Insider Business Parallel banking industry in Cyprus focuses on NPLs

Parallel banking industry in Cyprus focuses on NPLs

A parallel banking industry focusing on non-performing loans is developing in Cyprus, attracting the interest of both “red loan” servicers and investment funds.

Administrations of both small and large banks are speeding up moves to reduce exposure to the island’s non-performing loans whose total stood at  €9.7 billion at the end of June. Two are the solutions: selling of NPLs packages and/or outsourcing bad debts to servicers.

Bank of Cyprus is in the process of selling a new package of non-performing loans with a book value of over €2 billion. In the second half of 2019, the group began looking into the viability of various NPL reduction methods in order to identify the best option to meet strategic objectives.

Hellix 1 concerned the sale of a loan portfolio with a gross book amount of €2.8 billion to specific investment funds affiliated with Apollo Global Management LLC.

The transaction was the first sale of NPLs with collateral in the Republic of Cyprus, and is considered the first red loan portfolio transferred both in Cyprus and in Greece.  BoC had reached an agreement with Pepper to manage red loans of € 800 million early in 2017.

Hellenic Bank is also considering the sale of NPLs and has entered a preparatory phase reviewing the viability of various reduction methods. The lender has appointed international consultants and proceeded with discussions following the signing of confidentiality and information exchange agreements with various third parties interested in possible cooperation agreements.

In fact, it has already outsourced the Delayed Instalments Management Division to APS Debt Servicing Cyprus Ltd (APS Cyprus) whose operations began in July 2017. Hellenic Bank also had a small package of a non-performing loans totalling €144 million sold to B2Kapital Cyprus in June 2018.

Altamira is one of the largest NPLs managers in Cyprus with some €7 billion of KEDIPES red debts under its portfolio.

However, there are crucial developments now that the European Commission has set a specific timetable for the participation of the state in the asset management company which was set up after the collapse of Cyprus Co-operative in Altamira. Their contract expired last  March.

Negotiations should begin on the revision of the original agreement concluded with the then administration of the collapsed lender . And indications are that Altamira will carry on, but with amended terms of the original contract.


Read more:



Top Stories

Greece records over 2 thousand new covid cases in tragic peak-135 in ICUs (update)

  Greece recorded a new surge in new covid-cases, going over two thousand daily tally for the first time since the start of the pandemic. 2,056...

Cyprus records Covid death, raising number to 33, five critical-149 new cases

  A ninety one year old woman with underlying illnesses, succumbed to Covid-19 today at the Famagusta General raising the number of positive cases who...

Greek Orthodox priest shot in Lyon, France; assailant flees (update 2)

  A Greek Orthodox priest was shot and injured at a church in the French city of Lyon by an assailant who then fled. The priest...

Tala fire under control

  A massive blaze between the Tala, Koili and Kissonerga communities was placed under control late this afternoon, after more than two hours. It destroyed trees,...

The first 007 dies at 90-So long Sean Connery

  Scottish movie legend Sean Connery, who shot to international stardom as the suave, sexy and sophisticated British agent James Bond and went on to...


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...


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...