The bank is the first credit institution in Cyprus to proceed with a strategic partnership, in accordance with guidelines by the ECB on NPL management.
“The Hellenic bank and APS holding a.s reached an agreement on 10 January on the management of real estate assets and servicing of the entire portfolio of non-performing exposures,” the bank said in a press release issued on Wednesday to the CSE.
A new company will be set up in which the bank will have a 49% stake, whereas APS Recovery Cyprus Ltd will a 51% stake. The bank`s Arrears Management Division operations and staff will be transferred to the new company, including all necessary resources in exchange of a positive consideration, the bank said.
The 2.4 billion non performing exposures as well as the real estate assets amounting to €30 million will remain on the bank`s balance sheet. That means that rights and obligations and rights of both the clients and Hellenic Bank remain as they have been agreed upon in the relevant agreement, as borrowers remain clients of the Bank.
APS is a specialized services company selected after a competitive bidding process. APS has extensive experience operating in 11 countries in Central and South Europe, collaborating with well known baking groups such as Merill Lynch, Bank of America, Deustche Bank, Unicredit, Fortis bank, Banco Populari, Hungarian National Bank and IFC.
“The agreement is of huge strategic importance for the Hellenic Bank and falls under the group`s strategy of reorganizing and transforming its business model,” the bank said, adding that the strategy`s main pillars is the reduction of non-performing exposures, the expansion of new lending increasing the bank`s market share and the increase of revenue through other banking activities.
The bank also said that “by creating the biggest real estate asset management and debt servicing platform in the Cypriot market, the bank will be able to effectively deal with its non-performing exposures in an accelerated way, by developing, expanding and improving NPE recoveries through leveraging on the know-how and expertise of APS.”
According to the bank, the completion of the transaction is subject to approvals by the regulatory authorities and is expected to be finalized by the end of the first quarter of 2017.
- Get in StockWatch from your mobile phone with Vodafone live!
- Subscribe to the new StockWatch Newsletter.