Greek central bank lifts Attica lending freeze

ATHENS: Attica Bank shareholders approved a new chief executive and board chairman on Tuesday to address corporate governance concerns and the Greek central bank quickly lifted a freeze on new lending.

The small Greek bank, which is majority owned by the engineers pension fund TSMEDE, approved the appointment of Theodore Pantalakis as chief executive and Panagiotis Roumeliotis as board chairman.

Last week, the central bank froze new lending until Attica resolved "serious structural problems and corporate governance issues" and Attica's shares were suspended.

"Today's extraordinary shareholders' meeting puts an end to the management gap," the Bank of Greece (BoG) said in a statement. "Following Tuesday's developments, the BoG immediately lifts the restrictions." The Athens bourse also lifted the trading suspension on the shares.

Roumeliotis, who served as Greece's representative at the International Monetary Fund and later as vice chairman of Piraeus Bank, told shareholders that management would address the issues raised by a Bank of Greece audit.

Apart from corporate governance issues, such as having pension fund officials rather than bankers in executive posts, the audit found that Attica needed to improve its organisation, upgrade information technology systems and deal with relatively high labour costs, he said.

"The new management will not accept pressures from anyone, we will not play any political games," Roumeliotis said, adding that Attica would no longer extend loans to media firms and would conclude its recapitalisation by the end of the year.

In December, Attica, which has 79 branches, raised 91 percent of the 749 million euros it needs to fill a capital gap uncovered during a stress test but has struggled to find the remaining 70 million euros.

Roumeliotis said the priorities would be to lower the bank's high dependence on central bank emergency funding, reduce non-performing loans and strengthen trust among depositors. New CEO Pantalakis, who formerly headed ATEbank, is planning to cut pay and launch a voluntary retirement scheme at Attica, whose non-performing credit accounts for 58 percent of its loan book.

"We are not going to be pleasant, restructuring is not a pleasant experience, some will be affected.

We need reduced pay and more work to convince everyone we are doing the job right," Pantalakis said.