articles | 09 June 2016

Coop to divest 562 properties worth €160 million

The Cooperative Central Bank is expected to start divesting of property acquired through debt restructurings according to a recent report by the Management Unit for Participation of the Republic of Cyprus in the Ownership Structure of Credit Institutions.

Divestments are expected to begin in July 2016. The total number of cases sent for divestment is 562, totalling €160 million in value.

The overall balance of the real estate portfolio as it appears on the balance sheet of the Cooperative Central Bank on December 31, 2015 is valued at €545.7 million. The portfolio is separated into the following four categories: investment property (€227.4 million), property available for sale (€28.1 million), property received in satisfaction of debt (€72.2 million), property, plant and equipment (€218 million).

The worst payers for the Coop are in the Paphos District, with non-performing loans (NPLs) reaching 80.26% of the total by the end of the first quarter of 2016.

The districts of Larnaca and Famagusta are second worst, 73.14%, followed by the Nicosia District at 69.78% and the Limassol District at 67.30%.

The best clients of the Coop are in occupational funds, where the NPL ratio is only 16.31%.

According to the report, during the first quarter of 2016 the following targets were set: proposed solutions (€257.1 million), implemented restructurings (€257.1 million), a 70% cure rate and €102.8 million for the remainder of restructured accounts.

The Coop missed its target for restructuring NPLs. The monthly target for March was €7.92 billion or 62.01% but only €7.43 billion or 59.26% of loans were restructured, marking a drop on 2.75% from the stated goal.

However, it exceeded the target on loans in arrears for more than 90 days. The monthly target for March was a decrease to €6.6 billion or 51.66% but they were reduced to €6.25 billion, marking a decrease of €355.3 million of 1.80% compared to the goal.

Following legislation on waiver of debts, the Cooperative credit sector received requests from 61 customers who asked for the waiver of debts totalling €1.6 million in value. In addition, seven customers requested a personal repayment plan with total debts of €4.5 million, and 13 customers were issued with a bankruptcy decree, with total debts of €6.5 million. Regarding new credit that will be offered to customers, under the revised plan the Coop is due to lend €900 million in new loans, or €300 million each year in the years 2016-2018.

Source: InCyprus

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