Cyprus’ state-owned asset management company Kedipes posted mixed results in the first half of 2025, with stronger restructuring activity offset by weaker inflows, while continuing to repay state aid and expand social support schemes.

Chairman Lambros Papadopoulos said total debt restructuring and recoveries rose 13 per cent year-on-year to €321 million, but cash inflows dropped 23 per cent to €162 million.

He noted that inflows picked up in the second quarter and are expected to accelerate further in the second half.

With Thursday’s additional cash repayment of €50m for the third quarter, alongside indirect repayments mainly through the mortgage-to-rent and Estia schemes, cumulative state aid repayment has reached €1.66 billion.

Kedipes has also disbursed €30m under the Rent for Instalment scheme, which has so far included 254 residences.

Since it began operations in 2018, total repayments of state aid have reached €1.66bn. Of this, €1.62bn has been paid in cash, €30m allocated to the housing scheme, and €10m in other repayments, including instalments of the Estia plan.

The company said it maintains a cash reserve of €90m to finance the forthcoming mortgage-to-rent scheme.

Total assets excluding interest stood at €4.3bn at end-June, including €199m in cash and liquid assets, €372m in real estate and €669m in performing loans.

Kedipes’ business plan still targets the full €3.5bn repayment.

The company reported that results from the non-performing loan settlement scheme protecting primary residences, launched in April 2024, remain very positive and the programme’s duration has been extended.

In July it also unveiled an early repayment plan for restructured performing loans, which has attracted strong interest from borrowers seeking refinancing through commercial banks.

Meanwhile, following a preliminary agreement with Hellenic Bank in April 2025 to end the Asset Protection Scheme (APS) and repurchase a portfolio of non-performing loans, procedures are ongoing.

The European Commission’s competition authority approved the plan on September 19.

The first stage, ending compensation-related obligations tied to the 2018 transfer of assets from the former Cyprus Cooperative Bank to Hellenic Bank, is expected to be finalised shortly, with the full transaction closing early next year.

As for the mortgage-to-rent scheme, 680 applications have been approved and 254 homes acquired so far.

In addition, the company reported that 400 homes and up to 900 approvals are expected by the end of the year.

Around 900 applications remain under technical assessment, it added, slowed by documentation delays from both borrowers and district authorities.

Nevertheless, the programme remains on track for 1,600 approvals, double the original target of 800. Spending so far has reached €30m.

Turning to finances, regular cash inflows in the first half amounted to €161.5m, down 22.9 per cent from €209.4m a year earlier.

Excluding €17.7m linked to a high-value building in 2024, the decline was 15.7 per cent.

Cumulative inflows since September 2018 totalled €2.73bn, with €2.64bn collected from loans and properties, representing 32.7 per cent of the original €8.05bn portfolio.

Operating and asset management expenses fell 13.7 per cent year-on-year to €48.6m.

Solutions via servicer doValue reached €321m in the first half, up from €284m a year earlier.

Since inception, total solutions stand at €4.91bn, equal to 66.6 per cent of the initial €7.37bn loan balance.

Loan balances at nominal value were €5.22bn at end-June, down from €5.44bn at end-2024 and €5.75bn a year earlier.

Asset deleveraging since September 2018 amounts to 29.4 per cent, or 48.2 per cent excluding contractual loan interest.

On the APS with Hellenic Bank, the contractual value of covered assets fell to €1.12bn at end-March from €2.61bn at inception, a 57 per cent reduction.

The reference value, which determines coverage, declined 63 per cent to €840m from €2.27bn.

Since 2018, Hellenic Bank has submitted €103.3m in claims, of which €102.7m has been settled up to September 2024.

Claims after that date will be cancelled once the final termination agreement is signed. Hellenic Bank has also paid €45.1m to the Republic of Cyprus as guarantor.

Net cash flow after expenses in the first half reached €108.2m, down 42.6 per cent from €188.5m in 2024. Cumulative net cash since inception totals €1.69bn.

The new early repayment scheme for performing loans has surpassed expectations, with participation exceeding initial forecasts.

The plan, which runs until year-end, offers borrowers substantial discounts on outstanding balances and is intended to accelerate the reduction of Kedipes’ overall loan portfolio.