INTERVIEWS Alex Hooft van Huysduynen Martin Lindstrom Barbara Tuge-Erecinska FIDUCIARY SERVICES Changing with the times PLUS: MONEY / BUSINESS ECONOMY TAX & LEGAL LIFESTYLE / OPINION MONEY A crisis made in Switzerland THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS 5 291295 000577 00001 > ISSUE 47 FEBRUARY 14 - MARCH 13, 2015 PRICE €4.95 POWERED BY: THE NEW F ACE OF CYPRUS BANKIN F ACE F ACE G CHALLENGES & OPPORTUNITIES
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
INTERVIEWSAlex Hooft van Huysduynen Martin LindstromBarbara Tuge-Erecinska
the international investment, finance & professional services magazine of cyprus529
1295
0005
77
00001>
529
1295
0005
77
00001>
ISSUE 47 FEBRUARY 14 - MARCH 13, 2015PRICE €4.95
POWERED BY:
the new
f aceof cyprusbankin
f ace
f ace
gc h a l l e n g e s & o p p o r t u n i t i e s
T H E F I R S T N A M E I N E T H I C S
C H R I S T O S
We are one of the world’s largest independent providers of trust, fund and corporate administration services.
We are committed to helping our clients protect, nurture and grow their wealth.
Above all, we are a people business.
To find out more about our services and to get to know us better, visit
www.firstnames.com
THENEW FACEOF CYPRUS
BANKINGChallenges and Opportunities
4 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS
14 | IN BUSINESS AWARDS 2015Photos of the event, plus details of who won what.
42 | THE ETERNAL OPTIMISTInterview with Barbara Tuge-Erecinska, Ambassador of Poland.
80 | SUCCESS... AND SUCCESSIONWe talk to the outgoing and incoming presidents of EuropeFides, the European Accounting, Audit, Tax and Legal Asso-
6 818
Issue 47February 14 - March 13, 2015
EDITORIALUP FRONTFIVE MINUTES WITH...
TIME TO GET SERIOUSBy Kyriakos Iordanou 10
GREATER RESTRUCTURING REQUIREDBy Dr. George Mountis 37
INHUMAN AND ABSURD By George Mouskides 85
+ OPINION
94 {money}
96 {business}
98 {economy}
100 {tax & legal}
102 {lifestyle}
FEATURES
14
42
45
SPECIAL ADVERTISING SUPPLEMENT
THE CYPRUS SHIPPING DIRECTORY17 shipping-related companies
present their service
We profile seven major banks and talk to their CEOs about the new challenges – and opportunities – they face in 2015.
86ciation for medium-sized companies.
86 | A FAMILY AFFAIRLawyer Christos Neophy-tou on the profession and working in a family firm.
88 | A CRISIS MADE IN SWITZERLANDThe Swiss National Bank’s surprise move last month to drop its euro peg sent shocks through the currency markets that led some Forex firms to close down. What happened?
Cyprus is certainly not the only place in which bankers have seen their public im-age change so dramatically in such a short space of time – from respected mem-bers of the community and people to be respected to deceivers, fraudsters and, at worst, common criminals – but some of the stories that have come to light here since March 2013 have understandably ruined both personal and corporate
reputations. The major banks’ over-exposure to Greek debt (either through loans given or in-vestment in Greek government bonds) and the subsequent haircut which saw them lose some €4.5 billion overnight (numbers may not mean a lot but that figure represents around 25% of Cyprus’ GDP that year) led to accusations of totally inadequate regulation and corporate gov-ernance in a sector that ordinary people had always taken for granted as being safe and secure.
In this sense, it is hardly surprising that confidence in local banking institutions was at an all-time low just over two years ago. But it has to be acknowledged that, following the shock, the island’s banks have been working hard to put their house (and their balance sheets) in or-der. Three of the four that underwent the ECB’s stress tests passed with flying colours and the fourth quickly made up the noted shortfall with a new injection of capital from shareholders. Foreign investors have come into the big banks, Boards have been reshuffled and new CEOs elected and there is an almost tangible sense of optimism returning to the sector, though this may not yet have filtered through to the people who saw their uninsured deposits in Bank of Cyprus and Cyprus Popular Bank (Laiki) taken as part of the unprecedented bail-in and con-verted into shares. It would appear, nonetheless, that 23 months has been long enough to make a start towards regaining customer and corporate confidence.
Unfortunately for the banks, they also have to deal with the increasingly populist-minded opposition parties in the House of Representatives which appear determined to prevent them from being able to resolve their main problem of non-performing loans (NPLs). Under the guise of protecting ‘ordinary people’ who cannot service their mortgages, by refusing to pass es-sential legislation on foreclosures, they have not only ensured that the state does not receive the next tranche of financial assistance under the terms of Cyprus’ Memorandum of Understand-ing with the Troika, but they have also brought about a situation by which the country will not be able to benefit to the tune of €120 million every month until September 2016. Who are the real criminals here?
There are, at present, 56 authorised credit institutions in Cyprus. For this month’s cover story (page 19), we present some essential facts and figures concerning seven main banks and speak to their CEOs about how they are facing the ongoing challenges, including ways of resolving the NPL situation and returning to their traditional business of granting loans to busi-nesses and individuals.
Last month, our cover story featured interviews with eight foreign ambassadors to Cyprus and we continue with two more: German Ambassador Nikolai von Schoepff (page 18) and, in greater detail, Polish Ambassador Barbara Tuge-Erecinska (page 46) who recalls her involve-ment in the now legendary Solidarity trade union and her subsequent diplomatic and political career. Other interviewees this month include brand expert Martin Lindstrom (page 88), Alex Hooft van Huysduynen, Managing Director of TMF Group Cyprus (page 38), George Sav-vides, Partner in Fiducenter Cyprus (page 42), and lawyer Christos Neophytou (page 92), as well as Simon Marsh, Partner, WSM Advisors Ltd, UK, and Stephen Balzan, Partner, ACT Advisory Services Ltd, Malta (page 86) who are, respectively, the outgoing and incoming Presi-dents of the EuropeFides network of tax consultants, certified accountants and lawyers. Add to all this our features on money, economics, business and tax issues, plus an article on investing in cigars, and I think you’ll agree that there’s plenty of good reading in this issue of Gold.
6 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS
MANAGING DIRECTOR George Michail
GENERAL MANAGER Daphne Roditou Tang
MEDIA MANAGERElena Leontiou
EDITOR-IN-CHIEF John Vickers
JOURNALISTSEffy Pafitis, Chloe Panayides
CONTRIBUTORS TO THIS ISSUE Kyriakos Iordanou,
Andreas Kontos, George Mountis, George Mouskides, Elia Nicolaou
ART DIRECTION Anna Theodosiou
SENIOR DESIGNERAlexia Petrou
PHOTOGRAPHY Jo Michaelides
MARKETING EXECUTIVE Kevi Chishios
SALES & BUSINESS DEVELOPMENT EXECUTIVE
Phivos KarayiannisADVERTISING EXECUTIVES
Irene Georgiou, Christopher ConstantinouOPERATIONS MANAGER
+ DAI LINGYUN, SAVVAS SAVOURI, GEORGE & ALEXIS TSIELEPIS
THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS
ISSUE 45 DECEMBER 14, 2014 - JANUARY 13, 2015PRICE €4.95
POWERED BY:
LET’S SEE
ACTION!
529
1295
0005
77
0000
1>
SPECIAL OFFERSubscribe today for just €90 and get an annual subscription to both Gold & IN Business
Call us on (+357) 22505555
OFFER INCLUDES
FREE ACCESS TO
DIGITAL EDITIONS
C ypriot investment
to €42.5 million
National Bank’s
-
-
National Bank’s an-
tourist accommodation establishments. According to figures released by Eurostat, the official statistical office of the EU, Cyprus was second only to Malta, with a 96% share of foreign demand.
The publication of these figures follows the announcement that the number of nights spent in tourist accommodation establishments in the EU is expected to have reached an all-time high of around 2.7 billion nights in 2014, up by 1.7% compared with 2013. Following the decline observed in 2009 with the beginning of the financial crisis, there has been a steady increase in the number of nights spent in tourist
accommodation establishments in the EU over the last 5 years, Eurostat details.
This pattern can be observed for nights spent by both residents and non-residents; in 2014, France and Spain continued to be the top 2 Member States in terms of tour-ism nights, with 403 million nights and 401 million respectively, followed by Italy and Germany, 370 million and 366 million.
After Malta and Cyprus, the highest shares of nights spent by non-residents were registered in 2014 in Croatia (92%), Luxembourg (88%) and Greece (79%), and the lowest in Romania (18%), Poland (19%) and Germany (20%).
UP FRONT
EGYPTIAN INVESTOR JOINS AYIA NAPA MARINA
PROJECT A
new strategic shareholder has joined the ambitious €220 million project to build a marina at Ayia Napa. The consortium responsible for the development of the marina
has concluded an agreement with Egyptian investor Naguib Sawiris. Work is expected to start this year and be completed by 2018. Sawiris says that “Even Mykonos does not have marina facilities of the high quality we are seeking to create here. The faster it kicks into the economy, the more success it will have.” Sawiris cited
the marina. He said that it will include a variety of residential and hospitality facilities, including apartments and villas as well as a luxury hotel.
Cyprus recorded the second highest tourist demand from non-residents of the 28 Eu-ropean Union member states
in 2014, accounting for 94% of total demand. Tourist demand is evaluated by the number of nights spent in local
8 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS
ELEFTHERIA SQUARE RENOVATION RESTARTS
R enovation of Nicosia’s Eleftheria Square has finally begun once again, following the award of the project’s development
contract – valued at €13.5 million – to the prominent local construction firm Lois Builders Ltd. Work is expected to be completed in 64 weeks. The masterplan for the renovation of Eleftheria Square was created by the renowned Iraqi-British architect Zaha Hadid, whose evaluation of the project states: “Eleftheria Square constitutes a dramatic and historically significant architectural intervention – an aspiration to reconnect the ancient city’s massive fortified Venetian walls and moat with the modern city beyond – a bold vision of coherence and continuity which can become a catalyst to unify the last divided capital of Europe.” Discussions about the square’s renovation began decades ago, with Nicosia Municipality issuing tenders in 2004 with the hope of completing the project in time for Cyprus’ rotating presidency of the Council of the EU, in July 2012. A year later work stopped due to a dispute over rising costs. Lois Builders Ltd, founded in 1977, is one of the longest-established and most highly regarded construction companies in Cyprus.
CIFS LOSE €40M ON SWISS FRANC DEVELOPMENTS
CYPRUS RECORDS SECOND HIGHEST TOURIST DEMAND IN EU
New flights from Larnaca to Lon-don, Amsterdam and Tel Aviv were announced this month. British Airways (BA) will be increasing in the number of
flights from 7 to 13 per week as part of its ‘Summer 2015’ flight schedule. The additional flights start on 29 March and will continue until 25 October, They will use Heathrow Airport’s Terminal 5. As
part of its new pricing structure, BA will be offering attractive rates on its econ-omy fares, with a return ticket priced at €249, inclusive of taxes. This summer, BA will also be running its regular London Gatwick-Paphos and London Gatwick-Larnaca flight schedule.
Meanwhile, the low-cost European airline Transavia starts four direct flights between Larnaca, Paphos and Amster-dam per week. From April 2015, the new route will be serviced by two flights from Larnaca and two from Paphos, with fares starting from €79 one-way. Transavia
also offers flights from Larnaca to Paris (Orly Airport) during the summer season.
Finally, Aegean Airlines began direct flights three times a week between Larnaca and Tel Aviv on 3 February 2015. In the summer, the company will operate daily direct flights between the two cities.
Aegean’s summer timetable, pre-sented on January 13 in Nicosia, will see the operation of 4 Airbus A320 aircraft from its Larnaca base, while the number of destinations connected directly with Cyprus will increase to 14.
MORE FLIGHTS FROM
LARNACA
UP FRONT
10 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS
T here are hundreds of thousands of singers and musicians in the world, many of whom make records. Of these, only a relative handful make
a great deal of money from their recordings – there is more for those who write their own material – and of these, some are extremely wealthy. Here is the Top 10 richest recording artists, as compiled by Wealth-X, the world’s leading ultra high net worth (UHNW) intel-ligence and prospecting firm.
1. MADONNA Age: 56
Estimated Wealth: $800 million
--
Rebel Heart
2. PAUL McCARTNEYAge: 72Estimated Wealth: $660 million
-
Hope For The FutureDestiny
3. DR. DREAge: 49
Estimated Wealth: $650 million
.
Eminem
six -
-
4. DIDDYAge: 45
Estimated Wealth: $640 million
-
5. CELINE DIONAge: 46
Estimated Wealth: $630 million
-
-
My Heart Will Go On Titanic.
6. BONOAge: 54Estimated Wealth: $590 million
--
7. MARIAH CAREYAge: 44Estimated Wealth: $520 million
-
-Glitter
Precious
8. JAY-Z Age: 45Estimated Wealth: $510 million
-
9. ELTON JOHNAge: 67Estimated Wealth: $450 million