Bank of Cyprus Finally Makes Money off its Losses (NPL Update)
According to the reliable rating agency Moody's, the main bank's of Cyprus sale of non-performing loans is credit positive. Bank of Cyprus sold a portion of its non-performing loans (NPLs) to debt collection company Apollo Global Management LLC, which contributed to the fact that the Cyprus economy showed to have a more positive outlook.
It is reported that on August 28th the bank decided to sell a portfolio of problem loans with a gross value of EUR 2.8 billion belonging to the investment management company Apollo Global Management. As it is known, the Bank of Cyprus loans consists mainly of non-performing loans in the lenders corporate portfolio, including portfolios of small and medium-sized enterprises; the total debt reached EUR 2.7 billion, with all loans being secured by real estate collateral.
The Bank of Cyprus decided to deal with the debt by selling part of the corporate portfolio in the amount of EUR 1.4 billion, which significantly reduced the number of problem loans and increased its capital buffers upon completion.