HB announces the start of operations of a new entity to manage its NPLs

Hellenic Bank Public Company Ltd announced that it has sold its non-performing loan and real estate management business for Euros 20,6 million to a newly established entity APS Debt Servicing Cyprus Ltd that started operations on Monday.

APS Cyprus which is a member of the APS Holding a.s. group of companies, will manage the Bank’s non-performing loans and real estate assets. Further to the announcement dated 11 January 2017, all required regulatory clearances have been received. The transfer of business was on 1 July 2017 while APS Cyprus commences operations on 3 July 2017.

APS Cyprus is acquiring the operations of the Bank’s internal Arrears Management Division (AMD), including the necessary resources to independently carry out the servicing of non-performing loans and real estate assets. Simultaneously, the Bank has executed a 10-year service level agreement with APS Cyprus for the management of the Bank’s non-performing loan and real estate portfolio (NPL and REO Portfolio). It is noted that the Bank retains the ownership of the said non-performing loan and real estate portfolio. The contract is priced at arms’ length following a two stage competitive auction process.

APS Cyprus is 51% owned by APS Holding and 49% by the Bank. APS Cyprus will assume all operating expenses associated with the management of the Bank’s NPL and REO Portfolio including but not limited to the costs of payroll, IT licenses, processes, products, services and other operations related overheads. 129 employees from the Bank’s AMD are be moving to APS Cyprus while additional resources, expertise and knowhow will be brought in as needed to further enhance the capabilities and capacity of the operation.

Non-performing loans with a value of approximately Euros 2,3 billion and real estate assets with a value of approximately Euros 150 million will be managed by APS Cyprus in consideration for an administration fee payable by the Bank to APS Cyprus.

The consideration for the sale of the business is approximately Euros 20,6 million. The accounting gain before tax from the transaction is approximately Euros 19,9 million, with a pro forma positive impact of approximately 30 basis points on the Common Equity Tier 1 capital ratio.2

The transaction is consistent with the Group’s strategy of fixing the balance sheet by tackling asset quality problems and building the franchise by expanding the business in a risk prudent way.

APS Holding is a leading company in the management and recovery of loan portfolios and real estate within Central and South-Eastern Europe. Founded in 2004, APS Holding is headquartered in Prague, Czech Republic.

Source: Cyprus News Agency