The government’s action to deposit €2.5bn at the co-op bank reassures customers not to worry about their money, its spokesman said on Wednesday.

“This huge deposit sends the message to the rest of the savers that they don’t have to worry about their deposits,” Prodromos Prodromou said.

On Tuesday, the finance ministry said it had deposited €2.5bn raised from several bonds, worth €2.35, issued to the Cooperative Central Bank (CCB) and from its cash reserves.

As collateral the state has received all the co-op’s non-performing loans – around €6.4bn – a number of memberships in private and cooperative companies, and a number of properties in the government-controlled and the Turkish-occupied north, worth over €7.6bn.

On March 19 the CCB launched a tender for the expression of interest offering two options: acquiring a controlling stake in the bank’s share capital, currently owned by the state, or acquiring assets and liabilities.

However, the process, together with incessant and often irresponsible talk from politicians, generated uncertainty concerning the future of the CCB. This triggered deposit outflows, prompting the state to step in in a bid to restore confidence.

Prodromou said the bank could now calmly examine the investment interest and decide which would be the most beneficial option.

Unlike the past, the state currently can make such an intervention to support a bank’s deposits and its customers.

“This is the difference with 2012-2013 when the old co-op we knew had reached the end of the road and this state bank took over, which again, must evolve,” Prodromou said.

The spokesman said the priority was to maintain the system’s stability and start the two-pronged process of effectively dealing with non-performing loans (NPLs).

“First the vulnerable borrowers must be protected with strict criteria, but at the same time the rest who exploited the system must be forced to repay their loans,” Prodromou said.

The co-op bank was recapitalised with €1.67bn in taxpayer money in 2014 and 2015, after hundreds of separate branches were merged.

But it is struggling with some €6.4bn in NPLs, accounting for more than half of its loan portfolio, mainly because the foreclosure and insolvency laws passed by parliament in 2015 are very difficult to enforce.

The problem is that its portfolio is full of primary residences, which the legislation make it very difficult and time-consuming to move against.

In 2017, co-ops extended the collateral recovery period to seven years, a move that cost €150m in provisions.

The island’s lenders, the EU and the IMF, have called on the authorities to amend the foreclosure and insolvency laws.

Source: CyprusMail

Google announced it is pulling cryptocurrency mining extensions from its Chrome Web Store April 2 after “90%” failed to comply with its rules.

In a blog post, extensions platform product manager James Wagner said that the move was in response to analysis of malicious “cryptojacking” present in extensions.

The term refers to when users downloading an extension of any sort unwittingly start mining cryptocurrency without their consent.

“Over the past few months, there has been a rise in malicious extensions that appear to provide useful functionality on the surface, while embedding hidden cryptocurrency mining scripts that run in the background,” Wagner claims.

While formerly allowing cryptocurrency mining extensions that mined as their sole purpose, Google will now ban new candidates from entering the Web Store and remove existing ones by June.

Only one in ten extensions involved in mining adhere to Chromium’s policies on disclosure, according to Wagner.

“Unfortunately, approximately 90% of all extensions with mining scripts that developers have attempted to upload to Chrome Web Store have failed to comply with these policies, and have been either rejected or removed from the store,” he adds.

June also marks the start of Google’s other, more controversial cryptocurrency-related ban, that referring to cryptocurrency advertisements, which will disappear from Google Adwords.

Source:Cointelegraph

The government on Monday said it was moving to shore up confidence in the Cyprus Cooperative Bank (CCB) as depositors pulled more money out of the lender.

Neither the government nor the state-owned bank would be drawn on what these moves might be, though the goal was clear: to buttress the bank’s deposit base so that potential private investors would not get cold feet.

Queues formed in co-op branches as worried customers withdrew their deposits amid news of government plans to privatise the lender, whose balance sheet is stacked heavy with delinquent loans.

Speaking on the Alpha television channel, government spokesman Prodromos Prodromou asserted that the state has the ability to support the co-op banking sector, nationalised and consolidated in 2014.

“The Cypriot state of 2018 is not the same as it was back in 2012,” he said, alluding to the lead-up to the 2013 financial meltdown.

But he declined to say what actions the government had in mind.

It was unfortunate, Prodromou added, that turmoil was being created within Cyprus at a time when the government was seeking to attract investment into the bank.

According to media reports, the government was mulling one of two options: either to divert to the co-op bank some of its cash holdings held with the Central Bank, or to issue a sovereign bond and then deposit the money raised into the co-op.

Either way, the ‘move’ could materialise either on Monday or Tuesday, a senior co-op official told the state broadcaster.

Some media outlets reported that the government was looking to raise up to €2bn.

Last month the co-op bank opened a virtual data room to be used by potential investors to securely exchange data and analyses, as the lender seeks to reduce the state’s share.

The process launched by the bank has two parts, one offering the choice of acquiring the bank as a licensed entity, or part or all of its assets and liabilities.

The process closed on March 29. Potential investors are to be given time to submit binding offers, with the month of May now being cited as the end of the process after the move was deemed a success by the level of interest shown by investors. .

The co-op bank was recapitalised with €1.67bn in taxpayer money in 2014 and 2015, but it is struggling with some €6.4bn in non-performing loans (NPLs), accounting for more than half of its loan portfolio.

Yiannis Stavrinides, head of the bank’s Strategy and Communications Service, said the lender would be making it harder for customers to break certificates of deposit, as it emerged that several depositors were scrambling to cash out.

He said the bank has reminded staff that CDs with a fixed maturity cannot be broken. Exceptions would be made only in certain cases, such as where people can demonstrate they need the money to pay for healthcare bills.

Seeking to assuage customers’ concerns, Stavrinides said the co-op bank would emerge stronger from the privatisation process initiated by the government.

Source: CyprusMail

The tenant has the right to peaceful enjoyment and unobstructed use of the property rented without any interference by the landlord, regardless of the type of the tenancy whether it is contractual or statutory. This right may arise from an expressed or implied term of the tenancy agreement and the tenant is entitled to the property from the commencement of the tenancy and to remain in peaceful possession for the whole of its duration. Where there is a breach, the landlord may be ordered by an interim prohibition order to cease any interference that hinders the tenant’s freedom in exercising his rights and to restore him in the situation he was prior to the breach. The term peaceful enjoyment operates in favour of keeping the tenant in possession and enjoyment of the property for all purposes, and there is a breach where ordinary and lawful use is violated even by actions taking place outside the property. For example, placing a scaffolding in front of a rented shop that prevents the tenant from carrying out his business, placing a vehicle or other obstacle at the entrance of the shop or at the emergency exit or in the parking area of the shop, constitute acts of breach of the right to peaceful enjoyment of the rented premises.

The protection of the above right of the tenant implies safeguarding the lawful possession and use of the premises and that the landlord or his representative will not carry out any acts that substantially interfere with it. It does not extend to acts of third parties or relatives of the landlord who are beyond his control. The matter was dealt with by the Supreme Court in a judgment issued on 27.3.2018, where the decision of the Court of first instance to issue a perpetual prohibition order against the landlord and/or his representatives and/or any other persons who take authority from him and/or act on his instructions and/or authorisation and/or at his orders and/or on his behalf, to prevent in any way the peaceful enjoyment and use of the premises by the tenant. The tenant claimed that the landlord’s son executed certain actions inside and outside of the premises, such as placing a pot, bricks and a net on the ramp to be used by disabled persons. The Court of first instance held that landlord ratified his son’s actions, violating the tenant’s right for peaceful enjoyment and use of the premises; it also considered that persons who are close relatives of the landlord act on his behalf or with his consent and knowledge. The Supreme Court held that the Court of first instance did not justify its judgment and it only ascertained the actions, without giving any explanation how and why these actions interfered substantially with the tenant’s right to lawfully enjoy the premises.

The Supreme Court observed that the right to peaceful enjoyment and use of the premises consists not only of the undisturbed and uninterrupted possession but also of the enjoyment of the premises by the tenant for all ordinary, lawful purposes, without any disturbance by the landlord or the persons he authorises. As a general rule, a temporary disturbance of enjoyment, which does not interfere with the possession of the premises by the tenant, does not constitute violation of his right. However, when there is a substantial interference in the normal use and lawful enjoyment of the premises, there is a breach even if there is no intervention in its possession. Interference which is not substantial does not constitute a breach. An action may be considered an interference even when it is executed outside the premises, without requiring direct or natural intervention. Where there is a substantial interference in the normal use of the premises by the tenant, is a matter of fact and degree. The Supreme Court added that the said right does not extend to illegal actions by third persons who have no ownership right over the premises. This right does not ensure the protection of the tenant from the interference of persons who are beyond the control of the landlord. In particular, the parent-child relationship does not require the parent to prevent his or her adult child from causing any loss or damage to another person. Moreover, the close relationship between two persons does not create itself a relationship between a representative and a principal. Hence, the Supreme Court set aside the order of the Court of first instance and its judgment for damages and costs.

Source: CyprusMail

Despite the sizable and sustained improvement in the island’s economy, private sector indebtedness remained high, putting pressure on banks and limiting new lending, the International Monetary Fund said.

In its staff concluding statement of the second post-bailout program monitoring mission, the IMF urged Cypriot authorities to amend foreclosures and insolvency laws in a bid to tackle the high stick of non-performing loans (NPLs) and restart structural reforms.

The IMF, which along with the EU and the ECB, had financed Cyprus’ €10bn bailout in 2013, noted that economic growth continued to accelerate, supported by construction, tourism and professional services while unemployment dropped further.

“However, despite a sizable and sustained improvement in macroeconomic conditions, private sector indebtedness remains extremely high and continued weak payment discipline has kept nonperforming loans at very high levels,” the statement said. “The need for additional provisions and limited opportunities for new lending continue to weigh on banks’ profitability.”

The IMF said it expected the rapid pace of economic expansion to continue with GDP projected to grow by around 4 per cent during 2018-2019, “underpinned by a pipeline of mainly foreign-funded, large construction projects, notwithstanding somewhat slower growth in private consumption due to better compliance by households with regard to their contractual debt obligations.”

The statement said Cyprus is not expected to have problems repaying its debt, under a baseline scenario, although that could change if significant contingent liabilities from banks’ distressed assets materialise, an excess supply of luxury properties were to generate a new boom-bust cycle, or fiscal discipline were eroded by yielding to spending pressures.

“Strengthening payment discipline, avoiding pro-cyclical policies and adopting macro-critical structural reforms would help preserve financial stability, protect the downward trajectory of public debt, and support balanced and durable growth,” the fund said.

To achieve a sustainable and durable reduction in NPLs, Cyprus would have to strengthen its payment culture, the IMF said.

That would entail amending legal frameworks for insolvency and foreclosure to incentivize borrowers to engage with banks to reach mutually-agreeable restructuring solutions based on commercial terms.

Limited, well-targeted fiscal support to lower-income distressed borrowers can strengthen their financial viability and promote payment compliance throughout the duration of the loan.

Reliance on third-party loan servicing companies should continue and be made fully operational, and any NPLs transferred to nonbank entities should not be merely warehoused.

“The recently-announced search for strategic investors in the Cyprus Cooperative Bank is a welcome development and should proceed in a smooth manner.”

The IMF said the government should withdraw incentives supporting the construction sector and a durable mechanism for keeping the public-sector wage bill in check should be instituted.

It should also restart structural reforms; the effectiveness of commercial claims enforcement and the efficiency of the courts should be strengthened to improve the payment culture and investment environment.

Plans for expedited investment procedures while also phasing out incentives for construction could attract capital into innovative sectors and help diversify the sources of GDP growth.

Corporate governance and operational efficiency should be strengthened in key semi-governmental and private entities to modernize the economy and make it more flexible.

Source: CyprusMail

Finance Minister Harris Georgiades has said that investor interest for the Cyprus Cooperative Bank is significant.

Georgiades who was replying on Wednesday evening to a question on the matter after a meeting with Citizens Alliance President Giorgos Lillikas said that on the basis of the information he has so far "there is investor interest and rather significant at that", but added it would be best to wait until the end of tomorrow in order to have a full picture. He did not wish to elaborate further.

Referring to the meeting he said they discussed the banking system and various ways forward as regards non performing loans (NPLs) which he said is the last problem left from the economic crisis.  The Finance Minister said he asked for Lillikas` support in Parliament when legislative measures are submitted by the government and expressed the view that the problem of NPLs will be able to be effectively dealt with collectively.

On his part Lillkas thanked Georgiades for briefing him and expressed his satisfaction, among others, because a committee of experts which was decided at Political Leaders Council recently to formulate proposals on dealing with the problem of NPLs will be convened after Easter.

Cyprus Cooperative Bank (CCB) Ltd provided access on March 19, 2018 to a virtual data room in order to attract investors to the bank`s share capital, aiming to reduce the state`s stake in its ownership structure.

The deadline of this invitation for expressions of interest is on Thursday, March 29, 2018, by 1200 (London time).  After this period the interested investors will have time to register their binding offers. CCB  has appointed Citigroup Global Markets Limited as its exclusive financial adviser on the process.

Source: Stockwatch

The Bank of Cyprus CEO John-Patrick Hourican on Wednesday urged the business community in Cyprus to increase the legal and political pressure to move towards a faster solution to the issue of non-performing loans (NPLs).

In his closing remarks at the Business Leaders Summit 2018 in Nicosia, Hourican stressed that tolerance of NPLs remains a major hurdle. He also said that of €7bn in troubled loans only one-third concerned truly vulnerable borrowers, but this was causing too much protection for the whole.

“We need to move beyond that,” he said. “Tackling that now leaves us in control of our destiny.”

Hourican also drew attention to the challenges faced by democracies, saying that Cyprus must be alert because it is in a vulnerable region.

He also referred to recent diplomatic incidents in relation to the recent murder attempts on a spy and his daughter in the UK and said that Cyprus should be alert because of the association the country had with Russia.

“It feels to me like the world is just getting a little more dangerous in rhetoric and indeed dangerous actually. We need to be alert to that in Cyprus because we rely on the expression of our safety as a place to come, to ensure our continued economic success,” Hourican said.
During the event, top business executives in Cyprus shared their experiences and talked about the future challenges they face.

Source: CyprusMail

Cyprus is promoting three projects that were selected by the European Commission as projects of common interest, because of their benefits to the European energy market, President Nicos Anastasiades said on Tuesday.

The president was addressing the 9th Mediterranean Forum on Oil and Gas in Nicosia, telling delegates that recently, two of the projects had secured EU funding. Specifically, €101 million will be allocated to the CyprusGas2EU project, while the EastMed Pipeline had been awarded €34.5m for technical studies.

The CyprusGas2EU” project aims at allowing the transport of gas from the Eastern Mediterranean to Europe. By 2020, Cyprus will construct a Floating Storage and Regasification Unit (FSRU) in order to import gas in the form of LNG from international markets, Anastasiades said. The EastMed Pipeline aims to transport gas from Cyprus and the Eastern Mediterranean to Europe via Crete and mainland Greece.

A third project, the EuroAsia Interconnector, is an electricity connection between Israel, Cyprus and Greece that is supported by all three governments.

“We intend to continue exercising Cyprus’ rights as an independent and fully integrated Member State of the European Union, proceeding with our exploration programme as planned,” said Anastasiades.

He said this was also part of a broader policy in that the discoveries of significant quantities of natural gas in the Eastern Mediterranean, as well as potential future discoveries, could be a driver for stabilization in the region.

“After all, together with the respect by all parties of international law and national sovereign rights, this is the kind of stable and predictable environment that we are obliged to jointly create, in order to bring in the multibillion investments needed for developing the East Med’s hydrocarbons wealth,” he said.

Anastasiades also addressed Turkey’s provocations in the island’s exclusive economic zone recently.

The president said Cyprus’ policy has traditionally been based on regional cooperation and the establishment of long-lasting relationships with all neighbouring countries.

Source: CyprusMail

he ECB, ESM, IMF and the European Commission call on Cyprus to renew reform momentum, reduce the current level of NPLs through legislation and maintain sound public finances, in a report compiled during the post program surveillance mission conducted this week. 

The European Commission staff, in liaison with staff from the European Central Bank (ECB), visited Cyprus from 19 to 23 March to conduct the fourth post-program surveillance (PPS) mission. The mission was coordinated with an International Monetary Fund (IMF) post program monitor (PPM) mission. Staff from the European Stability Mechanism (ESM) also participated in the mission on aspects related to the ESM`s Early Warning System.

According to the press release, "the ongoing strong recovery and the renewed reform mandate following the presidential elections provide a window of opportunity to reduce the key vulnerabilities of the Cypriot economy". 

The mission states that growth in 2017 outpaced projections and "should remain robust, albeit somewhat decelerating over the medium term". "Growth was broad-based, with buoyant tourism and construction benefitting other sectors of the economy. Consumption and investment were the main drivers of growth", according to the auditors. 

"The labour market situation continued to improve, with employment increasing across most sectors and unemployment rapidly falling", state the auditors, but they warn that "despite the very favourable economic conditions, the share of non-performing loans (NPLs), private and public debt as well as youth unemployment remain high, albeit on a declining trend, while inflationary pressures continue to be weak".

"In addition, the persisting current account deficit warrants close monitoring, given the high level of external debt and negative households` savings", they mention.

Furthermore the report states that "the positive macroeconomic environment combined with prudent fiscal policy have resulted in a remarkably strong fiscal position, yet a continued prudent fiscal stance remains warranted given the still-high level of public debt and risks to the fiscal outlook". 

"Fiscal performance once more outperformed projections in 2017, mainly driven by buoyant tax revenues and, to a lesser extent, lower-than-expected expenditure", finds the report but "uncertainties and risks remain, such as contingent risks from the banking sector and the fiscal impact of the healthcare reform".

The auditors call for "a continuous prudent budgetary policy remains essential to ensure that temporary revenue windfalls do not give rise to permanent increases in expenditure and to safeguard fiscal sustainability in line with the requirements of the preventive arm of the Stability and Growth Pact".

Addressing challenges in the banking sector should remain a policy priority due to the still high level of NPLs and negative profitability. The stock of NPLs has declined gradually but remains one of the highest in the EU and the progress made among the banks has been uneven.

"Loan restructuring continues, albeit becoming more challenging as the pool of NPLs for which negotiation is an option is dwindling", reads the report and goes on as to say that "nank profitability remains weak amid the need for provisioning for NPLs. On the other hand, new lending is recovering, supported by the strong macroeconomic environment".

The mission highlighted the pressing need to accelerate NPL reduction across banks and in particular in the ones lagging behind.

In this context, "it is of utmost importance to improve the payment culture and that new schemes initiated by the authorities contribute in this respect and are in line with international best practices", reads the joint ECB, ESM and Commission rerport.

It is also urgent "to introduce the necessary legal amendments to make full use of all available tools, including to the insolvency and foreclosure frameworks, and to create conditions for a well functioning secondary market of loans and loan securitisation".

"Tangible progress in all these areas is crucial for the banking sector to leave legacy issues behind and adequately support the real economy" they say and they reiterate that in this respect, "it is important that the recently initiated search for investors in Cyprus Cooperative Bank proceeds in a transparent and orderly manner".

"Renewed structural reform commitment by all national stakeholders is necessary to maintain growth over the medium term and safeguard fiscal sustainability", as they propose and more specifically they state that "given its overarching impact on the functioning of the economy and its strong link to the reduction of NPLs, a swift completion of the justice system reform is needed, including the establishment of a commercial court, the update of the civil procedure rules and the adoption of legislation on improving claim enforcement".

Moreover they call for "the completion of the reform of the public administration", that "would enhance the efficiency of the public sector and support fiscal sustainability".

The mission also encouraged the authorities and other stakeholders to "step up progress in other essential areas, including the implementation of the national healthcare system in a fiscally-sustainable way, the on-going reform of the electricity market, and the establishment of an efficient title deeds issuance and transfer system".

Finally, the mission underlined the importance of continuing efforts to enhance the economy`s growth potential, notably through improving the business environment and attracting further growth-enhancing investment, as well as prioritising key measures included in the action plan for growth.

Source: Stockwatch

A big find by ExxonMobil in block 10 of Cyprus’ Exclusive Economic Zone would “change the equation for the region in a big way” former chairman of the Cyprus National Hydrocarbons Company and natural gas expert Charles Ellinas has said.

Ellinas, who was addressing the afternoon session of the Eastern Mediterranean Gas conference which takes place today and tomorrow, in Nicosia, focused mainly on Egypt’s prospects in becoming an energy hub in the region.

He spoke of the introduction of new legislation recently which opens up the energy market to private companies he expressed the view that if Egypt manages to become an energy hub, it would be a positive development for the region as a whole.

At the same time, he reiterated his view that low natural gas prices “are not going to go away.” “They are here forever and we have to find ways to work with them. If we cannot, then we cannot sell. It is as simple as that,” he stressed.

Referring to prospects within Cyprus’ EEZ Ellinas said that “there are serious prospects and I am really hopeful that the drilling by ExxonMobil in block 10, which I am sure is going to happen now by the end of the year, is going to be very successful and if it is, it will change the equation for the region in a big way.”

Replying to a CNA question, later on he clarified that his hopes on the possibility of a good find in block 10 are based on the results of the seismic surveys.

Asked how he would propose to overcome the hurdle of low natural gas prices internationally he replied that if a significant discovery was made in block 10, then it would be possible that ExxonMobil would be interested in taking part in the project of a large LNG terminal in Cyprus of at least four trains, in the context of which reserves already discovered in blocks 12 and 6 of EEZ could be also used.

ExxonMobil, he noted, could use new technologies for natural gas liquefaction, which greatly reduce the cost and which in turn would make Cypriot natural gas competitive enough to export.

ExxonMobil and Qatar Petroleum (QP) acquired an exploration concession for block 10 as part of the third licensing round in April 2017.

In a press conference last September, Tristan Aspray, ExxonMobil Exploration’s Vice President for Europe, Russia and the Caspian Sea, said that that the company’s future steps in Cyprus will depend on the exploration results and did not rule out the possibility of Exxon participating in the construction of an LNG plant in Cyprus.

In his address at the conference, John Royal President and CEO of the Gulf Publishing Company, who organises the conference, spoke of the LNG’s potential. Based on our research and exposure, he said, gas will grow as the key energy source in the coming 20 years and we think that LNG will be the fastest growing way to distribute the gas.

On Cyprus he said that “you can see the level of expertise drawn to Cyprus,” adding that “I think that it speaks very well towards the potential here.” 

Referring to ExxonMobil, Royal said “the saying in the industry is that nobody does due diligence better than ExxonMobil so when they come in and make an investment it is usually a pretty good bet.”

On her part, Gina Cohen, Gas Consultant for the Eastern Med focused in the missed opportunities and delays in the development and exploitation of the natural gas finds in Israel.

Referring to Cyprus she said that the only thing discussed is exporting. It is good, she noted, but added that “exporting will only give you money, it will not give you security or environmental benefits.” According to Cohen, the fiscal benefit will be less than 0.5% of your country’s budget. “My view is you should be getting a small pipeline to Cyprus and using the gas in Cyprus,” she pointed out.

Source: Stockwatch