State-owned asset manager to extend mandate up to 2030

KEDIPES, the state-owned asset management company, is set to extend its mandate up to 2030 aiming to the full repayment of the state-aid granted by the government, Lambros Papadopoulos, President of the board of directors of KEDIPES has said.

KEDIPES was the residual entity that undertook to manage the non-performing loans and real estate assets that were excluded from the sale of the former Cyprus Cooperative Bank (CCB) to Hellenic Bank. Since its operation in September 2018, KEDIPES has provided to the state €1.6 billion in cash in the context of the repayment of the aid granted by the government to facilitate the sale of the CCB to Hellenic Bank, totalling €3.54 billion.

“The business plan cycle has been revised and it will conclude in 2030 with the basic aim to fully repay the state aid amounting to €3.54 billion,” Papadopoulos told a press conference on the progress of KEDIPES’ asset management for the second quarter of 2024.

He added that the business plan was extended due to the delay in providing solutions to the non-performing loans stemming from the repeated suspension of the foreclosure’s framework, but also from exogenous factors, such as the COVID-pandemic, geopolitical tensions, high inflation and rising interest rates.

He noted that the basic reason was the repayment of the state-aid a target that “is feasible provided this extension is approved and that KEDIPES will not rush to sale loan portfolios.”

Papadopoulos also said that the payments to the state this year amounted to €240 million in spite of increasing the company’s buffer by €20 million, due to government-backed the mortgage to rent scheme of which KEDIPES is the implementing entity.

According to the management progress results, in the second quarter total cash inflow amounted to €111 million with inflow for the first half of the year amounting to €256 million.

Papadopoulos said that the company achieved spectacular results due to the campaign for the full loan repayment by borrowers with mortgages up to €350,000 with expected cash inflows in the region of €40 to €50 million throughout 2024. “This campaign will yield solutions for loans with a value between €150 and €180 million,” he said.

Moreover, Papadopoulos added that KEDIPES will launch “Ledra 2” project providing the sale of a portfolio of loans that are supported by the ESTIA scheme, a government scheme to subsidise non-performing loans secured by primary residences with a value of up to €350,000.

Since the commencement of operations of KEDIPES, cash inflows amounted to €2.36 billion, whereas the value of total assets has declined to €6.34 billion with the value of the assets excluding accrued interest at €4.73 billion.

Net loans (excluding accrued interest) by the end of June 2024 were €4.13 billion from €7.31 billion in September 2018, whereas the real estate portfolio declined to €411 million from €680 million since the commencement of operations. Furthermore, cash and liquid assets amounted to €152 million, KEDIPES added.

(Source: CNA)