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Daily Press Review – 2/4/2020

In the press yesterday and today:

Banks issue clarifications for suspension of loan instalments

Banks issued clarifications on the application process for the postponement of loan instalments. With an announcement, Bank of Cyprus reported that the customers served by the branch network must send their completed application to the email covid@bankofcyprus.com. Businesses, clients can proceed with their application to postpone instalments for the loans that were posted on https://www.bankofcyprus.com.cy/covid19_loans. In an announcement, Hellenic Bank says “we call on our clients to ensure the timely submission of the relevant application, before their instalment is paid. Clients are called to complete their application that can also be found at www.hellenicbank.com/covid19. Borrowers that are businesses or self-employed and meet the above condition can also apply to postpone the obligation to submit a financial statement for 2019”. KEDIPES informs its clients that applications can be sent through email, post, fax or delivered to one of the service centres. The document has been posted on KEDIPES’ website www.kedipes.com.cy. The article goes on to say that AstroBank has also posted the declaration of interest document as well as a memo with clarifications.


Hellenic Bank: Hundreds of applications processed from day one

Hellenic Bank’s clients have submitted hundreds of applications, requesting a postponement of instalments to their commitments. The Bank’s machine responded swiftly and all the applications were processed from day one. It should be noted that beneficiaries can submit an application to postpone their instalments to their commitments given that these did not have a delay of over 30 days on 29 February 2020. The Bank, in an effort to help its customers further announced that those who send their application by 28/04/2020, then the instalment will not be paid from the decree’s date of entry into force, i.e. 31/03/2020.


Thousands of borrowers rush to apply for loan instalment suspension

Tens of thousands of bank customers rushed to apply for the postponement of loan applications by 2020. Up until 15:00, applications at Bank of Cyprus from businesses and households exceeded 2,000 and the prediction is that these will continue to grow. Through the call centres, the customers were informed that the quicker and simpler solution was to send an email or fax. Phileleftheros reports that the measure was also taken advantage of by the clients of the banks whose incomes weren’t affected by the crisis due to the coronavirus pandemic. The article goes on to report on the clarifications issued by the banks, including Hellenic Bank.



CCLEI records the predicted recession due to coronavirus

The Cyprus economy had a positive momentum until the outbreak of the coronavirus crisis, according to the results of the Cyprus Composite Leading Economic Index (CCLEI) for February 2020 and the preliminary results for March. The reversal and downward trend of the index foreshadows the imminent significant decline in the GDP due to the very important consequences of the COVID-19 pandemic in most sectors of the Cyprus economy, the announcement notes. The Index is prepared by University of Cyprus’ Economics Research Centre (CypERC) and is sponsored by Hellenic Bank. It should be reminded that the Index records the trends of the economy on a monthly basis. The Index exhibited a Year-over-Year (YoY) decrease of 0.2% in February 2020 reaching a level of 113.1, following decreases of 1.1% in January, and 2.3% in December (based on the updated data). The slowdown of the reduction shows that the Cyprus economy would have continued its developing dynamic over the next few months, if the coronavirus outbreak hadn’t happened.


A test for public finances

Cyprus’ public finances are being tested due to the coronavirus pandemic. Sooner or later, the scientific and medical community will be take the appropriate actions, as will the state, and its spread will be limited. However, what Cyprus will need to face are the economic consequences of the coronavirus, with 2020 seemingly recording a recession. In other words, Cyprus is expected to record a negative development index for the current year. “At least 5%”, as the Minister of Finance Constantinos Petrides distinctly said. No one knows how long this “economic isolation” will take, however the damage has already been done, and already recovering seems like a difficult task, if the situation continues for many months. The state has pledged most of the economic weapons it initially had, in the €800m support scheme it announced. The cash flow it made available to support the economy through the special unemployment benefit, the partial suspension of businesses and other similar measures, it is evident that if the same “economic isolation” goes on for more months, the Government will require more lending. The article goes on to report on the state’s financial needs that amount to €900m including the repayment of a €750m loan to Hellenic Bank, local bonds amounting to €20m and some “other loans” as described in the timeframe for the repayment of the general government debt amounting to €90m.


Herodotou: lend with low interest rates and no fees

The banks should provide new overdraft facilities or short-term loans with low interest and not burden applicants with banking fees, the Central Bank governor Constantinos Herodotou said. With a circular, he said that the invoicing of new credit facilities under the above categories as well as any fees for a contract agreement should take into account the critical situation and the need to channel liquidity into the real economy under beneficial terms, also given the relaxed requirements of the ECB. The Banks need to get supporting documents by the applicant so that they can prove they are eligible. To that end, the self-employed are called to submit a declaration signed by a certified accountant that will certify the reduction of their turnover.


AstroBank: Suspension of loan instalments enters into force on 30 March

Focusing on protecting its customers and personnel, AstroBank announces that it has activated the Expression of Interest mechanism for the suspension of loan instalments based on the Legislation and is already processing the relevant applications by the customers. The Bank’s effort is to exclude all the possible occasions of clients visiting the Bank’s customer service points as well as to avoid increased traffic and any violation of the Health Ministry’s directives.  As such, in order to facilitate clients, the suspension of loan instalments and interest will be implemented as of 30 March, as stipulated in the relevant decree, even if it is submitted later on.


cdbbank: services for the suspension on loan instalments and interest

Cdbbank wishes to inform its customers that following the approval of the law and the relevant decree by the Minister of Finance dated 30 March, they can immediately submit their applications to suspend loan instalments. It should be noted that based on the relevant decree, self-employed natural and legal persons and businesses that didn’t have a 30-day delay in paying their instalment on 29 February, are eligible to submit an application. The above extraordinary measures will last from 30 March 2020 until 31 December 2020.


€16b worth of loans eligible for instalment suspension scheme

The Ministry of Finance estimates that the scheme suspending loan instalments for nine months can cover loans of over €16b. It is noted that based on Central Bank data, credit institutions have a total of €33.6b worth of loans in their balance sheets, while there are more than €15b in credit acquiring companies, servicers, insurance companies and the Cyprus Land Development Association. As the Finance Minister said yesterday, there are people who do not want a unilateral instalment suspension. There are many public employees, supermarkets, businesses who want to continue to pay


DP World Limassol: Digital transactions

DP World Limassol announced the launch of two new digital payment solutions to be applied across the business for all of its customers through the JCC Portal, allowing for convenient and secure ways in conducting transactions. Customers will be able to carry out payments through JCC’s online portal* while any invoice can now be paid through JCC Smart methods. DP World continues to strongly encourage the use of digital channels and services in an effort to reduce unnecessary exposure during the global COVID-19 pandemic. DP World Limassol CEO, Nawaf Abdulla said “Our customers are at the heart of everything we do. DP World Limassol constantly strives to make life easier and more convenient for our customers with a seamless experience while continuing to deliver the same level of service excellence”. He continued “The safety, health and wellbeing of our employees, partners and customers has always been our top priority. Since the outbreak of COVID-19, we have been facilitating remote work, while we are at the same time adjusting to minimise business disruption. These new payment systems reduce the need for physical transactions to be made therefore reducing unnecessary exposure for customers and staff.” DP World Limassol has activated robust contingency plans to ensure service continuity for our customers. Currently, all trade enabling activities and quayside operations are being carried out as normal. DP World Limassol will continue to seek guidance from public health officials and government agencies on an ongoing basis.




Swords out against Greece and Cyprus with new drillings

While the rest of the world is fighting to contain the coronavirus, Ankara has announced its new plans to explore for natural gas in the Eastern Mediterranean and the Black Sea. In a front-page report, pro-government Turkish newspaper Turkiye accuses Greece of taking advantage of the focus being on coronavirus to expand its maritime zones in the Eastern Mediterranean. Invoking the Turkish Energy Ministry, the paper reports that that Ankara has defined the coordinates for its natural gas drilling in the East Med for the second half of 2020. The drilling will be carried out by the Kanuni drillship. The paper says Turkey was mobilised after Greece sent a charter to the EU about its maritime zones. The Turkish Energy Ministry, it said, defined the coordinates of its drilling as a response. It also reported that the Fatih drillship will carry out drilling in the Black Sea, in the second half of 2020. It added that the Yavuz continued its drilling off Cyprus, while the Oruc Reis and Barbaros research vessels continue their activities without interruption. It further reports that all measures for the coronavirus are being taken on Turkey’s drillships and research vessels, adding that the Fatih, which has completed its operations in the Eastern Mediterranean, has docked at Mersin port and the crew have gone in 14-day quarantine.


Proposal by LNG giant

Denmark-based LNG giant Hoegh LNG has submitted a proposal to Cyprus’ Energy Regulatory Authority, seeking a permit along with Cypriot companies VTTV and H4E GasFuel Ltd to bring a specially-designed ship for storage and gasification to Vasilikos, so that Cyprus can use it for electricity production. According to the application, the ship will be able to produce 250 million metric cubic feet of natural gas a day. Hoegh LNG Holdings Ltd announced yesterday that it submitted the application. The company’s plan is to install the floating FSRU unit by the VTTV jetty in Vasilikos, “as a fast solution for the required change of fuel, reducing gas emissions, reducing the gas emission taxes to the EU, allowing for fuel cost savings and reducing the price of electricity per kilowatt for local consumers”. The application will be examined by the government, with a source telling Phileleftheros that certain parameters need to be taken in to account, such as whether a swift interim solution like this should go through a tender procedure.


Arrivals by exception, without the necessary certificate

Haravgi newspaper claims that flights are arriving in Cyprus transporting passengers from abroad who do not have the relevant health certificates proving they do not have coronavirus. It says it contacted Transport Minister Yiannis Karousos to inquire about this, but there was no response. The paper says the number of people arriving on the island is increasing daily, despite the government decree banning all arrivals bar exceptions up until 30 April, with arrivals obliged to present a health certificate


Five-star hotels accommodating nurses

Cyprus’ hotels are showing a different side to them. Invel Real Estate, main shareholder of Prodea Investments and in extension The Landmark Nicosia and Aphrodite Hills Resort, has donated equipment worth €110,000 to the Organisation of State Health Services to help cover the needs from the spread of coronavirus. Furthermore, The Landmark Nicosia has made a number of rooms available to accommodate doctors and nurses on the frontline. Meanwhile, Louis Hotels has also made the Hilton Nicosia Hotel available for medical staff, who are not able to go home to their families as they do not want to put them at risk of catching the virus.


Last-minute tourism, only if

Cyprus hoteliers believe the hotel industry needs specialised measures in order to deal with the unprecedented crisis brought on by the coronavirus outbreak. Speaking to Phileleftheros, the director of Tsokkos Hotels, Chryso Tsokkou, said the main thing was to protect everyone’s health. “The impact on tourism will be deeper and the aim will be to come out stronger from this crisis,” she said, adding that drastic measures will have to be taken in order to effectively deal with it. “We need to realise that there will be a chain reaction of consequences on the economy. The hotel industry will need help, in order to in turn help the workers, suppliers and tourism shops, restaurants etc.” she said. She also suggested that promotional campaigns are stepped up, like what is happening in Portugal with its “Can’t Skip Hope” campaign. Thanos Hotel CEO Thanos Michaelides said that it will be extremely difficult for hotels to open in May, adding that it was impossible to make any plans at present. “Regardless of how we will manage this as a country, it will also depend on how Britain and Russia will handle it, as our main markets. Britain is estimating that the situation will be brought under control in June. If the Brits don’t go on holiday, then our hotels will not open. The same applies for Russia,” he said.


JET2: Closed until 17 June

Cyprus’ main economic pillar, tourism, is currently on hold, as hotels receive cancellations on a daily basis. They are concerned about when their hotels will open, with travel agents saying that they will be able to start making reservations again after June. According to Phileleftheros’ sources, foreign travel agents have started informing hoteliers about what the future plans are. TUI announced that it is suspending the majority of its activities, including organised trips, cruises and hotels. Yesterday, JET2 Holidays announced that it will suspend all operations until 17 June. In fact, it has informed hoteliers that it intends to focus on 2021. This sounded alarm bells for hoteliers, who are worried about this year’s tourist numbers. Parliament has approved funds of €11m aimed at helping tourism recover.  The World Tourism Organisation estimates that the pandemic will lead this year to a 20-30% drop in tourist arrivals, while revenue is expected to drop by $300-450 billion.


The coronavirus delays the opening of the casino-resort

The casino-resort City of Dreams Mediterranean in Limassol is one of the projects affected by the government’s strict measures in the effort to curb the spread of the coronavirus. The construction site of the casino-resort, like many other construction sites, have halted their operations which will cause delays in the completion of the project. The casino was originally set to open its gates in December 2021, however, it appears that it will be delayed. According to Phileleftheros’ sources, the ICRC consortium, made up of Melco Resorts & Entertainment Limited and the Cyprus Phassouri (Zakaki) Limited, member of the CNS Group, is expected to ask the government for an extension. The consortium has already instructed the contracting company to submit a new plan on how it will cover the works due to the suspension of operations at construction sites. Meanwhile, Melco’s annual report refers to the risks that will emerge as a result. The development of the City of Dreams Mediterranean faces significant risks that could adversely affect the business, its financial situation, and the results of its operations. At the same time, it notes that Melco cannot guarantee that it will secure the additional capital investment, including the funding required for the ongoing development of the project. “We may also require additional financing to develop our projects; our ability to obtain such financing depends on a number of factors”, it points out. In addition, the City of Dreams Mediterranean may be subject to additional risks due to a shortage of labour workers, something that has been exacerbated by the pandemic. It also stresses that if the suspension of the construction continues after 13 April, there will be significant delays. “These uncertainties increase the risk of the project not being completed on time, which will increase construction costs”, it adds. In fact, Melco warns that if the Republic of Cyprus does not grant the extension, it risks fines of €10,000 per day, while if the delay exceeds 100 business days, it risks having its license revoked.


Greece: Gambling agencies are counting their losses

Gambling agencies in Greece have suffered significant losses due to the restrictive measures for the coronavirus pandemic. The closure of OPAP stores and the ban on sporting events, which have affected betting sales, led to a sharp decline in revenue and profits. It is estimated that bets of €40m and gross revenue of more than €6m are lost on a daily basis. At the same time, the Greek State loses about €2m taxes per day. OPAP is promoting online games Pame Stoixima and Tzoker, but it is difficult to make up for the sales of 4,000 agencies and around 370 OPAP play stores. The situation is difficult for the casinos as well. The TGR turnover has been brought to zero, but also the gross gaming revenue (GGR). The casinos, of which most are already having significant problems, are losing €4.6m worth of bets on a daily basis, of which bring about €680,000 GGR and €240,000 in taxes. The country’s largest casinos in Parnitha, Thessaloniki and Loutraki have sustained the greatest losses. Online gambling providers have been affected the least.

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