articles | 20 December 2019

Depreciation of €260m for collapsed Co-op bank, so far

An amount of €120 million has so far gone back into state funds as part of repayment of government aid towards the collapsed Cyprus Co-operative bank. The repayment commitment was undertaken by KEDIPES.

This amount rises to €260 million if aid repayment of approximately €140 million is calculated through the transfer of real estate from KEDIPES to the state. In addition with other transferred assets such as the collection of works of art, coins and antiquities.

KEDIPES board chairman Lambros Papadopoulos and Chief Executive Officer, Stavros Iacovou, recently presented the quarterly along with their management plan.

The results showed that Altamira’s restructuring or recovery solutions amounted to €307.5m. in the third quarter of 2019 against €376.9m. in the previous one. Ssolutions since the start of KEDIPES operation amounted to €861.2m or 11.7% of the initial loan balance. Papadopoulos expressed satisfaction with KEDIPES’ restructuring process. However, he also pointed out that they have yet to touch the €1.3 billion loan package associated with the government-supported Estia home scheme. Altamira has yet to restructure these loans.

CEO Iacovou described the low interest expressed in Estia scheme as a very negative development. The initial estimate was that more than 7,000 potentially eligible borrowers would have joined Estia with the overall loan amount reaching €1.3 billion. Unfortunately, he added, only 755 applications were filed as of December 13 with the total amount of loans reaching just €148 million. KEDIPES are now contemplating other solutions even though these are not expected to be as favourable as those provided by Estia. KEDIPES acknowledges the right of every Cypriot citizen to own a house, but also the fact that commitments should be met.

Iacovou also referred to solutions such as exchanging a larger home with a smaller one, as well as the right of a borrower to stay in the purchased property and pay rent instead. Strategic non-performers would be confronted with foreclosures, he also warned.

In addition to non-performing loans, the state business entity is also challenged with its internal re-organisation. Papadopoulos said KEDIPES is over-staffed but under-staffed in quality in certain areas. A study on internal structure and organization is now under draft by BDO.

Source: In-Cyprus

Cooperation Partners
  • Logo for Cyprus Investment Funds Association
  • Logo for Association of Cyprus Banks
  • Logo for Cyprus Chamber of Commerce and Industry
  • Logo for Cyprus In Your Heart
  • Logo for Cyprus International Businesses Association
  • Logo for Ministry of Energy, Commerce, Industry and Tourism
  • Logo for Cyprus Shipping Chamber
  • Logo for Invest Cyprus
  • Logo for CFA Cyprus