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Cyprus

House committee to discuss NPL bills ‘till midnight’ if needed

House finance committee chair Averoff Neophytou at the House last week

The House finance committee will hold daily meetings this week, even until midnight, to complete discussion of bills aiming at helping reduce non-performing loans (NPLs) by Friday, its head Averof Neophytou said on Monday.

The bills are to be tabled at the next House plenary session, on Friday, for a vote.

Neophytou said the committee will meet “tomorrow, the day after tomorrow and on Thursday from morning until midnight if necessary.”

Parliament’s approval of the new bills, which aim at addressing gaps in existing legislation, are a condition for the European Commission’s sanctioning the deal signed by Hellenic Bank and the Cyprus Cooperative Bank last week, transferring the latter’s operations and deposits to Hellenic.

The need for the deal was the result of stricter supervisory rules that made a further increase in the provisions for loan impairments by the state-owned lender necessary. The Co-op bank, which received a capital injection from the government of almost €1.7bn in 2014 and 2015, was unable to tap fresh equity from the market while facing a non-performing loans ratio of roughly 60 per cent.

The changes in the bills approved by the Cabinet, aim at helping reduce non-performing loans, providing banks with effective tools and shielding them from the need of further increasing provisions and the subsequent need to raise more capital.


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