Hourican the Celt basks in a warm glow in Cyprus
Former RBS investment banker John Hourican, now the chief executive of embattled Bank of Cyprus (BoC), wore a distinct air of satisfaction when I spoke to him during the week. Victory, even a preliminary one, will do that for a man.
The bank announced on Tuesday that investors including Wilbur Ross – he of Bank of Ireland fame – had committed to pumping €1 billion into the Cypriot institution to beef up its ratios following its near death experience last year.
Hourican pulled off the deal in three weeks from a standing start, all in the face of grumblings from the bank’s existing shareholders, including many Russian and local depositors “bailed in” as part of the bank’s bailout last March.
The new shares will be issued at 24c, valuing BoC, which is 80 per cent owned by the depositors, at half its book value. Depositors over €100,000 took a haircut of 47.5 per cent last year, and were surely hoping for some financial Rogaine this time, rather than what must feel like a blade one all over again.
“There are emotions from the shareholders, sure. But most of it comes from the fact that they were unfairly bailed-in in the first place,” said Hourican, with a generous dollop of political tact. He still has to get the deal past an emergency meeting of shareholders this month. That should be fun.
Ross, who made nearly €500 million profit on his Bank of Ireland investment, “sees the parallels” between his Irish and Cypriot bets, according to Hourican. The banker says he didn’t just lean on his contacts back home to tempt Ross into a deal, however. “I know Richie (Boucher, the BOI boss). But I didn’t just call him up and say, ‘Put me in touch with your mate Wilbur’.”
Euan Hamilton, whom Hourican plucked from RBS to help him sort out BoC, gave an extensive interview to a local newspaper recently. While explaining their business approach, he blurted: “Both myself and John are Anglo Saxons”.
I wonder what Hourican, a proud Dub, thought of that little beauty?