Bank of Cyprus announces engagement of Pepper in a bid to reduce non-performing loans

The Bank of Cyprus Board approved the engagement of Pepper Cyprus Limited, a fully owned subsidiary of Pepper Europe (UK) Limited, to assist the Bank in resolving non-performing loans from its SME and Retail portfolio.

According to a BoC announcement, Pepper will focus on resolving a specified portfolio of around Euros 800 mln Retail and SME NPE loans. The bank retains full ownership, control and responsibility for all non-performing loans allocated to Pepper.

This is a strategically important engagement for the Bank, and Cyprus. It improves the ability to deliver NPE reduction across Cyprus in a category of loans critical for the entire economy the announcement says.

The bank has already a specialist in-house team, containing around 220 people dedicated to the servicing of SME and Retail NPE’s. According to the bank, this team has built an impressive track record, delivering a net reduction in NPE’s of Euros 1.1bn over the 18 month period to June 2017.

This team is unaffected by this announcement and will continue to operate in the same way and with the same staff as it has done in recent years, it is added.

Moreover, the bank says that Pepper will bring their own experienced workout professionals, initially amounting to around 40 employees. They will operate within the Bank’s existing Restructuring and Recoveries Division, which is headed by Nick Smith.

Given that the dialogue with the Cyprus Union of Bank Employees (ETYK) is successfully completed, Pepper will commence their work immediately, it is noted.

Nick Smith, Director of RRD, said that like most financial institutions in Cyprus, the Bank’s Retail and SME non-performing loans remain one of its biggest challenges. He added that this partnership will see experienced Pepper professionals working alongside the Bank’s existing teams and represents a unique opportunity for the Bank to accelerate its resolution of these problem loans.

Fraser Gemmell, MD of CRE Pepper Europe, said from his part that a move of this significance into Cyprus demonstrates our commitment to the region.

Pepper Group Limited, the ultimate parent entity of Pepper Cyprus Limited, Pepper Europe (UK) Limited, and their affiliated entities is a public company listed on the Australian Stock Exchange with a global headcount of over 2,000 and assets under management of over Euros 35 bln.

The Pepper operates across the UK, Ireland, Spain and Portugal servicing in excess of Euros 30 bln for various institutional investors.

Source: Cyprus News Agency