An increase in withdrawals at the Co-op compelled the Central Bank of Cyprus to say that Thursday’s comments made by one of its officials on the disastrous consequences for depositors of a failure to implement the Hellenic – Co-op deal were intended to highlight the worst-case scenario rather than present the probable scenario.

“The comments about the remote, theoretical probability of the liquidation of the Cyprus Cooperative Bank were made to stress the most extreme negative consequences if the transfer of the Cyprus Cooperative Bank to Hellenic Bank is not completed, a solution which under the circumstances constitutes the only alternative,” a central bank spokesperson said in an emailed statement on Friday.

On Friday, customers were queuing inside and outside Co-op branches leading to an increase in withdrawals, sources familiar with the matter said. In the first three months of the year, the Co-ops saw €2 billion in cash withdrawals amid concerns over the bank’s capital adequacy.

The Co-op, the second largest lender on the island, has a ‘very important market share in deposits’ facilitating ‘critical functions’ for the economy, the central bank spokesperson said.

The Cyprus Coperative Bank declined to comment.

“Therefore, interest and economic and financial stability necessitate that there is no impact on insured depositors. Therefore, even in the case of considering the probability of resolution, public interest will lead to the complete protection of insured deposits without raising the issue of liquidating the bank if the deal on the sale of the Cyprus Cooperative Bank’s operations is not completed,”

On Thursday, Yiangos Demetriou, head of the central bank’s supervision department warned members of the parliament’s watchdog committee of the ‘disastrous’ effects the non-implementation of the agreement signed by Hellenic Bank with the Cyprus Cooperative Bank on Monday would have. Demetriou had also said that the European Central Bank and the Single Resolution Mechanism, were preparing for a scenario under which the deal was not implemented.

The deal, which provides for the transfer of the Co-op’s operations to Hellenic, including €9.7bn in deposits, would spare the Co-op from being liquidated, Demetriou said.

His warnings came as some parties left open whether they would approve a bill that would allow the government to extend guarantees to Hellenic Bank to shield it from a probable under performance of assets it agreed to acquire. The implementation of the deal also requires the approval of a bundle of amendments in legislation to help banks reduce their non-performing loans, which the European Commission set as condition for allowing taxpayers’ money to facilitate the deal.

The Central Bank of Cyprus spokesperson added that deposits up to €100,000 per individual or legal entity per financial institution remain guaranteed in accordance with a European directive transposed into national law.

In 2013, depositors at Cyprus Popular Bank lost all their uninsured deposits after the bank ran out of capital while those at Bank of Cyprus recapitalised it with almost half of their savings in excess of €100,000.

Source: CyprusMail

Cyprus aspires to act as a bridge to further enhance ties of cooperation between Asia, Europe, and Africa, House President Demetris Syllouris said on Tuesday.

Syllouris was addressing the opening session of the Standing Committee of Economy and Sustainable Development of the Asian Parliamentary Assembly, which is hosted by Cyprus for the first time until June 28 with the participation of over 90 MPs and senators from 20 Asian countries.

In his address, the House Speaker said Cyprus, which is located ay the crossroads of Asia, Europe and Africa can play a key role in actively promoting the assembly’s goals, aspiring to act as a bridge in further enhancing ties and cooperation between Asia, Europe and Africa.

“Our participation in the EU has shown us that economic cooperation and interdependence can constitute a basis for peace, stability and prosperity,” he said.

He added that Cyprus also aspires to become an active player in promoting the initiative “One Belt, One Road” a development strategy proposed by the Chinese government which focuses on connectivity and cooperation between Eurasian countries in the context of the EU and of connecting maritime routes and cross-border infrastructure between the Mediterranean and the “Maritime Silk Road.”

Cyprus could act as an energy hub between Europe and Asia and as a supplier of the Asian energy market one of the greatest and fastest growing in the world, he noted.

On his part chairman of the committee and vice chair of the assembly, Nicos Tornaritis said that the Cypriot parliament is honoured to chair the committee.

“It is only through common and targeted action that we can hope to formulate substantial proposals for our governments, aiming to include the main provisions of viable and sustainable economic growth in the entire spectrum of our national policies”, he pointed out.

Source: CyprusMail

Cyprus is fast becoming one of the top emerging investment fund centres in Europe, Government Spokesman Prodromos Prodromou has said.

Addressing on Friday evening the Gala Dinner of the European Fund and Asset Management Association (EFAMA)
Annual General Meeting in the coastal town of Limassol, Prodromou said that by choosing Cyprus as the location for its most important annual event, EFAMA actively shows its support to the development of the Cyprus investment funds industry, a promising sector which has witnessed impressive growth both at European and at global level.

"A long journey towards the vision of establishing Cyprus as a modern and attractive investment fund and asset management centre of excellence, has brought about formidable results", he added. 

The Government Spokesman noted that as an attractive domicile and servicing centre for both AIFs (Alternative Investment Funds) and UCITS (Undertakings of Collective Investment in Transferable Securities), Cyprus now has a fully EU-compliant and business friendly regime that strikes a balance between freedom of operation for the asset manager and protection of the investor.
 
"Cyprus is fast becoming one of the top emerging investment fund centres in Europe in light of its continuous efforts to enhance its legislative and regulatory regime, backed up by a strong network of financial and professional service providers, offering high quality services at highly competitive prices" he stressed. 

He added that low operating costs, a simple and effective legal system based on the Common Law and an attractive tax framework offering one of the lowest corporate tax rates in the EU and access to an extended network of 62 Double Tax Treaties and a range of incentives for both companies and individuals, contribute greatly to Cyprus’ increased competitiveness in relation to other EU jurisdictions.

Referring to Cyprus` business environment, he said the Government`s plan is to continuously improve it and reinforce the position of Cyprus as a competitive, innovative, stable and fully transparent destination for business and investment.

Concluding, he referred to developments such as the Capital Market Union, which we strongly support as a facilitating factor of the cross-border operation of investment funds and the improvement of the European passport system function for all types of investment funds, as well as the upcoming Brexit, saying that they give new impetus to the already fast-growing investment funds industry and require careful consideration.

Source: Stockwatch

President of the Republic of Cyprus Nicos Anastasiades has assured that the government’s plan is to continuously improve the country’s business environment so as to reinforce the position of Cyprus as a competitive, innovative, stable and fully transparent destination for business and investment.

Addressing the 7th Invest Cyprus International Investment awards, the President expressed his gratitude to the investors for their vote of confidence and trust for their ongoing support and determination to develop their businesses in Cyprus.

“In this respect we recognised the importance of maintaining sound public finances, of preserving a stable and competitive tax regime, and of providing incentives for new business and investment”, he said.

He also said that the government’s goal is to solidify the conditions for sustainable growth in a mid and long-term horizon, in favor of all citizens and within conditions of full employment.

The President referred to the measures that the Government takes to improve areas important for any investor and in particular as regards creating a business-friendly environment. As he said the government’s aim was to reform the public service so that it facilitates growth in a modern, knowledge-based, scientific, high-tech and innovative economy.

“Moreover, it goes without saying that we will continue promoting transparency and demonstrating zero tolerance to any kind of mentality that could evoke phenomena of corruption or inexcusable delays in business-related processes,” he added.

He further  expressed hope that the House of Representatives would approve a series of reform bills the Government submitted or intends to submit, such as the one for the establishment of an Under-Secretary for Tourism and the other one for establishing a comprehensive legal framework for Growth and Competitiveness.

“At the same time, we shall remain committed to our balanced budget policy which has been successful in upgrading our economy’s credit rating and establishing higher levels of confidence by the international investment community”, he added.

Regarding the local banking system, he said that Cypriot financial institutions have been very diligent in advancing their corporate governance policies and have vigorously stepped up their efforts to combat money laundering phenomena.

Invest Cyprus Chairman, Michalis Michael said that under the guidance of the Government and the President himself, and the invaluable contribution of the private sector, the organization has been implementing a targeted strategy in the framework of which they  had set specific targets and mobilised innovative tools to enhance investment interest in the country.

“An ambitious reform strategy, as well as a series of targeted initiatives in selected markets and business audiences allowed us to stimulate investment interest in new and existing projects and sectors, while capitalising on the opportunities created by international developments”, he said.

The winners of this year`s awards were Olympia Group, ExxonMobil, DP World, Unitedam Marine Limited, Eurobank and Arab Satellite Communications Organization (Arabsat). An Honorary Prize for its Greater Contribution to the Cyprus Economy was awarded to the Council of Europe Development Bank.

source: CNA

The Cyprus Cooperative Bank on Friday froze accounts of customers who keep their loans delinquent on purpose, as the bank makes an effort to force them to seek refinance terms.

According to Kathimerini Cyprus, CCB on Friday froze accounts with deposits over €2500 in cases where owners either have delinquent loans or have defaulted on their terms causing the bank to have an unresolved Non-Performing Loan (NPL).

The move is not connected to the recent deal with Hellenic Bank taking over the healthy part of the CCB, according to sources within the bank.

On the contrary, those sources said the freeze was in the works for some time and it was scheduled to be rolled out in the near future.

But it appears that the Hellenic deal accelerated the process.

The bank says irresponsible depositors have been avoiding any effort to work together with the bank officials to agree on new loan repayment terms.

In some cases, delays have gone for many years according to bank sources, in what has become to be known as “strategic defaulters” in Cyprus.

This comes one day following the publication of a 2017 report by ESM, which identified key problem areas for Cyprus’ banking sector despite banks having at their disposal necessary legal tools to reduce NPLs.

Now loan defaulters and those who have delinquent accounts will be forced to contact the bank in order to unfreeze their accounts.

The bank reportedly said the best solution would be finding common ground.

source: Knews

THE management committee of a building complex is responsible for imposing communal charges on the owners of the units. The landlord, being the owner of a unit, is obliged to pay the communal charges and this obligation is transferable to his tenant. The landlord may impose an obligation upon his tenant to pay the communal charges to him, by including it as a term in the tenancy agreement. In such a case, the tenancy agreement does not bind the management committee, to which the landlord remains accountable and if the tenant fails to pay either the rent or the communal charges or violates any other contractual obligation, the landlord is entitled to claim the amounts due through a legal action.

Where the rented premises were completed prior to 31.12.1999 and are situated in an area controlled by the Rent Control Law, the tenancy becomes statutory upon its expiration or its termination and the Rent Control Court has jurisdiction on any matter related to the tenancy. The issue concerning the payment of rents in arrears, communal and sewage charges owed by a statutory tenant is an ‘incidental’ matter and consequently falls under the jurisdiction of the said court.

The law relating to statutory tenancies states that the tenant who remains in possession of any residence or shop and complies with the terms and conditions of the last tenancy agreement, is entitled to the benefits under it, provided the terms of the said tenancy agreement are consistent with the provisions of the law. Moreover, according to the law, if any rent or communal charges are in arrears, they are considered an incidental or supplementary matter which falls under the jurisdiction of the court.

The definition of the term ‘rent’ in the law includes any amount payable as rent for the premises and the furniture if the property is furnished, but it does not include the communal charges. As regards a statutory tenancy, the law provides that, unless there is an agreement to the contrary, the tenant is obliged to pay the communal charges corresponding to the premises, including minor expenses for the maintenance of the communal areas and facilities. However, the tenant has no obligation to pay serious expenses for the maintenance, alteration or replacement of the communal areas and facilities.

The term ‘communal charges’ in the law means the use of the communal areas of the premises by the tenant, the use of the communal facilities, water and electricity supply to them for the tenant’s use and the provision of services for the cleaning and maintenance of the communal areas, as well as other services necessary. The issue concerning the payment of communal charges by a statutory tenant was dealt with by the court, whereby it was decided that the claim was one of special damages and the landlord had to prove them strictly. A term was included in the tenancy agreement imposing an obligation upon the tenant to arrange the supply of water and electricity and the payment of the relevant charges. Moreover, the tenant had to register the utility bills in his name, including the payment of the refuse, communal and drain-cleaning charges.

The court interpreted that the tenant had accepted to pay the landlord the communal charges for the rented premises. In addition, it examined the phrase “cleaning of drains” and decided that in no event the aforesaid term imposed a duty to the tenant to pay the sewerage charges. Therefore, the landlord failed to prove the claim for the payment of the sewerage charges of the premises, so a term in tenancy agreements referring to who will to pay sewerage charges is advisable to avoid any future disputes.

Source: CyprusMail

The probe which the government has requested into the Cyprus Cooperative Bank will look into matters before and after 2013, President Nicos Anastasiades said on Thursday.
 
In statements before a lunch, in Nicosia, hosted by the Embassy of Bulgaria in Cyprus ahead of the conclusion of the EU Bulgarian Presidency, the President clarified that the probe will look into what happened in 2013, that led the government to support the financial institution with €1.5 bln “in order to survive.”
 
At the same time, the President said that developments in the 2013-2018 period will also be examined, which resulted in €7.5 bln non-performing loans.
 
Referring to the acquisition of the Cyprus Cooperative Bank by the Hellenic Bank following recommendations to the government by the European supervisory authorities for the liquidation of the Cooperative Bank, the President said that “we were obliged to take a painful decision which protects depositors, stabilizes the banking system and creates future prospects.”
 
The President called for the adoption of efficient measures, in line with European Commission requirements in order to “address the problem in an efficient and positive manner.”
 
Asked if there can be a balanced approach to avoid problems that emerged in other countries, for example with foreclosures, the President said that “no doubt, the protection of those who are really unable to pay comes first in our mind.” He said however that the approach towards those who are taking advantage of the situation even though they are able to pay will be different.
 
Invited to comment on a possible delay by the banks in their effort to deal with NPLs, President Anastasiades indicated that the banks could have handled the situation better, taking into account that those loans will at some point be worth nothing.

He also indicated that the banks could have been more flexible to allow the borrower to pay his loan.
  
The President expressed hope that the measures that will be adopted by the political parties will acknowledge obligations vis-à-vis the European Commission and lead to a stable banking system.
 
The government of Cyprus approved a deal on the Cyprus Cooperative Bank, following an offer submitted by the Hellenic Bank.

According to the offer, Hellenic Bank undertakes to pay the whole amount of the clients’ deposits worth €9.7 bln and assumes assets of €10.3 bln, including loans, bonds and cash as well as non-performing loans of €0.5 bln. Assets of the Cooperative amounting to €8.3 bln will be taken over by the state, most of which is non-performing loans.

Source: Stockwatch

Energy Minister Giorgos Lakkotrypis said on Wednesday he had submitted a signed memorandum of understanding (MoU) to the cabinet between the government and six private companies for the removal of the fuel storage facilities at Larnaca to Vasiliko in the Limassol district, he said.

Lakkotrypis said that even though the municipalities from the areas in question were not party to the MoU he submitted “for their own reasons”, the plan would go ahead and a timetable had been fixed with a deadline of December 31, 2019 for moving the liquid fuels, and the creation of LPG facilities by December 31, 2020.

Larnaca municipality last month rejected a third draft of the MoU on the relocation of the oil and gas firms from the district by 2020 and was no longer willing to engage in further discussions as long as there was no progress.

Lakkotrypis said after Wednesday’s council of ministers meeting that the cabinet had “authorised me to negotiate with the oil companies…”

“This is the first time that certain companies are bound by their signature on a specific timetable,” he told reporters. He said he informed the mayors.

Asked if there were any incentives given to companies he said: “The incentive is obvious. If you see the tourist map of Cyprus, an area which lends itself to further development of the industry is Larnaca bay which is at the heart of these [fuel] facilities. It is therefore in the interest of those companies holding tracts of land there to relocate and exploit the area for tourism, which both the government and the city of Larnaca wanted, and to this end the ministry of the interior is proceeding already to undertake the necessary planning for the region.”

As regard penalties for the companies if they failed to meet the deadline, Lakkotrypis said a steering committee was being set up, which he would chair every three months to see the progress on the work “whether this will be related either to the government side or the companies” and take steps from there.

One of the previous drafts included the possibility of fines and the termination of a company’s operations for those that don’t comply. Lakkotrypis said at the time it also provided for fines up to €17,000 and legal procedures to strip companies of their licence if they do not stick to timeframes.

Larnaca Mayor Andreas Vyras last month rejected the third draft of the MoU over a clause giving the right to any signatory to opt out of the deal if they wished to, by giving a month’s written notice.

Vyras said the legal services did not give their stamp of approval to the second draft of the MoU and had asked for amendments, leading to a third document, which according to the mayor, defeated the purpose as the aim was to make sure all timeframes given were met by the oil and gas companies.

He had asked for a number of safeguards to be included in the memorandum to make it clear that those who do not apply what they have to do within timeframes, be subject to sanctions.

Also last month President Nicos Anastasiades attended a ceremony to start the demolition of fuel company Petrolina’s tank 15, and said it marked the beginning of the timeframe provided for in the MoU.

In the meantime, it had been announced that the government will next month launch a tender for the purchase of an FSRU (floating, storage and re-gasification unit) and for related infrastructures at Vasiliko a project allowing the island to import liquefied natural gas and use it for electricity generation for the first time

Source: CyprusMail

MPs of the ruling Disy party sounded upbeat on Monday that a series of bills granting tax relief to bank debtors would make it through the plenum.

The House finance committee was discussing five bills which aim to give incentives to people who wish to sell their house as part of restructuring their debt with a bank or to settle a non-performing loan (NPL).

Under the proposals, these persons would be exempt from paying income tax, capital gains tax, property transfer fees, stamp duty and the special defence contribution.

Crucially, the bills under discussion also cover cases where borrowers sell their house on the market, and not just via a debt-for-asset swap with a bank.

Disy leader and MP Averof Neophytou said the legislative proposals had gathered enough momentum in committee, so that it was decided to table them to a plenary session.

Neophytou brushed off concerns that the proposed legislation might incentivise bank debtors who are currently consistent with their payments, to become delinquent so that they can benefit from the tax relief offered.

“No serious lawmaker would author a bill opening a backdoor NPLs to skyrocket,” the Disy boss said.

He noted that the legislation contained safeguards, such as that it would apply only to debt which was classified as non-performing as at December 31, 2015.

“We wanted to cover borrowers who, due to the financial squeeze, were unable to cope with their loan payments…it is not our goal to provide strategic defaulters an additional tool,” he said.

“And we at Disy will be very harsh on these strategic defaulters,” he added.

The purpose of the legislation is to “help borrowers, poor people, small and medium-sized businesses who, because of the economic crisis, could not temporarily keep up with their instalments”.

For their part, main opposition Akel were sceptical about who would ultimately benefit.

MP Stefanos Stefanou said it was disconcerting that, despite repeated calls, both the finance ministry as well as the Central Bank have failed to provide detailed data on NPLs.

“Knowing the overall value of NPLs is not enough. We need to know what percentage do these strategic defaulters account for, and who these people are.”

The International Monetary Fund, the European Central Bank and the European Commission have warned Cyprus of the dangers of not reducing NPLs on banks’ balance sheets. They say that the slow pace of NPL reduction is chiefly due to a weak foreclosures system.

According to the latest available data, delinquent loans in the Cypriot banking system are at €22.1bn.

Source: CyprusMail

The number of vacancies in the economy rose an annual 11 per cent in the first quarter, to 3,761, and by 497 compared to the fourth quarter of 2017, the statistical service said.

The ratio of vacancies to jobs in the first quarter rose to 1.2 per cent from 1 per cent in the fourth quarter and 1.1 per cent in the first quarter of 2017, Cystat said in a statement on its website on Thursday. The highest ratios were 3.2 per cent in the administrative and support services and 3.1 per cent in hospitality.

Source: CyprusMail