Cypriot lender Hellenic Bank has sold its non-performing loan and real estate management business to a loan servicing platform for €20 million.
APS Debt Servicing Cyprus, which is 51 percent owned by Prague-based debt specialist APS Holding and 49 percent by Hellenic Bank, will manage the bank’s NPLs and real estate assets, valued at €2.3 billion and €150 million respectively.
The newly-created debt servicing platform – which started operations on 3 July – will allow the lender to “effectively tackle its non-performing loans in an accelerated way and with higher recoveries”, the bank stated.
The debt servicer is expected to facilitate the price discovery for problematic loans and help the development of a market for distressed assets in Cyprus, attracting international investor interest, the Cypriot lender added.
As part of the deal, APS Cyprus will provide a ten-year service, as the bank retains ownership of the NPL and real estate portfolio.
APS Cyprus will assume all operating expenses associated with the management of the bank’s NPL and real estate portfolio and Hellenic Bank will provide an administration fee.
The transaction is in line with the group’s strategy to offload risk from its balance sheet, following the ECB, IMF and EBRD guidelines on the NPLs management.
The deal will also put the bank in a “stronger position” to manage and grow its performing loan book by seizing opportunities both domestically and internationally, the bank said.
Hellenic Bank will transfer 129 employees to APS Cyprus while additional resources will be brought in as needed to further boost the capacity of the operation.