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Real estate bank a possibility

One of the options being considered for the future of the Bank of Cyprus is the establishment of an asset management company to take over problematic real estate loans and undertake their sale or rent to repay loans.

THE authorities and the Bank of Cyprus are examining the possibility of establishing a real estate bank to improve its balance sheet and reduce the emergency liquidity in its books.

The various options for the Bank of Cyprus are being examined by the Central Bank and the Ministry of Finance in cooperation with consultants McKinsey and Alvarez & Marsal.

Another possibility is to set up an asset management company of the bank, which was included in the original conditions contained in the Memorandum of Understanding.

The difference between a real estate bank and an asset management company has to do mainly with the handling of the Emergency Liquidity Assistance (ELA).

The study is not expected to be completed before September, when the restructuring plan of the Group will be ready.

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