ETYK Strike Looms for Hellenic Bank

hellenic bank


The struggles over outstanding debt caused by the financial crash and previous years of economic recession continue to take their toll on the banking sector and consumers. Banking employee union Etyk wants to strike on Friday over the Hellenic Bank’s intention to transfer 150 employees to APS, a debt collection company with which it is starting a new venture in Cyprus.

The problem for those employees is that they will lose the ‘credit’ for all the years they worked at the bank. Some of them have seniority and 20 years experience, according to our sources. It’s a fair point. But the bank’s management insists on their decision to transfer the employees.

Another serious point is that the bank has a direct conflict of interest in owning a debt collection company. On the surface it is an elegant solution to the problem of non-performing loans. A more uncomfortable truth lies beneath, however. There is a danger of abuse of power and an easy way out for bank employees to pass the buck to APS instead of finding solutions for their clients. Data protection, consumer rights, all of these would be in danger with a bank owning a debt collection agency.

As much as everyone would like the economy to return to normal and for cash to be flowing, the reality has to be accepted that it will take at least another three years for that to happen. Some analysts say even longer. That leaves another problem for debt collectors; there is a limited local market to which to sell their repossessed items. The headline GDP growth figures are not yet feeding into the bottom line for cash flow. If the economy lost 10 percent during the recession and made three percent growth in 2016, it’s still seven percent behind. In addition, the banks responsible for the financial crash cannot simply wash their hands of their own responsibility in this situation.

The latest issue also highlights the weaknesses in the banking system, which has failed so far to adapt successfully to the refinancing market developing since the financial crash. For so many decades the banks were used to having absolute power over their customers. That all changed with the financial crash. But modernising the thinking and approach to lending has proved to be a painful process. Gone are the days of total respect and fear from businesses and individuals towards bank employees who used to close for the public at 1pm or even earlier. And yet at the same time, the banks and ETYK are not willing to earn respect by working normal hours so they’re open later in the day instead of closing inconveniently at 2.30. Fact is, their customers are too busy in the mornings to stand in line for a long time. That’s why it’s more convenient to open at 9 and go through until 5 or even 6pm like in the rest of Europe. In the afternoons the pressure is off a bit and you can run along to the bank more easily for bill paying and so on.

Earning respect is about more than simply lending money for financing needs. It is about being there to discuss problems and issues shared by the entire economy. About contingency plans if something goes wrong. It is about planning for the best interests of the client and company. One doesn’t expect compassion from a bank, but practical assistance, convenience and solutions are certainly to be expected.

Other than that, the banks complain their performance is not good. And yet they close at 2.30 for the public. If they stayed open longer and had more innovative solutions for their clients, they’d make more money.

Leverage is there for the benefit of customers as well as banks. But for a bank to own a debt collection company is unfair leverage.

A call to the Cyprus Central Bank was made to ask about the regulator’s opinion on this conflict of interest, and we expect an answer shortly, after which the article will be updated.