In the press today:
New warning by Moody’s on foreclosures
Phileleftheros reports on Moody’s warning. Phileleftheros also reports on a letter sent by Cyprus Bank Association’s to the House, which was signed by the Chairman of the Association, Ioannis Matsis, supporting that the amendments to the law, are not benefiting the majority of borrowers, but rather the strategic defaulters, who will have the opportunity to postpone and delay the foreclosure process. At the same time, the Association stresses that the changes will have a negative impact on the country’s financial stability and economic and business activity. They also support that the changes create a significant financial burden for the taxpayer, the shareholders/depositors and the majority of current and future borrowers. The Association stresses that for the banks, auctioning a mortgaged property or its acquisition, is always used as last resort so as to recover or repay a loan. The Association concludes by repeating its commitment, it gave the House that they will not proceed with foreclosures of primary residences in cases where the borrower may be eligible for Estia. At the same time KEVE along with the Central Bank, the Financial Ombudsman and other bodies, are pushing so that the amendments to the foreclosures procedure are implemented within the interim period until the House re-opens. Furthermore, KEVE intends to request a veto by the President of the Republic, due to the impending risks for Cyprus’ credibility and the stability of the banking system, which according to the organisation must be safeguarded so that the banks can continue financing the country’s progress and growth.
Banks state their commitment to not proceed with foreclosures for Estia-eligible loans
Haravgi reports on the Cyprus Bank Association’s letter, mentioning that it also said that the changes could have consequences for the RoC, since the terms of the Republic’s agreement with the European Union for state aid (in the context of the Co-op-Hellenic deal) are violated. They also report that the changes could potentially negatively affect the new stress tests of the banks.
Wine-village residents on pins and needles
Phileleftheros predicts that if a decision by the BoD of Hellenic Bank to shut down their branch in Pachna is implemented, then the residents of the wine-villages will react against this. The residents of the area believe that the closure of the branch, will create an adverse situation. Residents are already reacting and report that the only Hellenic Bank branch serving the wider wine-village area will close down. It seems that the residents have the support of the local authorities and Limassol’s MPs, who say that they will not accept such a development and warn with a strong reaction, in the case where the competent authorities ignore the problems that will be created. DISY’s MP, Andreas Kyprianou sent a letter to the Bank’s board, stressing that the specific branch serves thousands of wine-village residents, stressing that the development of Western Limassol and the wine-villages, will definitely need to be backed by the banks. Local authorities are calling on Hellenic Bank to reconsider, telling them to take into account that no bank branches (of Hellenic or another bank) are currently operating in the area. Pachna’s community leader told Phileleftheros that the specific branch serves 20 communities and 6.000 residents.
Holiday Homes for all budgets
Phileleftheros Insider reports that there are many holiday homes and apartments for sale, in Paphos, Ayia Napa, Protaras and Limassol for all budgets (between €40.000 – €9.7m). Most of the properties, that were acquired in exchange for debt by Bank of Cyprus, are offered through its Real Estate Management Unit (REMU), are located in Paphos as it is a district that had a huge construction momentum. There are apartments in tourist complexes, villas, small houses and the most of them have pools. Hellenic Bank’s APS, also has plenty of holiday homes in its portfolio. Its website lists a two-bedroom house in Tala with a total area of 1.078sqm, which is for sale for €191.600. A condo and two apartments are also for sale in Paphos (their prices are €132.000, €83.000 and €106.000). The complex is about 10-11years old and has two common-use external pools and a secure entrance. APS also lists a villa in Chloraka for sale, in a 1.109sqm plot, covering an area of 188sqm; its selling price is €672.800. Four houses in Kisonerga are for sale for €664.400. A 374sqm-luxury villa with a pool, a garage, covered verandas is up for sale for €470.000. Moreover, a complex consisting of houses, apartments, and maisonettes with common-use pools, a playground and common spaces, is being sold in Mandria.
CEOs handed silver spoons…
The salaries of top bank executives in Cyprus range from tens of thousands to a few million. Data from 2018 annual reports and corporate governance reports show that the remuneration of senior bankers is high but varies. In his last year as Bank of Cyprus CEO John Hourican’s annual remuneration was €2.3 million while the second senior manager Deputy CEO Christakis Patsalidis, was earning €212,000. It is still unknown what the new BoC CEO Panikos Nicolaou will be earning. Hellenic Bank’s CEO Ioannis Matsis was getting a total of €530,000, while CFO Lars Kramer’s annual salary was €497,000. RCB Bank data shows that the annual remuneration in 2018 of executive directors and the executive team as a whole amounted to €9.7 million. Specifically, four top bank employees earned over €1 million each in 2018. One of them was getting between €1-1.5 million, another was getting between €1.5-2 million and two more were earning between €2-2.5 million. RCB’s CEO is Kirill Zimarin. The Eurobank Cyprus annual report for 2018 shows that a fee of €945,000 went to top executives. The CEO is Michalis Louis. Last year, Alpha Bank Cyprus paid board directors a total of €720,000. A total of €531,000 went to salaries for executive directors. The Bank’s CEO is Constantinos Koutentakis. Executive directors of National Bank of Greece (Cyprus) last year were remunerated with a total amount of €304,000, of which €78,000 went to members of the Board of Directors. The Bank’s CEO in 2018 was Christodoulos Christodoulou who recently took over as Chief Financial Officer of the National Group. Marinos Stratopoulos is the new CEO of the subsidiary in Cyprus. Executive directors at Ancoria Bank received a total of €386,000 in 2018. CEO is John Loizou. Astrobank and cdb bank have yet to publish their 2018 annual reports.
DISY and AKEL see the issue in a different light
The consistent borrower shouldn’t be the fool of the group in Cyprus, stressed Averof Neophytou, president of DISY, commenting on the changes to the foreclosures law. In a written statement, Mr Neophytou stresses that he has the utmost respect for the majority of the House and that he understands the struggle of the Cypriots who have trouble paying back their loans. However, he stressed that the priority of DISY and the government is the stability and credibility of the country, the economy and the financial sector. He also underlined that any changes that are put forward without prior cooperation with the institutions, do not benefit the borrowers, adding that what they only achieve is to harm the credibility of the country and the economy. On its side, AKEL, via the spokesman of the party, Stefanos Stefanou, said that the government’s responsibility with regards to the foreclosures and NPLs issue is huge. According to Stefanou, the government and DISY, with the policies and law they passed, bred the arbitrariness of the banks at the expense of the borrowers, leaving the non-viable borrowers unprotected, while they didn’t facilitate viable debt restructuring schemes, they protected the strategic defaulters and left primary residences and small professional homes, exposed.
RoC waiting EU’s reply on ferry link
The RoC is expecting a response from the European Commission in regards to its request to establish a ferry link between Cyprus – Greece, said the Deputy Minister of Shipping Natasa Pilides. She noted that depending on the response, they will submit another request accordingly. Ms. Pilides was speaking yesterday, following a meeting with the president of the Citizens’ Alliance Yiorgos Lillikas and the representatives of the party. She said “The shipping industry is promoting some changes that we consider as very significant in the effort to empower our competitiveness. This is why it is important for us to inform the parliamentary body and have their support, so as to move to the next stage, during which we will attract more companies to our shipping hub. We move forward with the growth that has been achieved in the past few years”. She added “Depending on the EU’s reply, we will have to adjust our next request accordingly, thus we must prepare”.
Strong shipping bond between Cyprus-Italy
A conference under the name “Business activity in the shipping industry” was held on 29 May at the Amathus Beach Hotel in Limassol, promoting the business and trading relationship between Cyprus and Italy. The conference was addressed at businesspeople and investors who wish to benefit from important opportunities, emerging from the business consolidation in the world-renowned and developed shipping industry of the RoC. A series of speeches were held in the framework of the conference, which focused on new developments in the industry, the legal and fiscal framework in Cyprus and Italy etc. There were also meetings between businesspersons, in view of developing and strengthening relations between Cypriot and Italian businesses.
New classes in Technical Education
Phileleftheros reports that Secondary Technical and Vocational Education will “welcome” the new school year with two new classes: Maritime professions and Cosmetics. According to the Ministry’s announcement, the Maritime professions will be available in Limassol, and they will provide various specializations within the industry, which have been developed through their collaboration of the Deputy Ministry of Shipping, Sailors and Ship engineers. The Cosmetic classes will be given in Nicosia. Upon their entry into the labour market, individuals with this qualification can work as assistants to beauticians or follow further studies of the industry in tertiary education.
Clearing the air about Larnaca port – marina
Due to important changes to its original composition, the consortium investors interested in the development of the Larnaca port and marina, will have to resubmit their proposal on Friday, 26 July 2019 to the Ministry of Transport. According to Phileleftheros’ sources, two out of the three big members left the consortium KITION OCEAN Holding (AMPA LTD and ISRAEL SHIPYARDS LTD).
PASYXE Famagusta calls on State to protect the area’s tourist experience
PASYXE Famagusta called on the State to protect and improve the conditions of the tourist experience and the level of services in the area, so as to further develop Famagusta. In a written announcement, the association states that “a large majority of visitors in tourist areas have great holiday experiences and despite the fact that there is still room for improvement, their visit to Cyprus takes place in safe conditions. In general, the majority of employees and businesspeople should also be satisfied, despite the occasional fluctuations”. PASYXE Famagusta expressed the belief that the State needs to establish structures, in order to effectively solve the issues of the public sector, and for this, efficient legislation, prevention and supervision is needed.
Potential to target French market in cooperation with Lebanon
The Deputy Ministry of Tourism is trying to attract a larger number of tourists from Central Europe. “We’ve had a lot of contacts with airline companies and travel agents and in two months we will have clearer picture about their flight schedules”. Mr. Perdios stated that it’s a plus that they have already met and talked with the companies, before they made their schedule. Now all that they have to do is wait to see if they were convinced. If there is a adequate connectivity, then the number of tourist arrivals from the Netherlands, Austria, France, Germany and Poland will increase. The Minister Vasiliki Anastasiades said that the connectivity issue is a great concern for the Ministry of Transport, and she intends to talk with the EU in order to retrieve possible funding for certain routes. Mr. Perdios also shared an alternative plan, beyond the direct route scenario. “Lebanon has a great relationship with France and we could benefit from Lebanon’s current flight schedule with France (5 flights per day), to bring French tourists to the Cypriot market”, he stated.
GHS software update tackles drug shortages
As of today, pharmacists will be able to use the upgraded software, which is expected to tackle 80% of the shortages in widely-used medicines. Essentially, from today pharmacists will be able to replace any medicine (which is prescribed by the GHS doctors and is in short supply) with a more expensive drug. Up until today, the software did not allow for this. Subsequently, according to the president of the Pharmaceuticals Association, Elena Piera Isseyek in most cases, the shortages are fictitious. There are exchangeable medicines available, but we couldn’t replace them and serve patients through the software. This update is only temporary and will last until the pharmaceuticals market has stabilised, while the HIO will be observing the pharmacists’ activities very closely, in order to avoid a potential abuse of the system. It should be noted that according to GHS regulations, the pharmacists are only able to provide exchangeable medicines that are cheaper than the ones prescribed by the doctors.
The healthcare system’s biggest bet are the pharmaceuticals
Phileleftheros reports that pharmaceuticals are the biggest bet for GHS at the moment, as problems emerged immediately following the system’s implementation, and these need to be solved swiftly with no delay, given the instability in the market and patients’ dissatisfaction. The Health Ministry, the HIO and OKYPY have already taken their decisions, following communication with authorised parties of the private sector, and they expect that these will be implemented by next September. Time is ticking, especially given the fact that according to the initial plans, until now state pharmacies have been significantly supporting the private sector in terms of drug shortages, but will soon stop their operations. Only 15 state pharmacies will remain in operation; these are located in rural or isolated areas, where there are no private pharmacies. Those pharmacies are being upgraded so that they will operate according to the standards of the private sector from 1 September. Moreover, 250 medicines were excluded from the GHS because their Marketing Authorisation Holders (MAH) are not interested in including them in the system. The Ministry has ensured access to all of these medicines for the next 6 months. 52 of these medicines are not adequately exchangeable and as such, the Ministry secured large quantities. For the remaining medicines, there is a sufficient number of appropriate substitutes. Also, the evaluation & incorporation of 180 medicines – which were only available in the private sector – is still in progress. The Pharmaceutical Committee has said that they have already evaluated most of them and committed to complete the procedure by the 1st of September.
End of an era for state pharmacies
The State Health Services Organisation (OKYPY) does not intend to postpone the operation of state pharmacies after the 31st of August. Already, preparations for the shutdown of the state pharmacies have already begun, while the discussions on the matter have intensified over the past few days. In the first one and a half months of GHS, it appears that the majority of beneficiaries opt to receive their medicines from private pharmacies, while the discussions have focused on the pharmaceuticals supply in the state pharmacies. Already the HIO has decided to purchase widely-used drugs which are in short supply, and distribute them to private pharmacies.
OKYPY takes action after wave of complaints
OKYPY’s spokesperson, Charalambos Charilaou, told Haravgi that OKYPY welcomes the wave of complaints by organised patients. Mr. Charilaou highlighted that the GHS is the biggest reform of the Healthcare sector of Cyprus, and that they were expecting challenges during the first weeks due to the creation of a new environment which has new needs. He acknowledged the current technical difficulties and referred to the measures that have been taken in order to tackle them. Meanwhile, Mr. Charilaou responded to complaints raised by organized patients as it comes to doctors that refuse to use the GHS software for prescriptions and appointments. However, he said that these isolated incidents, and stated that OKYPY’s staff are using HIO’s system. He added that these complaints are indeed taken seriously, and they will not be ignored. On the other hand, the Cyprus Association of State Doctors (PASYKI) regrets the latest developments, and wonders whether these complaints were investigated at all, in order to avoid giving the impression of a one-sided approach. They also asked the Health Ministry or OKYPY to give an official position on the matter.