The four companies will serve as vehicles for the sale of the affected loans to third parties and the bank has already requested the Central Bank of Cyprus’ green light, the Akel-affiliated newspaper reported on its website.

Bank of Cyprus, which pioneered the reduction of delinquent loans in the banking system by setting up as early as in 2013 a specialised recovery and restructuring division, reported a drop of its non-performing loans to €8.8bn in December or to 47% of the total from €11bn or 55% a year before. The bank is scheduled to announce its first quarter results on Tuesday, May 29.

Haravgi reported that the selection of the loans that will be transferred to the four companies is likely to be based on the type and size of the affected loans and the implementation of the bank’s plan may take into account the government’s plan to set up a company which will take over the government’s to-be-announced scheme to aid vulnerable groups unable to repay their mortgages, dubbed Estia.

According to this year’s stability programme, filed to the European Commission in April, the government aims at reducing non-performing loans in the banking system by around €8bn from currently around €22bn.

Bank of Cyprus did not respond immediately to a request for comment.

Source: Cyprus Mail