Daily Press Review - 3/12/2019

Hellenic Bank invests its excess liquidity

Hellenic Bank is trying to invest a part of its excess liquidity, in order to avoid the returns of the negative rates in the European market, the CEO of Hellenic Bank, Ioannis Matsis said. Speaking at a Press Conference on the occasion of the announcement of the Bank’s financial results for the first 9 months of 2019, Mr Matsis noted that it is the bank’s duty to look into investing a part of its excess liquidity in foreign investment products. He also implied that the bank is evaluating opportunities that can potentially bring in a positive interest rate, so as to channel part of its excess liquidity either in state or corporate bonds. He explained that this intention is not taking place so that the bank can conduct banking operations abroad. “We are not going to open branches in other countries and create customer relations that will lead to lending. This is an investment approach, in the same way that someone purchases state bonds”, he observed. In a question if the bank intends to expand its state bond portfolio, Mr Matsis said that the bank’s policy is to maintain a healthy dispersion in its investment portfolio, which will include both state and corporate bonds. Called to comment on the recent statements of the head of the Central Bank, Constandinos Herodotou, who warned of the potential to create a bubble in housing, due to the reckless provision of housing loans, noted that he fully shares the concerns of the supervisory authority. “The market, slowly slowly will have to absorb new lending for home purchases. Fortunately, the economy is doing well, it is being developed and this encourages further lending in the market, but always with caution and with all banks implementing the correct criteria”, he added. He noted that there are already many assets in the balance sheets of credit institutions, that were acquired in the framework of debt-to-asset swaps, and that NPLs are mortgaged on real estate. “There is a need for great caution”, he stressed. He noted that there is ample room for the provision of new loans but mostly in sectors such as education, tourism and shipping. The CEO of HB, left open the possibility for Hellenic Bank to further reduce its branches, following the first sifting process that was carried out along with the full integration of the good portfolio of the former Co-op. They realised that some former Co-op branches are very close to Hellenic Bank branches, and in this case, as it was reported, they will inevitably look into the possibility of closing some of them, since all HB customers are now served as normal.



Hellenic: Possible increase of charges at the tills and reduction online  

“The issue of charges is being examined but we are not in a position to say whether they will be increased or not,” HB CEO Ioannis Matsis said yesterday. Referring to the possibility of increasing the bank’s charges, he said: “We are looking at the charges, as our expenses are increasing by the day and they have to do with the Bank’s supervisory requirements and the protection of depositors and borrowers through correct lending and restructurings. The supervisory cost is taken on by the Bank, but sometimes it has to be shared out to its customers and shareholders too.” Asked about the charges that have already been revised, he said these changes were needed as different charges applied to HB customers as opposed to Cyprus Co-operative Bank customers. At the same time, Matsis said there was a possibility the charges will be reduced in some sectors and increased in others. “The cost for transferring money or paying online is smaller than a transaction at a branch, therefore we can reduce the costs for digital payments and increase the costs for paying at the till,” he said.



Hellenic: Enhanced financial standing and strategy

The risks to HB’s balance sheet have reduced substantively as a result of its acquisition of part of the CCB’s assets, with the Group’s NPE ratio dropping from 53.3% on 31 December 2017 to 25.2% on 30 September 2018, with the NPE coverage ratio after provisions at 53.4% and the Texas ratio improving from 94% on 31 December 2017 to 82% on 30 September 2019.



Who Hellenic Bank gave loans to

HB’s total advances reached €7.35b at end-September 2019, excluding advances to central banks and credit institutions. As regards non-financial businesses, which take up 40.3% of the loans, total advances of €2.96b were granted, of which €2.69b concerned small and medium sized businesses. Per sector, loans to the construction sector totalled €532m (or 7.2%), loans to wholesale and retail trade €686m (or 9.3%), and real estate €267m (or 3.6%).



Hellenic Bank submits first claim to KEDIPES worth €65.8m

Hellenic Bank’s first claim to KEDIPES in the framework of the Asset Protection Scheme (APS) - that was agreed to cover any loss that may be incurred by the former Cyprus Co-operative Bank’s red loans - amounted to €65.8m. Hellenic Bank's Head of Economic Research, Andreas Ashiotis, confirmed that Hellenic Bank activated for the first time the APS, in the third quarter of 2019 in the context of the Co-op-Hellenic Bank deal. The Bank paid the first instalment of APS’ guarantee fee, to the Cyprus government worth €15m for the provision of “protection”, but at the same time, it has submitted its first monetary claim to KEDIPES, worth €65.8m. The €65.8m concern a period of 10 months from the date of the acquisition i.e. 3 September 2018 until 30 June 2019. Called to comment on the procedure, Hellenic Bank’s economist noted that the deal that was signed foresaw that the Bank should pay a “fee” in order to be able to use the so-called “APS”. The fee he said, will be reduced depending on the portfolio under evaluation. As such Hellenic Bank has an incentive to reduce any low-quality loans. The “APS” sum has been fully calculated in the results of the first 9 months of 2019, it is included in the accounting estimate and follows the policy of accounting standards on the basis of which the value of future proceeds is recognised immediately, excluding charges that may result from the APS. Besides, this is why Hellenic Bank announced a profit of €295.9 in the first nine months of the year.







Deposit rates hit rock bottom

Deposit rates are on the decline. The ECB’s practice is to implement negative interest rates in the range of 0.6% to prompt the banks to grant more loans, which in turn will help with economic growth. A number of Eurozone countries have already introduced negative rates and Cyprus is expected to follow soon. Already, a number of Cypriot banks have informed their customers about imminent changes to their rates. BoC said that as of 31 January 2020, its rates on accounts will be as follows: adults 0%, minors 0.20%, Direct Access 0%, 8-day notice account: up to €20,000 – 0%; from €20,001 until €100,000 – 0%; and from €100,001 upwards – 0.2%. For 35-day notice accounts: up to €20,000 – 0.5%; from €20,001 until €100,000 – 0.10%; and from €100,001 upwards – 0.15%. The options Hellenic Bank is looking at are: Current Account: 0.00%, Savings Account 0.00%, 8-day notice account 0.10%, 35-day notice account 0.10%, 6-month notice account 0.20%, and 6-month notice account for children up to 13 years old, 0.40%.



Moody’s: Astrobank acquiring National Bank of Greece is a positive development

In the weekly Credit Outlook, the rating agency Moody’s described Astrobank’s acquisition of National Bank of Greece (Cyprus) as credit-positive. The transaction is positive because, reportedly, it strengthens Astrobank’s finances and presence in Cyprus, and will result in fewer but stronger banks in the “small but saturated banking sector in Cyprus”, which is consolidated amidst limited development opportunities. The agency estimates that due to the acquisition AstroBank’s finances will improve, AstroBank’s non-performing Loans (NPLs) will be reduced to 35% (according to the latest data from both banks), from 39% in June, 2019. It’s noted that the National Bank has fewer NPLs, as they transferred their majority outside the bank since 21 December 2018. Both banks maintain strong liquidity, while AstroBank will also increase its share capital in the context of the transaction. The agency expects, that AstroBank’s liquidity and capital adequacy levels will remain strong, with AstroBank’s total capital adequacy index coming close or exceeding 14%. It’s also worth noting that this acquisition follows USB Bank’s acquisition which happened earlier this year, further strengthening AstroBank’s presence in Cyprus. AstroBank will become the 5^th largest bank of the island, with total assets of €2.9b (based on data of June 2019). It will also be the 4^th largest bank of Cyprus in deposits, with €2.6b (based on data of June 2019) and the 6^th largest bank in loans of €1.4b. AstroBank's market share rose to 5% from 2% at the end of 2018. It’s also reported that while the acquisition will increase competition in the banking sector, it’s expected to have limited impact on Bank of Cyprus or Hellenic Bank, but it will increase competition among other banks of the system.



Large investment interest in CSE’s roadshow in Athens

The roadshow organised by the CSE in has Athens managed to attract large investment interest, while the CSE and the ASE reaffirmed their intention of expanding their already close relations. The roadshow event took place at the offices of the ASE, which began with the traditional bell and address by the Chairman of the CSE Mr. Marinos Christodoulides and the Chief Executive Officer of the ASE Mr. Socrates Lazaridis. Then followed the presentations of listed CSE companies that participated in the mission. In this context, around 70 business meetings were held between representatives of the institutional investors and the respective Cypriot Companies. The Companies that participated in the mission are:

-    Bank of Cyprus

-    Hellenic Bank

-    Demetra Investments

-    Logicom Ltd

-    Atlantic Insurance

-    Petrolina (Holdings) Public Ltd



7th Cyprus Banking Forum

Logicom Solution presented the Cyprus Banking Forum on 29 November for the 7^th consecutive year at the Landmark hotel in Nicosia. Among the distinguished speakers was HB CEO Ioannis Matsis. HB was also one of the event’s supporters.



What are the biosimilar medicines that are listed in the GHS

The first biosimilar medicine was approved by the European Union in 2006 and since then, these products have largely penetrated the daily life of patients and health scientists. In the last decade, European authorities have approved the largest number of biosimilar medicines worldwide, and have therefore accumulated considerable experience in their use and safety. The European Medicines Agency (EMA) and the European Commission have published a short guide providing information and data on biosimilar medicines. In the guide, it is noted that scientists are gaining more and more experience in using these treatments. Biosimilar are biological medicines often derived from the implementation of innovative biotechnological methods, which have significantly changed the prospects for patients with chronic diseases and are at risk of developing disabilities. An increasing proportion of biological medicines are “bio-similar”; meaning, medicines that are very similar, in all essential aspects, to an already approved biological medicine. The article also reports about the topics to be discussed at the 3^rd annual “The future of Healthcare in Cyprus” conference, entitled “Recent Health System Reforms and Quality of Care”. The conference is under the auspices of the Ministry of Health, is presented by the University of Nicosia at the Filoxenia Conference Centre in Nicosia on Thursday 5 November, where among others they’ll discuss the reform in the heath sector in Cyprus, the role of the newly implemented GHS, risk factors in Cyprus. Hellenic Bank is the gold sponsor of the conference.



Bill for complaints mechanism to be sent to ECB in 15 days

The aim is for the bill governing a mechanism for complaints by cooperative borrowers against the banks to be sent to the ECB for vetting over the next fortnight, Central Bank Governor Constantinos Herodotou told the House Finance Committee yesterday. Herodotou also expressed his disappointment over the number of applications received for Estia, while he said the CBC was also looking at the possibility that the issue has to do with bureaucracy. Invoking November data, Herodotou said that there were 1,050 applications for loans totalling €260m. As for the longstanding problem of private debt, he said that the latest data showed that it made up 215% of GDP (households and businesses) compared with 135% of GDP in the Eurozone. He said the private debt was dropping steadily, however.



Estia stuck at the banks

There may have been 1,350 applications submitted by borrowers for the Estia scheme, however the Labour Ministry, which manages the scheme, has not received any applications so far. Labour Minister Zeta Emilianidou yesterday said that the banks, but also the acquisition companies, have examined 30% of the 1,350 applications, and none of them have been forwarded to the ministry. The deadline to apply to the scheme expires at the end of the year.

 

Bank of Cyprus established an Ethics Committee

Bank of Cyprus has established a new Board of Directors Committee, an Ethics Committee, which will manage issues of behaviour and culture, supervise and approve matters of ethics, oversee the Supervisory Committee’s operations and manage issues that have to do with behaviour and reputation, as well as corporate social responsibility.



Coffers are full

Cyprus’ General Government recorded a surplus of €1,066,0m (4.9% of GDP) for the period of January-October 2019 as compared to a deficit of €626.4m for the corresponding period of 2018 (-3.0% of GDP), according to the preliminary General Government fiscal results which are prepared by the Statistical Service of Cyprus (CYSTAT). According to the Statistical Service, total expenditure for the first ten months of 2019 reached €6,349.8m, which corresponds to a decrease of €905.4m (-12.5%) as compared to the corresponding period of 2018 (€7,255.2m in January-October 2018). Social benefits recorded an increase of €312.5m (+14.7%) to reach €2,440.5m in January-October 2019 as compared to €2,128.0m in January-October 2018. The compensation of employees (including imputed social contributions and pensions of civil servants) recorded an increase of €201.8m (+10.7%) and reached €2,079.7m in January-October 2019, as compared to €1,877.9m in January-October 2018. Intermediate consumption increased by €117.6m (+20.9%) and reached €680.0m for the first ten months of 2019 as compared to €562.4m in the corresponding period of 2018. Current transfers recorded an increased expenditure by €60.7m (+16.8%) and reached €421.7m in comparison to €361.0m in the corresponding period of the previous year, while payable interest increased by €53.6m (+14.1%) during the period of January-October 2019 and reached €432.8m. The corresponding amount for the same period of 2018 was €379.2m. Subsidies increased by €2.6m (+7.7%) to reach €36.3m during the first ten months of 2019 as compared to €33.7m during the corresponding period of last year. Investment was confined to €205.2m, a reduction of €800.3m (-79.6%), during the first ten months of 2019, and capital transfers were limited to €53.6m, a reduction of €853.9m (-94.1%) during the same period. The corresponding expenditure recorded in 2018 were €1,005.5m and €907.5m respectively.



LNG agreement finalized

With the assistance of the Legal Service, the negotiations for the conclusion of the agreement between DEFA - ETIFA (Public Gas Company and Gas Infrastructure Company) on one side and of the China Petroleum Pipeline Engineering and METRON on the other side have been finalized. According to Phileleftheros’ information, the negotiations in recent days have been intense, while the Legal Service, as it was decided at the Presidential meeting ten days ago, has been involved in ensuring that the final terms of the agreement safeguard the interests of the Republic of Cyprus. The final process of examining the complex agreement will take place in the next few days, and if there is no serious reason for postponement, signing of the extremely important contract for Cyprus is expected to take place in Nicosia next week. The joint venture between China Petroleum Pipeline Engineering and METRON, Greece, is expected to work with the Chinese Hudong-Zhonghua Shipbuilding Shipbuilders and Norwegian Wilhelmsen Ship Management Norwegian shipowners to convert the ship to a floating gas storage and gasification unit (floating LNG unit), to be installed at port-specific facilities to be constructed by the consortium at Vasilikos.



The casinos to bring in more than €20m for the state

More than €20m will go towards state funds as a result of the operation of the casinos in Cyprus. Specifically, the state will receive €15m from the casino tax and €5m from the annual fee. During the discussion for the budget of the National Gaming and Casino Supervision Commission, the president of the Authority, Christos Mavrellis said that the annual fee for the satellite casino in Nicosia stands at €2.5m, while for the rest of the cities it amounts to €500K. DISY MP, Onoufrios Koulla said that there are demands to change the specifications of the Larnaca, Ayia Napa and Paphos satellite casinos and make them like the Nicosia casino. Mr Mavrellis said that in order for this to happen, the legislation has to change. It should be noted that the satellite casino in Nicosia has 5 gaming tables and 50 slot machines, while the rest of the satellite casinos only have slot machines. In the meantime, international companies are expected to conduct due diligence assessments for the junket operators that will cooperate with the casino-resort in Limassol, the City of Dreams Mediterranean, which will open its doors in the end of 2021. The junket operators will organise trips to Cyprus for tourists who want to play at the casino. According to Mr Mavrellis, the Commission has already reached a deal with companies from the US, the UK as well as a company from Malta and Cyprus.



Sparkling Christmas at Cyprus Casinos

Christmas is just around the corner and Cyprus Casinos (C2) is getting ready to welcome the festive season with lots of events, activities, and fun creating a unique entertainment experience for its visitors. Cyprus Casinos has teamed up with the world-renowned Swarovski brand to create the most sparkling Christmas trees in Cyprus, which will be decorated with more than 700 Swarovski Crystal ornaments and will adorn the entrances to both C2 Limassol and C2 Nicosia. The display is made possible through the generous sponsorship of Vassos Eliades Accessories Ltd. Cyprus Casinos will celebrate the beginning of the holiday season on Thursday, 5th December 2019 at C2 Limassol and C2 Nicosia, with the Swarovski Christmas tree lighting at 5pm, live entertainment, Christmas treats and free giveaways for patrons. Following the celebration, Cyprus Casinos will continue to offer festive activities including Festive Feast buffets, welcome drinks and tray service throughout the holiday season until early January. In accordance with Cyprus rules and regulations, entrance to Cyprus Casinos (C2) is limited to people over 21 years old.



A platform for comments for tourism

Different government departments are issuing calls for tenders on a daily basis, in order to enhance their communication with the citizens, while they’re also investing in their digital transformation. The Limassol Municipality is calling interested parties to submit an offer for services for communication support and promoting the Municipality also for projects that are co-funded. The project is expected to amount to €110K and includes business consultancy services, management consultancy services and marketing and PR consultancy services. Moreover, the National Betting Authority announced a tender for the provision of Communication services and promotion of the National Betting Authority, worth €160K. The Authority wants to purchase advertising and marketing services, and streaming services for TV and radio shows. At the same time, the Deputy Ministry of Tourism announced a tender for the purchase of Online Reputation Management solutions. The offer amounts to €356K.



ILIFE-TROODOS photo exhibition

Selected works of photographers who participated in the Photography Competition with main theme ‘Troodos, it’s in our nature’, organized by iLIFE-TROODOS project are exhibited from November 25, 2019 at the Amiantos Botanical Garden AG Leventis. The exhibition includes 19 photos and selections that were made with the aim of capturing as much as possible the elements of biodiversity of the Troodos National Forest Park and its ecosystems. The competition was held in collaboration with the Photographic Society Cyprus of Nicosia for the purpose of highlighting the intrinsic natural value of the Troodos National Forest Park ecosystem.



Intensive checks at the Zenobia wreck in Cyprus

The Cyprus Port and Marine police is conducting checks and inspections of vessels that carry passengers for diving in the Zenobia ship wreck site at Larnaca in order to limit anarchy and to restore the rule of law in particular, in terms of diving, as it was mentioned by the Minister of Justice, George Savvides.  In his letter, the minister answers questions raised by George Perdikes, leader of the Cyprus green party on the current situation at the wreck and the measures taken as a result of the diving accident that happened last September.



Remedica shows its love to the environment

In the spirit of raising environmental awareness, and in the framework of its efforts to encourage protecting the environment and promoting sustainability, the top Cypriot pharmaceutical manufacturer Remedica, which was recently awarded the “Gold Protector of the Environment”, organised a tree-planting event in Limassol on 23 November 2019. This specific action was not just in the context of its Corporate Social Responsibility. Remedica’s people united their strengths and passion, and contributed to the creation of a sustainable environment for future generations. They planted many trees, making the area prettier and more pleasant.

 

Cyprus will assess applications for marketing authorisations of medicines

Starting 1 January 2020, the Pharmaceutical Services will take up the role of a reference country for applications to receive marketing authorisation for medicines. Through the procedure, applications for marketing authorisation can be submitted to more than one member state. The resulting marketing authorisation will be applicable in all the member states that were involved in the process.



Prevention campaign against oral cancer

The Ministry of Health is carrying out an awareness & prevention campaign against oral cancer between 2 – 8 December. It’s worth noting that in Cyprus there were 612 new cases of cancer on the lips, tongue, mouth, salivary glands, tonsils and oropharynx, between 2000 – 2016. According to the Ministry of Health, oral cancer and oropharyngeal cancer is the 8^th most common cancer in Europe. The risk of developing oral cancer increases significantly over the age of 40, while smoking is a serious risk factor.



The benefits of quitting smoking and your “allies” during this process

Autumn is undoubtedly the ideal season for new beginnings and adopting positive daily habits, which explains why many people decide to rid themselves of the annoying and harmful habit of smoking. If you’re trying to quit smoking, it’s very likely that you’re worrying whether you’ll be able to remain focused on your goal, because despite knowing it’s harmful you’re addicted to it. Quitting smoking may be hard, but there are many modern options to help you quit. Before you start this procedure however, you need to be determined and sure of your decision. It’s really important that you also find the right “allies”, as there are many nicotine replacement therapies out there and you need to find the product that works for you. There is nicotine gum, oral nicotine spray, and nicotine patches. When you’ve found the product best suited to your needs it’s important to also make changes to your daily routine, changing the habits that you’ve associated with smoking.



Özersay: Ready to collaborate on migration issue

According to the T/C press, while commenting on the new measures implemented by the Republic of Cyprus on crossing points, Kudret Özersay stated that if the intention behind this action is to tackle the migration issue, then the T/C side is ready to cooperate and help. He said the T/C side is monitoring the new measures and if the G/C side is using this as an excuse to negatively affect the occupied areas and harm their economy, then they’ll also have to take measures to hurt the G/C side. He said that this is not what they want, and hopes that they won’t be compelled to do so.