Six thousand foreclosure requests filed at land registry

Angelos Anastasiou
-
5
Six thousand foreclosure requests filed at land registry

foreclosureBANKS have filed 6,000 foreclosure requisitions with the land registry which remain pending due to heavy workloads, AKEL MP Yiannos Lamaris has said.

Current legislation offers no protection to homeowners’ primary residence, meaning that if the 6,000 requisitions were to be pushed through, the properties would be foreclosed, prompting the submission of a bill conditionally protecting families’ primary residence to the House Legal Affairs committee.

After consolidating three pertinent but separate bills into one, the Legal Affairs committee has decided to resume discussion in two weeks, after the government’s law office has submitted its opinion.

According to the committee’s president Sotiris Sampson, the legislation seeks to avoid creating homeless families by protecting their primary residence against foreclosure requisition, offering similar protection to premises owned by small-to-medium enterprises (SMEs).

“Distressed debtors who have lost their income or otherwise fallen into financial hardship will be eligible to apply for protection from foreclosure requisitions for a specified period of time, at the end of which they may either wish to apply for further protection or resume payment,” he said.

Sampson said that as the law will apply following the exhaustion of loan restructuring efforts, it could prove an incentive for banks to ensure the workability of restructuring agreements.

Lamaris expressed the view that a law protecting the primary residence will be a major step towards alleviating citizens’ concerns.

He said that limiting the scope of the protection by imposing criteria based on value or area will “alter the philosophy of the law”, and clarified that with regard to SMEs the protection will apply to businesses with a maximum of ten employees or annual turnover not in excess of €2 million.

He clarified that the proposed legislation aims to offer protection only in cases where debtors have lost their source of income and are unable to repay their dues.

“Despite the banks’ assurances to the committee that foreclosures are last on their list of options, the House feels that legal protection should be offered as soon as possible”, he said, concluding that the fact that 6,000 foreclosure requisitions remain pending and are not expected to proceed soon at the land registry due to heavy workloads, is not sufficient protection.

Six thousand foreclose requests filed at land registry

Troika anticipates property market recovery

Editorial
-
16
Troika anticipates property market recovery

property market recoveryINTERNATIONAL lenders believe that the property market will pick up in 2014, according to the chairman of the Cyprus Land and Building Developers Association (LBDA) Pantelis Leptos.

The association met with Troika technocrats yesterday to present their estimations regarding the course of the real estate market and the problems faced.

“What the Troika agrees upon is that if we want to restart the economy, the real estate sector must be supported. They see an important improvement of the situation in 2014 in terms of real estate,” Leptos said after the meeting.

Commenting on the Troika’s optimistic prediction, Leptos noted that there have been new investments from abroad worth €500 million over the last year.

“These are fresh investments and money that the economy needed and the Troika acknowledges that these investments were made at the most difficult point in the last decades. So these are positive things and there is more that we can do,” he added.

The chairman of the association also noted that “Pimco has miscalculated real estate prices in its predictions and the Troika agrees that we will not see such predictions verified in Cyprus”.

This view is also shared by the chairman of the International Real Estate Federation (FIABCI) Lakis Tofarides who refuted Pimco’s bank stress test estimations and pointed out that such price reductions would only become a reality in the case of mass property repossessions.

“I do not expect that there will be mass repossessions tomorrow.

“I do not expect this because it would bring destruction to the banking sector itself and by extension the country’s economy,” Tofarides said.

However, FIABCI chairman noted that property prices have reached their lowest point taking into consideration the development cost of a new home compared to those sold.

Real estate sales have been reduced by 60% while sales to foreigners have reached more than €500m.

Leptos outlined the association’s suggestions to help kick-start the sector including the abolition of transfer fees, reduction of capital gains tax in case of reinvestment, reduction of bureaucracy and speeding up the issuance of title deeds.

With regard to repossessions, he said that since Cyprus is in an emergency situation, people should not be expected to live up to their obligations as normal, noting that “adequate time should be allowed to allow the Cypriot economy to return to normalcy”.

Property Market

Building sector ‘dictatorship’ says union

Peter Stevenson
-
0
Building sector ‘dictatorship’ says union

Building sector construction workersUNIONS have accused building contractors of not paying employees on time, of cutting wages, and in some cases having not paid workers for months.

Employees do not speak up because the fear being fired, the unions said.

According to trade unions PEO and SEK, around 90 per cent of builders have not been paid on time and in many cases have not had their social insurance paid for months and possibly years in certain cases.

Yiannakis Ioannou from SEK said that some builders who are paid on a weekly basis have been left unpaid from anywhere between one and five weeks and that some construction companies only last week managed to pay their employees for working during the Christmas period.

“Instead of giving their employees’ salaries some companies are giving them letters of notice letting them go,” he said.

Asked why employees have not gone on strike or protested, Ioannou said workers do not want to enter into a conflict with their employers.

“But those who have been let go instead of being paid will not sit idly by and you will see a reaction,” he said.

Ioannou added the fact social insurance had not been paid for many meant they would have trouble with pension payments down the line.

“There is a dictatorship in the construction sector today, people are afraid to speak and they have had all their rights, which they have been fighting for years to obtain, taken away,” he said.

Michalis Papanicolaou from PEO said that construction companies were taking advantage of the current financial situation and withholding salaries and wages.

“It is our responsibility to try and remove that sense of fear and spread the message that there needs to be understanding between construction companies and builders,” he said.

Papanicolaou added that if action was not taken then there was a real fear of the building sector collapsing.

The Cyprus Federation of Associations of Buildings Contractors (OSEOK) head Costas Roushias said he feels the current situation has been exaggerated.

“All employers are worried about is how they will pay their employees so they have money to put food on the family table at the end of the week so people claiming that companies are withholding salaries is far-fetched,” he said.

He said that if there are circumstances where people are not being paid or payment is being delayed then it needs to be investigated.

Roushias said he believes the majority of cases involve sites that have had to stop working because investment has run out and contractors were forced to take loans to pay off their employees.

He added that he hoped trade unions and OSEOK could work together to find a solution to the problem as it was in everyone’s interest to come to an amicable solution.

Building sector ‘dictatorship’ says union

Concerns over taxman control in property transfers

Staff Reporter
-
8

LAWMAKERS have voiced reservations over a bill that would stop the transfer of an individual’s last immovable property until they have paid all their taxes to the Inland Revenue department.

The House Finance Committee has asked the legal services for a ruling on a series of questions regarding the bill’s provisions, which call for a certificate issued by the inland revenue department (IRD) that all due taxes have been paid before transferring the property.

Some of the reservations concern the constitutionality of the provisions, Committee chairman Nicolas Papadopoulos said – “whether you can impose such an obligation that has nothing to do with the property, something that was judged by the Supreme Court as unconstitutional.”

Another point raised by MPs concerned rich people who owned a lot of properties and possibly owed taxes.

They would be allowed to transfer their real estate while a poor individual with a small tax debt would not be allowed to transfer their property because it was the last one.

Papadopoulos said problems might arise for banks too, as such a provision would affect the collateral held by banks.

“If the state is allowed to collect its dues first it will mean the property will have a lower value,” Papadopoulos said.

Papadopoulos said they were looking into exempting mortgages from the law but then there was a matter of also exempting sales documents already submitted to the land registry and obligations stemming from court decisions.

IRD chief Giorgos Poufos urged parties to find a solution because the situation could not go on.

Poufos said people who owed taxes moved faster and sold all their real estate before the state took action.

Concerns over taxman control in property transfers

Evidence of improving banking sector stability

Press Release
-
1
Evidence of improving banking sector stability

Improving banking sector stabilityThe Bank of Cyprus leadership believes there is evidence of improving stability in the Bank and generally in the banking sector. Nonetheless, it points out at the same time that it is fully committed to restoring the confidence of depositors and customers.

In an interview with the Cyprus News Agency, Chairman of the Board of the Bank Christis Hassapis and CEO of the Group John Patrick Hourican talked about the recent release of the first of the three fixed term deposits and the sale of the Group’s Business in Ukraine.

After the shock of the Eurogroup decisions of last March and the consolidation process, the Bank`s new Board and the new management are actively working to stabilize the Bank and restore the trust of depositors, which has gradually begun to return to the Bank as well as the banking sector in general. However, the Bank’s leadership does not this trust for granted.

“We need to keep earning their trust and we need to keep making progress in restoring the strength of the Bank”, Hourican notes.

The Bank now puts forward a new goal, empowerment through shrinking (Shrinking to Strength) and this includes the recent sale of its subsidiary bank in the Ukraine.

For the restructuring plan, Hassapis notes that it is on track, adding that the goal is to create a bank attractive to investors.

According to Hassapis, improving the stability of the deposit base and the liquidity of the Bank is also reflected in the recent release of the six – month fixed deposits, amounting to € 950 millions, which were frozen under the consolidation decree.

However they say that problematic loans remain a source of concern, estimating that amid the ongoing economic contraction, the loan portfolio will continue to come under pressure.

Full text of the interview

The Bank has just released the first of the three fixed term deposits. At the same time a large part of the Bank’s funding comes from ELA. What is the rationale which has led the Bank to release the blocked deposits?

Ch. Hassapis: The Bank’s funding comes from a variety of sources.  We have customer deposits, funding from the Central Bank in the form of ELA and ECB funding and we have the equity base of the bank. The deposit base includes €2.9bn of deposits that were blocked at the date of the bank was recapitalized.  The first £950m of these fixed deposits were due for release at the end of January and the bank had an option to roll the deposits for a further period of six months. Having established evidence of improving stability in the Bank’s deposit base and an increasing level of customer confidence, we determined that the most appropriate course of action was to release these deposits. This decision was taken after careful consideration of all the facts not least our expectation of available liquidity under various scenarios.

How do you expect the depositors of the Bank to react to the release?

John Hourican: We recognize that all of our depositors have choices and, as restrictive measures across the economy are lifted, this choice will increase.  We have seen increasing stability in our deposit base over the past few months and this is pleasing, as confidence slowly returns to the banking sector and Bank of Cyprus in particular.  We believe that our depositors will continue to support the bank but we do not take this support for granted. We need to keep earning their trust and we need to keep making progress in restoring the strength of the bank.

Have you had any disagreement with the Government or the Central Bank on releasing these deposits?

Ch. Hassapis: We made a very careful consideration of all aspects of this decision and we consulted with the appropriate stakeholders. We listened to input from various interested parties and we took into consideration their opinions in making the decision. This was a decision that the Bank Board of Directors took having carefully weighed up all the arguments. Moreover the Ministry of Finance and the Central Bank issued a joint press release on the issue. We are satisfied with customer and market reaction.

What should a holder of a blocked deposit expect and know?

J. Hourican: Although we have released the fixed deposits, they will continue to be affected by the general restrictive measures currently applicable across all banks in Cyprus. The depositors can withdraw up to 20% from the fixed deposit and place it in a current account. The rest will be placed on a one month deposit or, as we hope, the customers can opt for a deposit of a longer duration.

How is the implementation of the restructuring plan going?

Ch. Hassapis: The restructuring plan adopted by the Bank sets out a clear roadmap for the Bank over the coming few years. It is designed to make the Bank safer, smaller and relevant to Cyprus and its economy. This plan relies on our rebuilding customer trust and confidence, simplifying the business and making it attractive to investors.

We are doing well. We have completed the rationalisation of our branch network, reduced the cost base of the Bank significantly and we are on target to integrate the Bank’s IT platforms by mid-year. We are making steady progress on our business disposal agenda and you will have noted, for example, that we have recently announced an agreement to sell our Ukrainian business to Alfa Group. We have clear plans to engage with customers to help restructure their exposures and we are making progress in arresting the deterioration of asset quality across our business.

Whilst we have made a good start on restructuring the Bank, we still have much to do. We are working with our largest and our small customers to ensure loans can be serviced and repaid. We are working hard to regain the trust of depositors. We recognize that we must play our role in re-starting the Cypriot economy.

Why are you selling the Group’s business in the Ukraine?

J. Hourican: We decided, as part of our restructuring plan that our business in the Ukraine was not core to the strategy of the “go forward” Group. We are pleased with the sale of this business to Alfa Group and we are pleased that our 500 staff in Ukraine will have the prospect of a future career under a new owner.

The group is “shrinking to strength” deliberately. We have withdrawn from the Ukraine as part of a deliberate strategy to focus our scarce capital and resources primarily on our domestic operations in Cyprus.

What are you expectations for problematic loans?

Ch. Hassapis: The trends in problematic loans are of course a concern for the Bank and we need to do everything we can to arrest any worsening of the position. As the economy continues to contract, we will have pressure on the loan book and we have to counteract this with clear and deliberate actions with delinquent customers.

The way delinquent loans are reported can be confusing. The definition of Non- performing loans has changed during 2013. Most loans that have some element of restructuring are now captured for an extended period within this definition, irrespective of performance and the “NPL” classification on ours and other banks’ balance sheets will likely grow and become less meaningful.

Within the non-performing category are loans that are in arrears past 90 days and it is these loans that are the true measure of delinquency. We have seen some stabilization in the absolute level of these 90+ days overdue loans during the past few months. We would not yet characterize the trends as in reverse and, as the overall balance sheet changes shape it is of course possible that some trends and ratios will need further explanation.

One of the Bank’s main challenges is dealing with large exposures and recovering problem loans. What is the Bank’s approach on these and other exposures?

J. Hourican: The Bank’s Executive is systematically and actively engaged with our largest customers. We are working with each of our customers to ensure that we protect the bank’s interests but also that we work to ensure viable businesses are supported.  We have reorganized the bank to create a centralized, specialized division responsible for restructuring and recoveries. This is an essential feature of our business at this difficult point in the economic cycle. It is essential that the bank’s customers, large and small, meet their obligations to the Bank and work to ensure that we can recycle lending into the Cyprus economy.

The Troika is in town and you have already met with them. How were the meetings?

Ch. Hassapis: We have a very good working relationship with the Troika. We had a number of meetings where we presented on our business, the progress we are making and issues we are facing. We were, as always, very open with them and our meetings have been very productive. We look forward to continuing this cooperation and engagement throughout 2014.

How would you describe the cooperation between the two of you, given that both of you have assumed your posts in the Bank only recently?

J. Hourican We have an excellent and harmonious cooperation on a daily basis. We have created the necessary internal structures and conditions that strengthen this cooperation. Our ultimate goal is the operation and governance with the aim to serve the Group’s best interests.

Hassapis expressed his agreement with a nod of approval.

CNA/KST/GS/TNE/MM/2014

ENDS, CYPRUS NEWS AGENCY

Qatar Investment Authority targets Limassol

Editorial
-
2

THE Qatar Investment Authority (QIA) has shown interest into investing in property in the Limassol area, said Christodoulos Angastiniotis, head of the Cyprus Investment Promotion Agency (CIPA) on Saturday.

Speaking on a CyBC radio talk-show, Angastiniotis said that within the coming days a delegation from the QIA will visit the island to discuss the possibility of investments in the Limassol property market.

Angastiniotis also said that a group of private investors will also be visiting Cyprus, to discuss investing in semi government organisations (SGO) such as the telecommunications authority CyTA, the Ports Authority or the Electricity Authority.

The head of CIPA also told CyBC radio that a delegation from Kuwait will also come to the island to determine whether there are investment opportunities.

“These are all promising developments but we should keep a low profile so as to not repeat past mistakes”, advised Angastiniotis.

Also speaking to CyBC radio, the chief of the Cyprus Chamber of Commerce and Industry KEVE, Fidias Pilidis expressed his satisfaction that Qatar Airways began regular flights from Qatar capital Doha to Larnaca.

Pilidis argued that this was a positive for the economy because it would provide Qatari investors with the chance to visit the island regularly. The KEVE chief added that the new flights would bring more tourists to Cyprus as Qatari citizens now had the option of vacationing in Cyprus.

Pilidis asked of the Cyprus Airways to examine the possibility of regular flights to Doha.

Earlier this week President Nicos Anastasiades ended a three-day official visit to Qatar to try and drum up investment interest. Several bi-lateral deals with signed between the two countries.

Qatar Investment Authority targets Limassol

1...418419420...696Page 419 of 696