CYPRUS: State-owned asset management company generates EUR 101 mln

Cyprus’ state asset management company (KEDIPES) generated income of Euros 101 mln in the first four months of operation, following the sale of the Cooperative Bank to Hellenic Bank.

KEDIPES was established as a 100% subsidiary of the Co-op to manage the non-performing loans, real estate and other assets amounting to Euros 8.2 bln that were not part of the transfer to Hellenic, such as non-performing loans of Euros 7.4 bln.

Andreas Charalambous, President of KEDIPES and Director of the Finance Ministry’s Financial Stability Division said under the circumstances, the asset manager’s results were satisfactory.

He added that the first four months of operation were a transitional phase, as KEDIPES implemented a voluntary retirement scheme, while loan restructuring were frozen as SEDIPES, a parent company, did not have a license to operate as a credit acquiring company.

We are seeing prospects. KEDIPES is operating in a very difficult environment but the signs say we are on track, Charalambous said, adding KEDIPES’ mandate is to maximize value for the Cypriot taxpayer.

He said KEDIPES will be monitored on a monthly basis by the EU’s competition watchdog, as the sale of the Co-op was subsidized with state-aid amounting to Euros 3.6 bln of which Euros 3.2 bln was in government bonds offered to Hellenic Bank.

KEDIPES’ income from the management of NPLs amounted to Euros 28 mln,whereas income from year-end loan instalments by Municipalities amounted to Euros 25 mln.

Income from real estate management amounted to Euros 37 mln while additional other income amounted to Euros 11 mln.

Total cash outflows amounted to Euros 90 mln of which Euros 56 mln were one-off expenses involving the first instalment of the voluntary retirement scheme amounting to Euros 43.5 mln, Euros 6.6 mln in deposits protection levy, and other expenses amounting to Euros 6 mln.

Operating expenses amounted to Euros 34 mln, of which Euros 11.3 million went to Altamira asset management, KEDIPES’ loan servicer, Euros 7.7 mln for staff salaries and other expenditure amounting to Euros 15 mln.

KEDIPES’s cash reserves amounted to Euros 81 mln, of which Euros 74 mln is from the consideration paid by Hellenic Bank for the acquisition of the performing part of the Co-op.

This year is pivotal for KEDIPES as there will be more clarity in the income stemming from NPLs and real estate management.

Source: The Financial Mirror