Kedipes likely to operate as ‘bad bank’ for NPLs next year

The European Commission is expected to grant state-owned asset management company Kedipes the necessary approval to operate as a bad bank during the second half of next year, the Cyprus News Agency reported on Thursday.

Citing an unnamed finance ministry source, the agency said KPMG was currently preparing the complex legal documents needed for turning Kedipes into a national asset management company, as well as the financial data that will be submitted to the commission for approval.

Kedipes began operation in September 2018 to manage the non-performing assets of the former state-owned Cooperative Bank, whose deposits and performing loans were sold to Hellenic Bank.

The finance ministry source said the financial data concerned the value of loan portfolio the company will hold, ensuring there is no question of indirect assistance to the banks, which will sell NPLs to Kedipes.

The source said the NPLs will be paid for with revenues from loan and property management and not new state aid would be necessary.

In September this year, Kedipes paid the state €50m against the assistance it had received from the state.

Further payments will depend on the potential evolution into a national asset management company, Kedipes said recently.