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CYPRUS: Co-op bank in NPL deal with Altamira, changes name, heads for CSE

19 July, 2017

The Co-operative Central Bank has completed the cycle of lenders offloading their often toxic non-performing loans portfolios to recovery experts and is now set to head for the Cyprus Stock Exchange later this year.


 
The state-owned bank, the result of a merger of more than 200 Co-op credit societies (SPE) and a subsequent bailout by the government to the tune of 1.5 bln euros, announced a 49/51 joint venture with Altamira Asset Management SA of Spain to manage some 7.2 bln in NPLs and 400 mln euros worth of mortgaged assets over the next ten years.
This will help pave the way for the listing of some 25% of its share capital on the Cyprus Stock Exchange in the fourth quarter of this year, as the government embarks on an asset reduction programme, similar to what the British government did with bailed out Lloyds and Royal Bank of Scotland.
The joint venture with Altamira was approved am extraordinary meeting of shareholders (99% government), which also approved the listing of 6.036 bln shares at 10c each on the CSE Main Market, subject to ECB approval.
At the same time, it was decided to change the bank’s name to Cyprus Co-operative Bank Ltd.
Finance Minister Haris Georghiades hailed the joint venture deal, stating in a brief announcement that it was “a decisive step to address the problem of non-performing loans in the Cyprus banking system.”
He added that it was “a supervisory requirement to seek such solutions with specialized firms. Subsequently, the arrival in Cyprus of a major European firm managing NPLs and assets is an important development.”