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REMU debt to asset swaps increasing

Increasing numbers of properties in Cyprus including homes, hotels and golf courses are being transferred to the Bank of Cyprus Real Estate Management Unit (REMU) by debt to asset swaps.

REMU debt to asset swaps increasingMORE and more properties, from houses to hotels and golf courses are being transferred to the Bank of Cyprus Real Estate Management Unit (REMU), according to in-cyprus.com.

At the end of the first quarter of 2018, the number of properties on the bank’s books rose by 689. However, over the same period the bank only managed to achieve 123 sales; a mere 5% of all property held by the REMU. Furthermore, the REMU has reached agreements to swap another 177 properties for debt.

At the end of the first quarter of 2018, the REMU had 2460 properties worth €1.52 billion on its books, which include:

487 houses (€159 million);

195 shops and offices (€229 million);

57 hotels (€94 million);

1261 plots of land (€566 million);

3 golf courses (€265 million);

596 properties in Greece and Romania (€122 million).

During the period from 31 March to May 4, 2018, the Bank of Cyprus Group completed sales of €27 million. From the beginning of the year until May 4, the group sold 123 properties for € 97 million. Additionally, it signed sales agreements for real estate with a contract price of €17 million.

(Established in 2016 the REMU aims to acquire real estate in a voluntary asset-to-debt swap of non performing delinquent borrowers which would otherwise follow the foreclosure process.)

Readers' comments

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  • Ian says:

    @H and @ Ed….
    If “Mum” wants to buy the apartment back, she might wish to pay ( say ) 60% of the value, having already received 100% of the value at the time of the original sale.

    Success would mean that she had the same apartment as before having all of the proceeds of sale, and possibly only a fraction of the debt.

    Ed: Once the bank repossesses the property there may be an opportunity for mum to buy it then for 80% of its market value.

  • Richard says:

    It’s good that the banks are FINALLY coming to the negotiating table, however I’m sure Troika has leaned on them hard via the central bank. I doubt very much indeed that they’d ever have moved their thinking at all left to their own devices.

    However – a negotiation is only a quality & useful negotiation IF it benefits BOTH parties. As Mike (below) suggested – they (and a lot of us) are only in this mess as a consequence of biblically irresponsible lending (aided by iffy lawyers, dodgy developers and greedy brokers).

    What matters now is a sensible negotiation process – which I’m 99.9% sure will mean sustained pressure from the legal representatives fighting the mis-sold loans.

    In my experience – banks rarely starve. The only banks who have collapsed were those who were over-leveraged stupidly ten years ago in the global fiscal slump (like Lehman Bros). The rest have made absolutely sure in the event of any event – they protected their interests way ahead of the borrowers. The hugely de-regulated climate of the last quarter century has meant the tables have been massively tipped in their favour. Massively….

  • embapaphos says:

    @H, I reckon the bank doesn’t want to sell to your mother because either they have earmarked the property at it’s knocked down price for an associate they know or even a bank employee, or they will sit on it and wait to re-coup back as much as possible.

    Tricky to know how they tread the fine line, flooding the market with too many properties too soon at knocked down prices will correct the market but cause chaos. Leaving as is makes the bank one big estate agent….

  • aggis demetriou says:

    The best one are the 195 shops at 229 Million Euro, that makes each shop close to 1.2 million lol

  • H says:

    My mother sold an apartment in her apartment block and the new owner defaulted on his mortgage. My mother has since been to the bank to try and purchase the mortgage with the defaulters permission but the bank is not interested in selling it back to her. The bank expects the total which the defaulter owes on his mortgage! I bought a repossession property in the UK at a fraction of the value, about 50% in fact. How can my mother make a reasonable offer to buy back the apartment if the bank is not being reasonable about its’ price?! It’s as though they do not want any of their money back! Would anyone here have any idea what tack to use with the Cypriot banks?

    Ed: As your mother sold the property she will have received payment from the bank. I don’t understand why she wants to buy it from the defaulter – it’s not her problem?

  • Deanna says:

    If my maths is correct then that’s nearly €20m in six months that the Bank has recovered from sold assets.

    If this steady trickle can be kept up then, who knows, one day soon we my be solvent.

    BUT – have lessons been learned???

  • Mick TREVISS says:

    3 Golf courses…..really!! There cannot be more than 4 or 5 on the island!

    As was said, irresponsible lending and the Coop continue to employ people that owe them thousands, refuse to pay and the bank doesn’t chase them…..what kind of Mickey Mouse state is this. No don’t tell me I lived there for long enough to know exactly what kind of state it is! Only one word….nepotism.

  • Mike Johnson says:

    Irresponsible lending?

  • Ula says:

    This is the way to turn fictitious (printed) money into real assets.

  • dagwood says:

    I don’t really approve of banks being turned into estate agents. And I also don’t understand how 487 houses can collectively be valued at €159 million; this is an average of nearly €326500 per house. I suppose the bank can then throw in a free Cyprus passport with a house sale! Any sale can be helped along with a sweetener but really.

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