September 15, 2009 / 1:53 PM / in 10 years

Marfin says to remain in Cyprus

NICOSIA, Sept 15 (Reuters) - Cyprus-based lender Marfin Popular MRBr.AT CPBC.CY has scrapped plans to shift its headquarters to Greece.

Cyprus’s second-largest lender had complained of rigid and unfair banking practices on the island, triggering a furious debate over the powers of the central bank and its governor, European Central Bank Governing Council member Athanasios Orphanides.

Marfin Popular said on Tuesday it had decided to keep its headquarters in Cyprus as part of plans to merge with Marfin Egnatia, the unit of the banking group operating in Greece.

“The management of Marfin Popular Bank believes the reaction which followed its initial decision has highlighted the need for a dialogue for the improvement to the supervisory framework in Cyprus and its implementation,” Marfin said in a statement.

Marfin had produced a list of grievances against Cypriot authorities, ranging from slow vetting of bank plans to expand into Eastern Europe to high-handed behaviour by Cypriot central bank officials.

The Cypriot central bank has denied the claims. It had resisted state pressure to engage in a dialogue specifically with Marfin to address the bank’s concerns, saying it could discriminate against the other banks.

The central bank had meetings with Marfin management in recent weeks which were part of regular contacts the supervisory authority had with commercial banks, a central bank source said.

“The governor considers this (Marfin remaining in Cyprus) a positive development,” the source said.

Writing by Michele Kambas, editing by David Cowell

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