Apollo Global Management, Pacific Investment Management Co and Lone Star Funds are reported to want to buy some of a non-performing loan portfolio valued at €5b that Bank of Cyprus plans to sell, Bloomberg reported on Monday, citing people familiar with the issue.
It said that Bank of Cyprus is going to proceed with the so-called Project Helix offering in August. The lender repeated its position that it would cut its bad loans “through both organic and inorganic activity,” according to an emailed statement from a London-based external spokeswoman for Bank of Cyprus, who declined further comment, it added.
Cypriot and European officials have been urging the nation’s banking sector to reduce the amount of NPLs, aiming to avoid a repeat of the island’s 2013 economic crisis.
A spokesman for Pimco did not reply to a request for comment, while spokespeople for Lone Star and Apollo declined to comment, Bloomberg said.
Despite Cyprus’ economic upswing, NPLs still weigh on banks’ profitability and have prevented significant improvement in financial health for households and companies, the International Monetary Fund said earlier this month. The European Commission and European Central Bank called on the country’s banks to prioritise reducing NPLs in a joint statement earlier this year.
Other interested parties in the Bank of Cyprus loans include B2 Holding ASA, a Norwegian firm specialising in distressed bank loans. It’s interested in co-investing with any buyer of the bad loans, with a view to servicing them, Rakis Christoforou, managing director of the Oslo-based company’s Cypriot arm, B2Kapital, told Bloomberg.
In June, B2Kapital completed the purchase of a package of mostly non-retail secured and unsecured exposures from Hellenic Bank valued at about €144 million.