Greece: Assistance to the Hellenic Financial Stability Fund for the evaluation of the governance framework and performance of the Board of Directors of Greek Systemic Banks

Location:

Greece

Business sector:

Legal reform

Project number:

1756

Funding source:

EU-EBRD Technical Cooperation Fund for International Financial Institutions – Project-financing in Greece

Contract type:

Consultancy Services

Notice type:

Invitation for expressions of interest (CSU)

Issue date:

31 Mar 2017

Closing date:

21 Apr 2017   at  17:00   Athens

Executing Agency (Client):
Hellenic Financial Stability Fund (H.F.S.F.)
10, E. Venizelos Ave. (Panepistimiou)
Athens 106 71
Greece

The Client Contact Person:
Michael Haralabidis
Chief Risk Officer
Email: MHaralabidis@hfsf.gr
Phone +30 215 5606960
Fax+30 210 3628082

The EBRD Contact Person:
Sophie Medert
European Bank for Reconstruction and Development
One Exchange Square
London EC2A 2JN
Tel: + 44 20 7338 7371
Email: MedertS@ebrd.com


Project Description:
The Hellenic Financial Stability Fund (the Client) has requested the European Bank for Reconstruction and Development (the EBRD or the Bank) to provide technical assistance for undertaking a review and evaluation of the boards of directors and boards’ committees of the four largest banks in Greece (i.e., Alpha Bank, Eurobank, Piraeus Bank and National Bank of Greece), (the Project). The review will be based on best practices and in particular on the provisions of the EU Capital Requirement Directive IV (so called CRD IV) regarding credit institutions’ governance as these have become part of Greek Banking Law, the relevant European Banking Authority (EBA) and European Central Bank (ECB) Guidelines, the provisions of the HFSF Law and of the Relationship Framework Agreements (RFAs) signed between the HFSF and each of the four Greek systemic banks.


Assignment Description:
The Client intends to retain a consulting company of international
reputation and established experience and expertise (the
Consultant) to undertake a review and evaluation of the boards of directors and boards’ committees of the four systemic banks in Greece, thereby ensuring a strong corporate governance of the largest banks in the country and to ensure that these firms, which are facing a difficult economic environment and a high level of non-performing loans, are managed on commercial terms and in line with best international practices on bank governance (the Assignment).

The Project builds upon the board evaluation exercise undertaken in 2016 and has the objective to evaluate the governance framework and the board of directors and board committees and considering best international practices and the fact that the Greek banking sector currently faces a difficult economic environment with very high level of non-performing loans. Through this year’s evaluation exercise the HFSF aims to:

  1. Establish an evaluation culture and discipline on a regular basis.
  2. Evaluate banks’ governance framework with particular focus on board of directors and its Risk and Audit Committees. The NPL management issue will be central in the review.
  3. Provide specific recommendations for improvement.

Consultants should refer to the Terms of Reference ('ToR') for a more detailed description of service requirements available via the following link: http://www.ebrd.com/documents/technical-cooporation/tor-hsfs.pdf

The Project will be implemented under the supervision of the Client. The EBRD and the IFC will ensure compliance with the procurement requirements and provide quality assurance on project implementation.

Status of Selection Process: Interested firms or group of firms are hereby invited to send submissions

Assignment Start Date and Duration: The Assignment is expected to start in May 2017 and has an estimated overall duration of 2 months.

Cost Estimate for the Assignment: EUR 295,000 (exclusive of VAT). Subject to availability of funding.  

The Consultant must determine whether any indirect taxes/VAT are chargeable on the proposed services and state the basis for such. If any indirect taxes/VAT are payable, the Client will have to pay indirect taxes/VAT element to the services directly to the Consultant unless otherwise agreed.

Funding Source: This Assignment is expected to be implemented with funding from the European Union under "EU-EBRD Technical Cooperation Fund for International Financial Institutions – Project-financing in Greece", subject to EU approval, with some co-financing from the Hellenic Financial Stability Fund.

Eligibility: There are no eligibility restrictions regarding nationality of consultants and their experts.

Consultant Profile: Corporate services are required. The Consultant will be a firm or a group of firms with previous project experience related to:

  1. evaluation of systemically important banks’ boards, board audit & risk committees effectiveness focusing on risk governance and internal control framework in Euro area and/or OECD countries;
  2. experience in the assessment of banks’ risk governance (incl. risk culture), risk appetite setting & monitoring and internal control frameworks;
  3. detailed knowledge of the EU framework regulating corporate and risk governance, as well as, internal control framework of banks and EU banking supervisory practices (e.g. the ECB SSM Supervisory Manual);
  4. in-depth knowledge of international standards and best practices in corporate governance, risk governance, internal control framework, risk management (focusing on NPL management);
  5. advising regulatory and/or supervisory authorities;
  6. experience in assessing NPL management framework (focusing on governance structure &  board/senior management interaction).

The Consultant’s expert team is expected to include key experts as follows:

a. Key Expert No 1 (Team Leader) with preferably 15 years of previous professional experience in corporate and risk governance of banks and evaluation of boards’ and boards’ risk and audit committees’ functioning and performance of systemically important banks in the Euro area and/or OECD countries;

b. Key Expert No 2 (Senior Corporate and Risk Governance Expert) with preferably 12 years of previous professional experience in corporate and risk governance of banks and evaluation of boards’ and boards’ risk and audit committees’ functioning and performance of systemically important banks in the Euro area and/or OECD countries;

c. Key Experts No 3 (Pool of Additional Experts) consisting of audit, financial and risk management experts with previous professional experience related to review of corporate documents and provision of advice on relevant assignments. 

Submission Requirements: In order to determine the capability and experience of Consultants seeking to be selected the information submitted should include the following:

  1. Company/group of firms’ profile, organisation and staffing (max. 2-4 pages).
  2. Details of previous project experience or similar assignments particularly undertaken in the previous five years, including information on contract value, contracting entity/client, project location/country, duration (mm/yy to mm/yy), expert months provided (if different from duration) , main activities, objectives.
  3. Proposed approach, work plan and methodology, explaining the understanding of the objectives and the scope of work of the assignment as outlined in the ToR, the technical approach, the methodology for implementing the tasks to deliver the expected output(s), the degree of detail of such output, a work plan for the implementation of the main activities/tasks and milestones, and a Team Input  indicating the number of working days allocated to the Assignment by each Key Expert.
  4. CVs of key experts who could carry out the Assignment detailing qualifications, experience in similar assignments, particularly assignments undertaken in the previous five years, including information on contracting entity/client, project location/country, duration (mm/yy to mm/yy), expert months provided, assignment budget, main activities, objectives.
  5. Financial proposal presented in the breakdown of costs format using the template via the following link: http://www.ebrd.com/documents/technical-cooporation/boc-tc-2017.xlsx
  6. Completed Consultant Declaration Form and Contact Sheet, the template for which is available from the following web-link: http://www.ebrd.com/pages/workingwithus/procurement/notices/csu/contact_sheet.doc 
     

The above information shall not exceed 30 pages (excluding CVs, Consultant Declaration, Contact Sheet and Financial Proposal).

The expression of interest (including Section 1 – 4 and 6 of the Submission Requirements above) WITHOUT THE FINANCIAL PROPOSAL should be submitted, in English via clearly named email (pdf) to the Client’s contact person, to reach the Client not later than the closing date and time. One additional copy shall reach the Bank’s contact person by the same due date. The document shall be one file (pdf). The Client reserves the right to reject applications of firms submitting more than one file. Only if any limitation on the permissible file size is exceeded, the Consultant may split the expression of interest into further files.

In a separate email, the Financial Proposals should be submitted, in English via clearly named email (pdf) to the Bank’s contact person only, to reach the Bank not later than the closing date and time.

Please note that a breach of this submission procedure may lead to exclusion of the selection process.

Important Notes:
1. This is a Selection from Shortlist procedure as envisaged in the EBRD’s Procurement Policies and Rules. The selection will normally be made from responses to this notification only. The highest-ranked Consultant will be invited to negotiate the contract, subject to availability of funding.

2. The required proposal validity period is 90 days from the deadline date for receipt of submissions. During this period, the Consultant shall maintain its original Proposal without any change, including the availability of the Experts, the proposed rates and the total price.

3. The award criteria and weightings will be as follows:
a) Firm’s previous project experience in similar activities and assignments as described in the section “Consultant Profile”, including board and its committees evaluation of systemic banks, board advisory, evaluation of banks’ corporate and risk governance, advising regulatory and supervisory authorities  in Euro area and OECD countries.– 20%;

b) Proposed approach to the assignment, work plan and methodology - 25%;

c) Key Experts’ (CVs) in-depth knowledge and previous professional experience related to similar assignments as described in section “Consultant Profile” including  international standards and best practices  concerning corporate and risk governance of banks, EU legislation on corporate  governance of banks and EU bank supervisory practices - 30%; and

d) Interviews – 25%

4. Interviews: Up to three Consultants shall be invited for interviews. Only the highest scoring Consultants whose technical scores for criteria a), b) and c) exceed the minimum threshold of 70% as per Note 3 above will be considered.

The interviewed Consultants shall be further evaluated on the interviews on the basis of Criterion d) as per Note 3 above. It is envisaged that the interviews will take place between 4-11/5/2017 and Key Expert 1 and 2 will be requested to attend.

The interviews will take place at the Client Office in Athens, Greece, however, participation by phone will be facilitated, if required. The invitation to attend the interview will be issued by the Client in due time before the date of the interview. Consultants should note that the costs of attending interviews are not reimbursable by the Bank.

5. Evaluation of Financial Proposals: Only those submissions which score 70% or more of the total marks available for the combined technical criteria will be eligible to have their financial proposals evaluated.

The lowest evaluated Financial Proposal (Fm) is given the maximum financial score (Sf) of 100.

The formula for determining the financial scores (Sf) of all other Proposals is calculated as following:

Sf = 100 x Fm/ F, in which “Sf” is the financial score, “Fm” is the lowest price, and “F” the price of the proposal under consideration.

The weights given to the Technical (T) and Financial (P) Proposals are:
T = 80 and
P = 20

Proposals are ranked according to their combined technical (St) and financial (Sf) scores using the weights (T = the weight given to the Technical Proposal; P = the weight given to the Financial Proposal; T + P = 1) as following:  S = St x T% + Sf x P%.

6. Consulting firms with current or recent business relationships with one of the four Banks or with a conflict of interest with the above described Assignment working directly with one of the four Banks are not eligible to be selected for the Assignment.