Insider Business BoC close to selling €2.8 billion worth of NPLs

BoC close to selling €2.8 billion worth of NPLs

Bank of Cyprus is close to selling Project Helix 2 portfolio of non-performing loans worth up to €2.8 billion following contacts between members of the lender and UK-based investment funds.

Negotiations on Helix 2 began in mid-June last year shortly after Project Helix 1 was sold, a move that led to the reduction of the bank’s European Banking Association-based NPL’s ratio to 33% by June 30, 2019.

The completion of Project Helix meant the sale of a portfolio of loans with a gross book value of €2.8 billion – of which €2.7 billion related to non-performing loans secured by real estate collateral.

Various investment funds are rumoured to be interested in buying the NPLs portfolio. Two that are now in the second phase of the selling process are Bain Capital and Cerberus Capital.

BoC wants to reach a deal within the first half of 2020, since this sharp decrease of NPLs would have a positive impact on the lender’s balance sheet.

The possibility of loans being sold with partial financing from the bank itself is there. NPLs – as defined by the EBA – amounted to €4.08 billion by September 30, 2019, compared to €4.31 billion by June 30, 2019 and €7.41 billion by December 31, 2018.

By the time Project Helix 2 is completed, red loans are expected to fall to € 1.28 billion, clearing up the lender’s balance sheet and improving financial figures.

BoC had strongly invested heavily in Estia scheme which aimed a boosting borrowers’ ability to repay their loans, as the government subsidizes part of the repayment instalments by 1/3 of the restructured loan.

The bank’s overall eligible participants at Estia scheme concerned NPLs worth €830 million but the response, however, was disappointing.

However, even is Estia scheme is not successfully completed, BoC is expected to reduce its red portfolio to €1 billion through two other big NPLs sales – Project Velocity and APS Delta, with contractual value amounting to €245 million and €34 million, respectively.

By Theano Theiopoulou

 

Read more:

https://in-cyprus.com/from-traditional-bank-employees-to-managers-of-npls/

Top Stories

162 new cases, five deaths announced on Monday

The Health Ministry announced the death of five persons due to COVID-19. This raises the death toll from the virus in Cyprus to 175,...

Where to get antigen rapid tests on Tuesday

The Health Ministry announced the following antigen rapid test sites for Tuesday, 19 January 2021: LIMASSOL Apostle Loucas Church, Agios Athanasios 08:30-16:30 Agios Stylianos Church, Linopetra 08:30-16:30 Cultural...

Searches for 70 year old woman missing at sea suspended due to bad weather

Searches to find a 70 year old woman missing off the Phiikoudes beach in Larnaca have been suspended due to extremely bad weather conditions...

Tourist arrivals plunge by 84% in 2020 in one of Cyprus’ worst tourist seasons due to Covid

Tourist arrivals in Cyprus reached a mere 631,609 plunging by 84.1% year on year in one of the worst ever season for Cyprus’ tourist...

Germany demands release of Kremlin critic Navalny

Germany on Monday demanded the release of Kremlin critic Alexei Navalny, detained on Sunday on his return to Russia, and said it would discuss...

Taste

Squash soup

Ingredients: 1 kg pumpkin, cut into small cubes, approximately 5 cups 2 medium (400g) sweet potatoes, cut into cubes, approximately 2 ½ cups 1 chopped leek, only...

Mezedes

No visit to Cyprus is complete without enjoying the traditional meal of many small dishes known as ‘meze’. This large feast, which has been a...

Prawns with fried cheese, barley shaped pasta

Put the barley shaped pasta into a small pan with salted water, bring to a boil and when tender, drain. Peal the prawns leaving...

Salmon and shrimp sheftalies

Mix all ingredients for tabbouli in a bowl and keep to one side so flavours can combine. Prepare the sheftalies: wash and soak the casing...