Real Estate market still at high risk
The willingness to provide new loans, doesn’t mean that credit growth will take place according to the terms of the past. From the podium of the 13th Land Development Conference, two top bankers, the next CEO of Bank of Cyprus, Panikos Nikolaou and the Business General Manager of Hellenic Bank, Phivos Stasopoulos spoke about the need for cautious lending”. Real Estate is still a risky sector. “Even if the real estate market is improving, there is still a long way to go for stabilisation”, Nikolaou noted. What has been observed over the past few years was a boom and a sudden drop in the real estate market. The banking sector can invest in granting mortgages but lending to real estate developers is not a priority. “The loan portfolio needs to be cautiously expanded and the real estate sector is not a priority for this active increase”, Stasopoulos mentioned. “Any initiatives in the real estate sector must be undertaken with caution, since the prices of privileged properties are improving, while the rest are not increasing”, he added.
Waiting for ESTIA
Politis’ article reports that while the Canadian rating agency, DBRS has signaled that NPLs must be further reduced, Cypriot banks are determining their own ambitious goals, in view of the Estia Scheme. The second semester of 2019, will come to be the last round for NPLs, as the banks as well as KEDIPES are expecting the introduction of the Estia Scheme. DBRS, in a memo they published yesterday on household NPLs, note that the government expects that Estia will absorb up to €3.4b worth of NPLs. The most important factor however for the banks, is that with Estia not only will they be able to render non-performing loans into performing loans, but they will also be able to clarify the framework in which they will proceed. People who aren’t eligible for Estia, will be presented with limited but nevertheless clear choices. Politis’ sources report that apart from a boost in foreclosures, banks will be more aggressive with regards to selling off loan portfolios and even more competitive in providing new loans. According to Central Bank data, NPLs were reduced by €10.4b in December 2018. As DBRS reports, the biggest reduction resulted from the absorption of the Co-op’s business by the state and Hellenic Bank in September 2018, while €5.3b NPLs were absorbed by the state. They also mention the selloff of €2.7b-worth of loan portfolios by Bank of Cyprus to Apollo.
DBRS: De-escalation of NPLs in Cyprus
DBRS is expecting an improvement in the reduction of NPLs in Cyprus, in view of the upcoming Estia Scheme, the banking sector’s continuous efforts, the reduction of unemployment, the increase of property prices and stable economic growth. The rating agency notes that Cyprus recorded significant progress in mitigating the vulnerabilities of the banking sector, reflecting the increased efforts by the government and the banks. The liquidation of the Co-op and the selloff of loans by credit institutions, almost halved NPLs in the banking sector in 2018. According to Central Bank data, NPLs were reduced by €10.4b in December 2018. The biggest reduction resulted from the consolidation of the Co-op which was completed in September and concerned the selloff of a part of its business to Hellenic Bank.
Preliminary work for Co-op criminal investigation
Politis reports that the criminal investigation into the Co-op, is rather complicated. However, apart from the complexity of the cases another issue has emerged, as it comes to the staff that is able to work on this investigation. Yesterday, the Attorney General met with the Chief and Deputy Chief of Police and discussed a wide range of issues that have to do with the economy as well as the collapse of the Co-op. As Politis learns, the two sides agreed to sort out all the pending financial cases, either these are being examined by the Legal Service or the Police, in order to free more investigators who can work on the Co-op case. The Police is already examining the AG’s letter, which set out the instructions on the criminal investigations as well as the findings of the Co-op probe. At first sight, it seems that investigators have already worked on some cases, which had to do with older allegations for irregularities in Cooperative Credit Institutions. This existing work will be utilised and enhanced, in order to support the cases in legal proceedings.
Joint venture for Larnaca port
The Ministry of Transport received a proposal for the state’s contribution in setting up the consortium that will assume the development of the port and the Larnaca marina. The consortium will be comprised of an Israeli company that will be responsible for the technological operations of the port and development of marina, two foreign companies that will develop the surrounding area, and Cypriot land developers. The said consortium must proceed with a proposal to negotiate the assignment of the mixed development of the Larnaca port and marina. The proposal was submitted to the Ministry of Transport, with a document by the legal advisor of the port’s importers-exporters and was shared with the President and the Larnaca Mayor. However, no reply has been given so far.
Agreement signed in Cairo on electric interconnection
An agreement for the electric interconnection between Cyprus-Egypt was signed yesterday in Cairo. The agreement was signed by the Chairman of the Egyptian Electricity Transfer Company (EETC) Sabah Mashali and the CEO of the Euro Africa Interconnector, Nasos Ktorides. This agreement is expected to be implemented as soon as possible, as this is the goal of both Cyprus and Egypt. This project will be completed in 2021, and the connection will ensure the energy security of the region, in combination with the Greece & Israel agreement. Apart from its political significance, this project will also provide jobs to thousands of people.
Limassol Boat Show with an air of French Riviera
For a second consecutive year, the French beer Kronebourg 1666 Blanc, gave a French breath of air to the Limassol Boat Show that was held on 9-12 May at Limassol Marina. The article reports that the select guests had the opportunity to attend a fashion show, taste the wheat beer on its own as well as in the form of signature cocktails. The Kronenbourg 1664 Blanc signature cocktails were exclusively created for Superyacht Events by Constantinos Himonas, the Luxury Portfolio Ambassador of the Photos Photiades company and their names were inspired by the games of Cyprus Casinos “C2”, which was the main sponsor of the two events. Constantinos used innovative bartending techniques and highlighted the way that Kronenbourg 1664 Blanc can be used in alternative manners.
Changes and new incentives in GHS
Patient referrals for specific operations and diagnostic tests to the private sector will be cease on 1 June, and they will be offered in the GHS framework. For this reason, the Council of Ministers approved a €1,5m budget in order to cover the overtime costs of the public sector. Meanwhile, the Council of Ministers also approved a €3m budget that will be disbursed to all the private hospitals that will cooperate with the HIO and offer services within the GHS framework. According to Phileleftheros’ sources, this is just one of a series of incentives offered to private hospitals, polyclinics and clinics. Moreover, the Health Minister Constantinos Ioannou, is expected to publicly announce the revised fees of specialised doctors today.