LOANS: Bank of Cyprus sells EUR 34 mln NPL portfolio to Hellenic’s APS

Bank of Cyprus has sold a portfolio of non-performing loans worth about €34 mln to APS Holding a.s., the distressed assets and property management firm and debt recovery company that took over Hellenic Bank’s toxic loans in July 2017.

The portfolio dubbed “Velocity”, with a nominal value of €245 mln of mostly small loans to 9,700 borrowers, has a net asset value of €33.7 mln after Bank of Cyprus wrote down some 86% of these loans, widely considered non-recoverable and not serviced for over five years.

This follows a bigger deal in August last year when the bank offloaded bad debts and NPLs worth €2.8 bln to Apollo Global Management in a project dubbed ‘Helix’ as part of its efforts to deleverage the balance sheet, divest non-core assets and return to its core banking business.

The bank’s bad loans account for 37% of its loan book, and aims to reduce the rate of NPLs to 26% by next year.

All banks are taking advantage of the government’s “Estia” plan to subsidise the recovery of NPLs where a prime home has been put up as collateral.

Bank of Cyprus said that €900 mln worth of loans are eligible to join the government scheme and that a further €600 mln in restructured loans will be reclassified as performing loans by end-2019 after completing a one-year probation period stipulated in the European Banking Authority directive.