The Town Planning and Housing Department has approved a permit application from ATUM Developments Ltd to build on a plot of land in Geroskipou.

Town Planning Permit PAF/412/2017 concerns the construction of buildings in the eastern part of the land belonging to the Archbishopric, for which the Antiquities Department gave a positive opinion after carrying out extensive exploratory excavations.

According to a statement, the company will build aresidential development of two 12-level buildings and 122 apartments which is part of the Peninsula Resort project. In the project is also included the construction of an international branded 5star Hotel Resort, for which the company has already submitted another permit application. It is worth noting that the Peninsula Resort project is being implemented in conjunction and parallel to theEden City Cyprus project for which negotiations are still pending with the state.

With regards to the housing project, the company and the Department of Antiquities were in complete agreement as regards the protection of the archaeological remains in the plot. Moreover, it is expected that the Department will continue its exploratory excavations in the western part of the plot, where the company plans to build the hotel unit, however it has not taken any actions pending the completion of the relevant procedure. To this end, the plot is at the disposal of the Department of Antiquities.

All the excavations of the Department have been carried out with the financial support of the company, both with the hiring of employees who worked under the instructions of the Department, and to cover actual expenses. Within the same spirit of cooperation, the company intends to support the work of the Department in the western section of the plot.

In statements, Country Manager Mr. George Voniatis said: “Implementation of the project on the Archbishopric’s plot allows for the immediate use of the land for which rent is already being paid, until the green light is given for the whole of Eden City Cyprus project. Moreover, it allows ATUM to confirm its interest in investments of value in Cyprus and particularly in the Paphos area, with which the investor Mr Sandor Kenyeres maintains strong links over the past years.We believe that the implementation of EDEN City Cyprus, starting from the Peninsula Resort development, will be the first step to help establish Cyprus as a new luxury destination.”

Source: Stockwatch

Hermes Airports Ltd and Integrated Casino Resorts Cyprus Ltd (ICR Cyprus) announce the signing of a commercial agreement with which the airport operating company provides ICR Cyprus with two specific locations in the terminal building of Larnaka Airport in order to create a “satellite casino” in the city of Larnaka.
 
According to a joint press release, the first location to be allocated is situated in the departures area, accessible only to departing passengers, whilst the second one is situated in the arrivals area, accessible to the general public.
 
The first location is expected to be ready and operational in the next three months whilst the second one is expected to be ready by the end of the year.
 
The current plan for the “satellite casino” at Larnaka airport is to be operating approximately 50 gaming machines.
 
On behalf of Hermes Airports Ltd, the agreement was signed jointly by the Chief Executive Officer of the company, Eleni Kaloyirou and the Chief Financial Officer, George Paschalis while on behalf of ICR Cyprus, the agreement was signed by the Director of ICR Cyprus, Melis Shacolas and the Property President, Craig Ballantyne.
 
The term of the commercial agreement is two years with the possibility of renewal, the press release concludes.

Source: Stockwatch

Minister of Finance Harris Georgiades has assured the leadership of the Fiscal Council of the government`s firm commitment to balanced budgets and the avoidance of any fiscal deficits.

The Minister held a meeting on Friday with the chairman and members of the Fiscal Council, which is appointed by the Council of Ministers, and its mission is -according to its website - the timely and effective public intervention aimed at the avoidance of a fiscal derailment that will entail the adoption of socially painful measures, and that could be avoided by effective fiscal management that includes counter-cyclical and macro-prudential policies. Its mission also includes the safeguarding of fiscal stability, which is a fundamental foundation, upon which better prospects for long term prosperity for the economy and its citizens can be built.

In statements after the meeting, the Minister said that he assured the members of the Fiscal Council that the government`s fiscal policy is clear, and remains strictly within the limits of the balanced budget.

Georgiades added that the government`s position is that the avoidance of deficits "is a fundamental prerequisite for macroeconomic stability, which in turn ensures conditions for growth, economic activities, investments and the creation of jobs".

He also said that the government counts on the cooperation with the Fiscal Council.
 
Meanwhile, replying to other questions, the Minister said that Cyprus is expected this year to tap again the international markets, and expressed conviction that the markets will reaffirm their confidence towards the Cyprus economy.

The Republic of Cyprus, he added, has long restored its access to the international markets.
 
In his statements, Chairman of the Fiscal Council Demetris Georgiades told the press that  the priority is to reduce public debt as soon as possible.

Concluding, he said that after the discussion with the Minister, the members of the Council have more confidence in the course of the public finances and that there will be no derailment at least in the coming years.

Rating agency Moody’s says in its weekly “Credit Outlook” that extension of the government’s waiver of the 20% capital- gains tax to all properties sold when proceeds are used to repay problem loans is a credit positive for the banks.

Last Tuesday, the Cypriot parliament extended the government’s waiver of the 20% capital- gains tax to all properties sold when proceeds are used to repay problem loans, and to properties sold or relinquished to credit-acquiring companies, which are the only Cypriot entities allowed to buy problems loans from banks, to settle existing debt.

Until now, this tax break was applicable only to properties sold in debt-for-asset swaps with banks.

“The benefit`s extension to other sales categories is credit positive for Cypriot credit acquiring companies because it will increase the recoverable amount of problem loans and banks should garner better prices offered for non performing loan exposures (NPEs)”, says Moody’s

The government introduced the waiver of the capital gains tax in 2015 to facilitate debt-for asset swaps as a means to reduce the larges tock of NPEs in the Cypriot banking sector. Almost all these exposures are backed by real estate collateral and around one-third of these troubled loans are terminated loans, which are mostly dated exposures to non-viable businesses or loans to individuals without sufficient means to repay

According to the report, the Bank of Cyprus Public Company Limited, the island’s largest bank, used debt-for-asset swaps to achieve about one-third of its 45% reduction in its stock of NPEs since 2015. Since 2015, Bank of Cyprus onboarded around 2,000 properties worth €1.6 billion. These properties include commercial real estate, hotels, a golf facility and vacant plots.

Moody’s says that although Hellenic Bank Public Company Ltd, the island`s third-largest domestic bank, has used debt-for-asset swaps less, having onboarded a much smaller pool of assets of around €100 million, it is expected that it will use this method increasingly following the July amendments to the legal framework, which significantly shortens the time necessary to foreclose on real estate collateral and limits a borrower`s ability to delay an asset`s foreclosure and auction.

Moody’s also expects that additional companies will enter the market, in addition to B2Kapital Cyprus Ltd, thus enhancing debt collection and providing domestic banks with additional means to reduce their high stock of NPEs.

According to the Central Bank of Cyprus, NPEs were €19 billion in March 2018, accounting for around 100% of GDP, down from €28 billion in March 2015.

Source: Stockwatch

The longest lunar eclipse of the century making the moon look blood red will be visible in Cyprus too from the night of Friday July 27 until the early hours of Saturday July 28.

Astronomers expect the main spectacle to last approximately an hour and 43 minutes. From start to finish, the entire celestial event will last nearly four hours.

In Cyprus, the blood moon will begin with the penumbral eclipse at 20:14 where the Earth’s penumbra will begin touching the moon’s face.

At 21:24 partial eclipse will begin where the moon will start becoming red. Total eclipse will be at 22:30 while maximum eclipse will be at 23:21 and will end at 00:13 on Saturday.

Partial eclipse will end at 01:19 and the penumbral eclipse will end at 02:28.

A special event will be held at the Holy bishopric of Tamasos and Orini in Nicosia in cooperation with the Cyprus astronomy society where the public will be able to observe the eclipse and see the planets through telescopes.

The moon turns red because some of the sunlight going through Earth’s atmosphere is bent around the edge the planet and falls onto the moon’s surface.

Earth’s air also scatters shorter-wavelength light in colours such as blue and green, leaving the longer-wavelength redder end of the spectrum.

Essentially, the red colour is Earth’s refracted sunset-sunrise light being bounced back.

The eclipse has also given rise to doomsday theories with one Baptist pastor Paul Begley saying in a recent Youtube video that this was a prophecy and the blood moon could be interpreted as a sign that “these are the last days.”

Source: CyprusMail

The Public Debt Management Office has announced the issuance of 5 government bonds for a total nominal amount of €3,19 billion maturing between 5 to 53 months with private placement towards the Cyprus Cooperative Bank (CCB).

It concerns bonds to be transferred to the Hellenic Bank in the framework of the agreement between the state-owned CCB and Hellenic. 

The Public Debt Management Office has announced on Monday that the value date of the government bonds is the 13th
of July 2018.

Following the issuance of the government bonds, public debt rises by an additional €840 million reaching € 21.67 billion, with the debt-to-GDP ratio at 111% at the end of the first quarter.

However, repayments expected to be made in July, will lead to a fall of public debt to € 20.8 billion or 107%.

It is recalled that officials from Hellenic Bank and the CCB have kickstarted the process for the transfer of business of the CCB to Hellenic, following the agreement announced last month.
 
Officials from both banks told CNA that division directors began meetings to prepare the transfer which is expected to be completed by the coming September.
 
According to the agreement reached between the state-owned CCB and Hellenic, Hellenic Bank will acquire a balance sheet of €10.3 billion, comprising a portfolio of primarily performing loans (net loans: €4.6bn), Cyprus Government Bonds (€4.1bn), cash (€1.6bn), customer deposits (€9.7bn) and certain other current liabilities and assets. Hellenic will also absorb 1,100 from the CCB’s total 2,700 employees, as well as approximately 73 branches.
 
In August Hellenic Bank in August will convene an extraordinary Annual General Meeting which will approve a €150-million capital raise, expected to take place during the fourth quarter of 2018.

Hellenic has announced it received irrevocable undertakings by its major shareholders to approve the capital increase which is essential to obtain the green light by the ECB’s Single Supervisory Mechanism.

Banking officials from both banks said they aim at a smooth transition especially for the customers of the CCB. Officials are examining issues concerning system integration and the branch network of the consolidated entity.
 
Last week Moody’s rating agency announced it place Hellenic Bank and the CCB on review for upgrade following the Cypriot authorities approval of Hellenic`s offer to acquire CCB`s balance sheet consisting of healthy assets, all of its customer deposits, some other liabilities and equity.

Source: Stockwatch

The European Commission and EU consumer authorities are calling on Airbnb to align their terms and conditions with EU consumer rules and be transparent on their presentation of prices.

Commissioner Jourová, Commissioner for Justice, Consumers and Gender Equality said: "More and more consumers book their holiday accommodation online and this sector has brought many new opportunities to holidaymakers. But popularity cannot be an excuse for not complying with EU consumer rules. Consumers must easily understand what for and how much they are expected to pay for the services and have fair rules e.g. on cancellation of the accommodation by the owner. I expect Airbnb to follow up swiftly with the right solutions.”

Airbnb's current pricing presentation and a number of its terms do not comply with the Unfair Commercial Practices Directive, the Unfair Contract Terms Directive, and the Regulation on the jurisdiction in civil and commercial matters. Therefore the European consumer authorities and the Commission have demanded from Airbnb a number of changes. The company has until the end of August to present their proposals. Once Airbnb proposes solutions to rectify this, the Commission and the EU consumer authorities will review the proposed changes. If they are not considered satisfactory, Airbnb could face an enforcement action.

Price transparency and other unfair commercial practices

The presentation of Airbnb's pricing, as well as the distinction between private and professional hosts currently does not comply with the requirements of EU law, in particular the Unfair Commercial Practices Directive.

Airbnb should:

· modify the way it presents information on pricing from the initial search on their website, in order to ensure that, whenever properties are offered, the consumer is provided with the total price inclusive of all the applicable mandatory charges and fees, such as service and cleaning charges, or, when it is not possible to calculate the final price in advance, clearly inform the consumer that additional fees might apply;

· clearly identify if the offer is made by a private host or a professional, as the consumer protection rules differ.

Clarification of terms or removal of illegal terms

Airbnb's terms of services should be brought into conformity with European consumer law. The Unfair Contract Terms Directive requires that standard terms and conditions do not create a significant imbalance between the parties' rights and obligations, to the detriment of the consumer. The Directive also requires that terms are drafted in plain and intelligible language so that consumers are informed in a clear and understandable manner about their rights.

With regards to Airbnb, this means, for example:

· that the company should not mislead consumers by going to a court in a country different from the one in their Member State of residence;

· Airbnb cannot decide unilaterally and without justification which terms may remain in effect in case of termination of a contract;

· Airbnb cannot deprive consumers from their basic legal rights to sue a host in case of personal harm or other damages;

· Airbnb cannot unilaterally change the terms and conditions without clearly informing consumers in advance and without giving them the possibility to cancel the contract;

· Terms of services cannot confer unlimited and discretionary power to Airbnb on the removal of content;

· Termination or suspension of a contract by Airbnb should be explained to consumers, governed by clear rules and it should not deprive the consumer from the right to adequate compensation or the right to appeal;

· Airbnb's policy on refunds, compensation and the collection of damage claims should be clearly defined and should not deprive consumers from their right to activate the available legal remedies.

Finally, Airbnb should provide an easily accessible link to the Online Dispute Resolution (ODR) platform on its website and all the necessary information related to dispute resolution, pursuant to the ODR Regulation.

Source: Stockwatch

Rating Agency, Moody’s, has described the sale of Bank of Cyprus subsidiary, Bank of Cyprus UK, as credit positive, noting that the sale would place Bank of Cyprus in a better position to focus on reducing its domestic high stock of problematic loans.

Bank of Cyprus announced last Tuesday it signed a binding agreement to sell Bank of Cyprus UK to Cyenergy Capital Limited, owned by a consortium of UK-based investors, a sale for a consideration of €117 million and a profit of €3 million. The sale is expected to increase Bank of Cyprus’ CET1 Capital by around 65 basis points to 12.65% as of March 2018, the agency said.

“The sale of UK operations amid Brexit uncertainty will allow Bank of Cyprus’ management to focus on tackling its domestic operations significant asset quality issues. The increased capital strengthens the bank’s balance sheet and increases the chances of a possible sale of problem loans, which management is exploring,” Moody’s said in its bi-weekly Credit Outlook.

Moody’s noted that Bank of Cyprus’ organic nonperforming exposures (NPEs) were down 45% to €8.35 billion as of March 2018 from a peak of €15.2 billion in March 2015, highlighting however that the bank’s NPEs to gross loans remains among the highest of Moody’s-rated banks and is a key credit challenge, while the stock of provisions against these troubled loans, at around 50%, is relatively low.

Due to the UK loan book’s better quality, Moody’s estimates that the bank’s pro forma NPE/gross loan ratio as of March 2018 will increase to 49.6% from the 44.9% reported in first-quarter 2018.

Nevertheless, the agency added, the bank maintains its target for the ratio’s decline to below 40% by year-end and below 25% over the next three years, excluding any possible accelerated risk-reduction transactions that the bank is currently exploring.

The sale of the UK operations continues its deleveraging trend since 2012, although the bank`s size will remain significant relative to Cyprus` economy. The sale will reduce Bank of Cyprus` total assets by around €2 billion to €21.4 billion, around 110% of the country’s GDP, Moody’s said.

CNA

Building permits rose in the first four months of 2018 an annual 25 per cent in terms of construction area to 480,385 square metres and 28 per cent in terms of value to €517m, the statistical service said.

The increase in building permits in January to April was on a 20 per cent annual increase in construction area of residential projects to 389,588 square metres accompanied by a 26 per cent increase in the value to €386.7m, Cystat said in a statement on its website on Wednesday.

The Cystat figures show a shift from detached houses, whose number rose 19 per cent to 894, towards residential buildings with two or more homes, whose number rose 25 per cent to 898 in January to April compared to the respective period last year.

Building permits rose an annual 62 per cent in the first four months of the year to 89,771 square metres in terms of construction area and 53 per cent to €106.4m in terms of value, Cystat said.
Building permits are a significant leading economic indicator.

Source: CyprusMail

Fitch Ratings has placed Hellenic Bank ‘s Long-Term Issuer Default Rating (IDR) of `B` and Viability Rating (VR) of `b` on Rating Watch Positive (RWP), following the announcement on June 25, that the bank has signed an agreement with Cyprus Cooperative Bank “to acquire certain assets and liabilities.”

The credit ratings agency has also affirmed the bank’s Short-Term IDR at `B`, adding that other ratings of the bank “are unaffected.”

“We will likely resolve the RWP and upgrade HB`s Long-Term IDR and VR upon the completion of the transaction, including the completion of the capital increase by Hellenic Bank, which is expected no earlier than 4Q18, provided that the final terms do not materially deviate from what has been disclosed so far” Fitch says.

At the same time, it adds that “if the acquisition does not go through, the ratings are likely to be affirmed.”

Hellenic Bank, it notes, “will acquire total assets of €10.3 billion comprising mainly loans (€4.6 billion net), Cyprus government bonds (€4.1 billion) and cash (€1.6 billion), as well as customer deposits of €9.7 billion.”

“The RWP reflects our view that the acquisition will overall be positive for Hellenic Bank’s credit profile through a significantly strengthened franchise in Cyprus, improved asset quality and better longer-term profitability prospects” Fitch says.

“The still weak quality of the combined loan book and high capital encumbrance by unreserved problem loans by international standards, as well as significant execution risks related to the integration of a balance sheet that is roughly 1.5x HB`s current size, mean that any upgrade at this stage is likely to be limited to one notch,” it adds.

It continues noting that the combined entity will become the second-largest bank in Cyprus after Bank of Cyprus with estimated market shares in performing loans and deposits of over 20% and over 30% respectively.

“We believe that this will improve the Hellenic Bank’s pricing power and would be positive for the bank`s profitability over the longer term”, it points out.

In the shorter term, it continues, Hellenic Bank could benefit from a repricing of the acquired deposit base, which is on average 80bp more expensive than the bank’s, “but any repricing is likely to be gradual to manage potential deposit outflows.”

The credit ratings agency believes that overall the bank`s business mix will shift towards servicing retail clients as opposed to the more corporate and SME focused franchise that HB has at present.

It estimates that the transaction “will improve the quality of HB`s loan book.”

“The ratio of non-performing exposures (NPEs, EBA definition) to gross loans in the acquired loan book (14%) was significantly below HB`s 52% at end-March 2018,” Fitch says.

It continues pointing out that “the NPE ratio for the combined entity would be about 33%.”

It further adds that the transaction “will include an asset protection scheme, ultimately backed by the Republic of Cyprus (BB+/Positive), whereby Hellenic Bank will be protected against 90% of losses on the covered loan portfolio.”

The protection scheme Fitch explains, “is expected to include all NPEs (€0.5 billion net), performing exposures that Hellenic Bank views as higher-risk (about €1 billion) and some other performing loans (€1.1 billion).”

In total €2.6 billion or 56% of the acquired net loans will be within the scope of the scheme, it says.

Source: Stockwatch