A scheme aimed at helping vulnerable homeowners repay their mortgages is expected to receive the green light from the European Commission sometime in November without any radical changes, Finance Minister Harris Georgiades said on Monday.

The scheme, dubbed Estia, Greek for home, has been heavily ciriticised by experts as it appears in its current form to be a godsend for strategic defaulters.

Speaking before the House finance committee, Georgiades said he expected the commission’s competition watchdog to approve the scheme within November. The commission is making sure the scheme does not constitute state aid.

The minister conceded the scheme was not perfect but it was necessary in the effort to reduce the most difficult category of bad loans, the ones linked to primary residences worth up to €350,000.

“The scheme is not perfect and there cannot be such a perfect scheme,” he said.

The scheme as proposed enables households and small and medium-size enterprises which have non-performing loans with primary residence worth up to €350,000 as collateral, an annual income of up to €50,000, and net assets worth up to 125 per cent the value of their home (e.g a household with a home valued at €350,000 and other assets valued up to 125 per cent of that, which is €427,000 is still eligible for this scheme) to benefit by having one third of their monthly loan repayment subsidised by the taxpayer.

Many articles have been written about the unfairness of the scheme on those who, by contrast, scrimp and save to meet their loan payments and who will not qualify for relief.

Also unfair, the critics say, is that under the scheme the banks will take a 20 per cent hit on the loans of defaulters but creditworthy customers must pay up in full or risk becoming defaulters themselves if they come up short.

Georgiades suggested it was normal for questions to be raised and moral hazards to emerge but it “is a necessary scheme to tackle the most difficult category of non-performing loans”.

Based on the dialogue with the competition watchdog, the scheme is expected to be approved inside November, he said. After that it will be put before the cabinet, which will make the changes dictated by the European Commission.

“I foresee that the scheme will be approved based on the ongoing dialogue, this is the very clear indication we have received,” the minister said. “I do not expect the final amendments to be radical, I do not expect them to change the substance of the scheme or its basic aspects.”

The minister said €13.9bn worth of loans have a primary residence as collateral while €8.7bn worth of loans have primary residences priced at €350,000 as collateral.

Around 40 per cent of total loans with primary residences were non-performing, he added.

Georgiades said the scheme was necessary to deal with the €20bn in bad loans — €11bn on bank balance sheets – which are still a serious problem for the economy.

“The toxic burden inside the banks is much more manageable but the percentage is high and European supervisors does not seem satisfied even with these rates,” he said.

Source: CyprusMail

The Republic of Cyprus will proceed with its energy plans, exactly as foreseen, Minister of Energy Yiorgos Lakkotrypis said on Sunday from Paphos.

Asked if the Republic of Cyprus has taken any steps to address Turkish provocations in Cyprus’ Exclusive Economic Zone, he said that the necessary measures have been taken in cooperation with the companies that have drilling licenses and the countries they come from.

The Republic of Cyprus will continue calmly implementing its energy plans, exactly as foreseen, he concluded.

Source: CyprusMail

Austria’s low fare airline Laudamotion has announced that it is launching flights from Larnaca to Vienna, twice a week, starting in October.

Fares started from €19,99, a press release issued by the company said on Friday.

“Our routes work because we have the right offer for price-sensitive customers. In particular, with our new routes, I`m sure to increase the traffic with our new non-stop service to and from Vienna” said Andreas Gruber, Managing Director.

Maria Kouroupi, Hermes Airports Senior Manager Aviation Development, noted that “the timing of the airline’s entry in the market supports the connectivity and proves its confidence in the winter product of Cyprus”.

Source: Stockwatch

Altamira Asset Management Cyprus is changing the way we search for real estate in the Cypriot market, by launching a new pioneering website today where properties across Cyprus will be available exclusively for sale.

According to a statement, at a recent event, the company presented its staff with the new real estate website, through which Altamira intends to boost its digital presence and become the first point of reference for any potential investor. Altamira’s online platform launches with over 400 properties immediately available for sale, while new opportunities will be added weekly at attractive prices from the portfolio of over 3,000 properties that it manages.

The website, www.altamirarealestate.com.cy, combines a modern and easy-to-use design, with a rich content and user-friendly environment, which reflects Altamira’s international level of service. More specifically, users will be able to navigate easily and swiftly through the innovative and interactive website to find a broad range of opportunities for commercial and housing units, office spaces, shops, tourist complexes, development works, industrial properties as well as land to develop in both urban and rural areas.

Thanks to its practical design, the website enables users to search and choose the real estate they are interested in through an interactive map, while also providing a variety of options and the specialised information they require for each property. Furthermore, visitors will be able to come into contact with Altamira’s network of real estate advisors, with broad coverage in all Cyprus towns, who can guide them through the most suitable investment opportunities that will fully meet their specific needs.

Spanish Altamira is the top asset management servicer in Europe. The creation of the website is part of the international expansion of its activities, with Cyprus being the first country after Spain where the digital platform for real estate management and disposal has been implemented. The platform on the one hand will channel the high level of the company’s expertise, and on the other, highlights its keen interest in the Cypriot market.

Source: Stockwatch

Industrial turnover in Cyprus recorded an increase in July and during the first seven months of this year, data released by the Cyprus Statistical Service show.

In particular, according to the data the industrial turnover index for July 2018 reached 143.5 units (base 2015=100), recording an increase of 6.5% compared to July 2017.

For the period January – July 2018, the index showed an increase of 6.5% compared to the corresponding period of the previous year.

In manufacturing, the index for July 2018 reached 140.7 units, recording an increase of 5.6% compared to July last year.

Source: Stockwatch

A technical team from the EU Directorate General on Migration will visit Cyprus on Tuesday to meet officials and discuss additional assistance to Cyprus which is facing increased migration flows.

The visit comes following the discussions held in Nicosia between Commissioner for Migration, Home Affairs and Citizenship, Dimitris Avramopoulos with the Cyprus ministerial committee last month as well as Nicosia’s actions to the EU institutions over the increased influx of migration to the island.

“At the instructions of Avramopoulos, a technical team of the DG General on Migration will visit Cyprus to meet Cypriot officials to examine ways for additional assistance through the Emergency Funds of the Asylum Funds,” Interior Minister Constantinos Petrides told CNA.

The visit was agreed during the meeting between Avramopoulos and the ministerial committee.

According to Petrides, the meetings will determine the additional assistance to be granted to Cyprus both by the Emergency Fund and other funds.

Source: CyprusMail

Fitch Ratings has upgraded Cyprus’ sovereign rating to investment grade, ‘BBB-‘ from ‘BB+’, with a stable outlook as the island expects a 2.7 per cent fiscal surplus this year and continuous growth that will boost receipts.

The upgrade followed similar action by Standard and Poor’s last month.

Finance Minister Harris Georgiades took to Twitter to thank everyone for their contribution.

“Forging ahead,” he added.

Fitch said the upgrade reflected the buoyant fiscal revenue and prudent fiscal policy, which will see Cyprus record a fiscal surplus of 2.7 per cent of GDP in 2018, compared with a target of 1.7 per cent in the April 2018 Stability Programme Update.

“We forecast the fiscal surplus will remain high at 2.4 per cent and 2.2 per cent of GDP in 2019 and 2020, respectively, compared with 3.1 per cent and 2.9 per cent targeted in the 2019 Draft Budgetary Plan. Robust economic growth will boost fiscal receipts, while previously adopted hiring freeze and collective agreements will likely limit growth in the wage bill.”

The rating agency said the island’s public debt will remain on a firm downward trajectory despite a one-off expected increase this year following the placement into Cyprus Cooperative Bank (CCB) of €3.19bn in government bonds (15.5 per cent of GDP) to facilitate the acquisition of part of the state-owned bank by Hellenic Bank.

The move will raise the debt to 104.4 per cent at end-2018 from 95.7 per cent in 2017.

“However, we expect large primary surpluses, robust growth and contained nominal effective interest rates will reduce GGGD/GDP to 70 per cent of GDP by 2027.”

The ratio of non-performing exposures (NPEs) to total loans fell to 40.3 per cent in the first half of the year from 44 per cent in 2017, partly supported by the announced securitisation by Bank of Cyprus (BoC) of €2.7bn gross NPEs.

The acquisition by HB of CCB’s good assets and the subsequent transfer into a run-off entity of CCB’s €5.7bn NPEs portfolio are estimated to have led to a further decrease in NPEs to 30 per cent in September 2018.

“This will support a substantial decrease in contingent liabilities stemming from the banking sector, although these remain large.”

Private sector debt and non-performing exposures remain high, however, at 226 per cent and 97 per cent of GDP in 1Q18, respectively, and constrain credit growth.

Household and corporate debt stood at 105 per cent and 121 per cent of GDP and a large part of the recent decline in such debt stemmed mostly from high GDP growth, debt-to-asset swaps, loan write-offs, rather than loan repayment.

“We expect private sector deleveraging will accelerate, however, as enforcement of new legal amendments, improving earnings and recovering house prices foster debt repayment. Economic growth will likely remain resilient to a faster resolution in NPEs as rising wages, a dynamic labour market and high household savings will help preserve disposable income and smooth consumption.”

Source: CyprusMail

The increase of residential property prices remains moderate the Central Bank of Cyprus (CBC) has said as the residential property price index in the second quarter of 2018 marked eight consecutive quarters of growth.

In the second quarter of 2018, the residential property price index, compiled by the CBC (houses and apartments) rose by 0.3% with the index of house and apartments rising by 0.2% and 0.7% on a quarterly basis.
 
On an annual basis the residential property index rose by 1.7% in the second quarter of 2018.
 
Prices in all districts rose with the exception of Pafos which registered a marginal reduction of 0.2%
 
“The real estate sector in Cyprus follows a positive course. The prices show increase which are however moderate except from certain areas,” the CBC said.
 
The CBC says that residential property prices in Limassol especially in apartments showed significant increase for five consecutive quarter notably in the coastal areas where price growth is the largest compared with all other areas of Cyprus.
 
The CBC attributes this significant rise to the fact that Limassol is the most densely populated district in Cyprus, the operation of the Cyprus University of Technology in the city centre, demand for apartments from Airbnb, the construction of the marina and the decision of the government to operate the island’s main casino in the city.
 
The CBC also said price increase in Limassol are affected by the purchases of residential property by foreigners in the context of the Citizenship by Investment Scheme, noting however that these purchases are not financed by the banking system and are not factored in in the CBC residential property index.

Furthermore, the CBC warned over a possible rise in supply of mainly commercial real estate due to the reform in the legal framework governing foreclosures, insolvency, loan sale and the approval of the law on loan securitisation which may lead to the reduction of non-performing loans in Cyprus but may lead to an increase in supply or real estate property.

Source: Stockwatch

Blue Air, the low-cost Romanian airline, has stepped in to offer some Cobalt customers rescue fares after Cobalt unexpectedly suspended operations last night.

The airline is offering a selection of reduced fare flights for a limited time to customers who are traveling between October and March and who have a canceled flight reservation.

They are offering rescue fares on the following routes: London (Luton) - Larnaca and Larnaca - London (Luton), Larnaca - Athens, Thessaloniki - Larnaca, Larnaca - Thessaloniki, Athens - Larnaca routes. Prices including taxes start at 69 EUR, one way, to/ from Athens and Thessaloniki and from 99 EUR, one way, to/from Luton(Luton).

The rescue fare is subject to both seat availability and terms & conditions - further details here:
Blue Air: Cobalt Rescue Fares

Cobalt posted a statement on its website late last night confirming it was ceasing operations:

"Cobalt regrets to announce that it will be canceling all flights as of 23:50pm on October 17, 2018 due to indefinite suspension of Cobalt’s operations.

As a result, future flights or services provided by Cobalt will be canceled and will no longer operate. Passengers who have un-flown tickets are instructed not to go to Larnaca Airport or any departure airport tomorrow, 18 October 2018 as no Cobalt flights will operate and no Cobalt staff will be present.

For refunds, please contact your credit card provider or Travel Agent.

We sincerely apologize once again and would like to thank our very loyal customers for their support over the last two years of Cobalt operations."

The transport ministry said in a statement that passengers expecting to fly with Cobalt on Thursday should secure one-way tickets in economy class from another airline, and keep their receipt for their reimbursement.

Passengers expecting to travel with the airline for the seven days following Thursday will be informed promptly about travel procedures, the ministry said.

It was not immediately clear how many passengers would be affected, but nine flights had been scheduled to arrive and further nine to depart at Larnaca airport on Thursday.

Source: NewsinCyprus.com

Cobalt airlines, the largest Cyprus-based airline, was expected to ground its flights as of midnight on Wednesday, after reports said that the company failed to reach a deal with a potential European investor.

According to Economy Today, the company has only €15 million its accounts, which are expected to be used to pay the employees.

The transport ministry told the website that they are on standby to ensure that no passengers are affected by the issue.

In statements on Wednesday night transport minister Vasiliki Anastasiadou said she could neither confirm nor deny the news the airline was heading towards closure.

But she said: “Without having any legal obligation, we will of course ensure that we help the passengers.”

Anastasiadou added that the ministry is expecting official information from the airline on Wednesday night, and that they will release a statement following the company’s statement.

All of the airline’s flights for Wednesday are expected to arrive as scheduled with the last one coming in to Larnaca International Airport from London’s Heathrow at 12:10am, according to the Hermes airport’s website.

Calls to Cobalt’s 24/7 customer service centre from both their local number and their number for individuals that are abroad went unanswered.

In early October rumours began circulating that the budget airline was facing cash-flow problems after two of its aircraft were grounded for two days, causing delays to certain flights.

Reportedly, the reason was that Cobalt had not paid the monthly leasing fee to the American company that owns the two planes.

The company posted losses for the year 2017, while in May this year the airline sacked its CEO Andrew Madar.

According to local media, earlier this week the Air Transport Licensing Authority (part of civil aviation) summoned Cobalt officials to a meeting.

Civil aviation has been monitoring the airline for some time but reports said that to date the airline has been consistent with all its payments (salaries, etc) as well as with its aircraft maintenance obligations, while its flight operations are unaffected.

Officially, Cobalt has declined comment. But sources within the company attributed the liquidity problems to a difficulty by Chinese investors to export capital due to Chinese government restrictions.

The airline’s main stockholders are AJ Cyprus, holding 49 per cent of the shares. AJ Cyprus is owned by Chinese Avic Joy Air.

The airline employs around 200 people.

Cobalt stepped in to replace bankrupt Cyprus Airways, which shut down in January 2015.

The low-fare airline began operating in 2016. Its fleet consists of two Airbus 319s (144 seats) and four Airbus 320s (156 seats).

In 2018 the airline flew to 23 destinations.

Source: CyprusMail