criteria used, which is said to have been too strict and led to the replacement of dozens of board members, as well as in regards to the entire process. Critics say that it has generated major administrative unrest in the banks for a long period of time, just as lenders should have been entirely focused on bigger problems: dealing with nonperforming loans and attracting deposits.

Analysts also point out that the appointment of board members based on the law’s criteria has proven so hard that a more flexible interpretation has been applied to recruit new members.