Filenews 22 November 2022
At €93.1 million. KEDIPES' cash inflows reached the third quarter of 2022, posting a decrease of 19,2% compared to €115,2m. for the second quarter of 2022, and an increase of 3,5% compared to €90m. of the third quarter of 2021.
According to an announcement by KEDIPES, the results are in line with the provisions of the business plan and it is expected that the next repayment of State Aid will take place within the fourth quarter - in the range of €60-80 million.
Statement by the Chairman of the Board of Directors of KEDIPES, Lambros Papadopoulos:
"In the third quarter of 2022, cash inflows reached €93.1m. showing a decrease of 19.2% compared to €115.2m. for the second quarter of 2022, and an increase of 3,5% compared to €90,0m. of the third quarter of 2021. The results are in line with the provisions of the business plan and it is expected that the next repayment of State Aid will be made within the fourth quarter - in the range of €60-80 million.
In October, two important chapters for KEDIPES were completed.
Specifically, the Agreement has been signed, on the basis of the provisions of which the revised Portfolio Service Agreement (the "SLA") between SEDIPES, KEDIPES and Altamira Asset Management (Cyprus) Ltd. Terms of the revised SLA are valid from 01/01/2020 and have been confirmed by an independent expert to be consistent with market conditions and with confirmation by the Directorate General for Competition of the European Commission for the completion of the relevant Commitment.
As we have mentioned before, the revised SLA has changed the way in which Altamira's remuneration is paid, which will be approximately 73% variable and on the basis of its performance in terms of managing KEDIPES' portfolio, as opposed to 50% in the previous agreement. Based on the provisions of KEDIPES' existing business plan, the total remuneration of the Managing Company is expected to be reduced by 24%. At the same time, significant reductions in potential termination claims of up to 70% have been achieved, while the fee for the withdrawal of assets from the perimeter of the Managing Company is reduced by about half.
The second important chapter that has been completed concerns the signing of the Asset Transfer Agreement between SEDIPES and KEDIPES. The transfer of the loans has been completed while the transfer of the remaining assets is expected to be completed within the fourth quarter of 2022. The transfer is particularly important for KEDIPES, as it will help in its smoother operation in terms of decision-making regarding the management of its assets.
As a particularly negative development, we note the decision of the Plenary Session of the Parliament to proceed with a new extension of the suspension of foreclosures, despite the relevant commitments of both KEDIPES and the Association of Credit Acquiring Companies & Credit Facility Management Companies, that we will not proceed with foreclosures of primary residences worth up to €350,000.
As we have already warned, the continuous suspensions of foreclosures perpetuate the problem, protecting strategic defaulters and affect loans of the perimeter of KEDIPES, totalling about €2.9 billion, i.e. half of the portfolio of non-performing loans. Due to frequent interventions, cash inflows will be reduced and the ability to fully repay state aid will be negatively affected.
Regarding the Rent Against Instalment Scheme, KEDIPES is actively involved in its design. The internal processes and the relevant preparation by the competent services for the implementation of the Plan have already begun. We will expect an update from the Ministry of Finance on the start time of the Plan."
Financial Developments for the Third Quarter of 2022
- Cash inflows for the third quarter of 2022 amounted to €93,1m. showing a decrease of 19.2% compared to €115.2m. for the second quarter of 2022, and an increase of 3,5% compared to €90,0m. of the third quarter of 2021. The decrease compared to the second quarter of 2022 is due to seasonal factors and the contribution of €12,3m. from the alienation of participations in commercial Co-operative Societies in the second quarter of 2022. Receipts for the third quarter from the management of loans and real estate amounted to a total of €91.7m. or 1.3% of the nominal value of the loan and real estate portfolio of €6,890m. at the end of the second quarter of 2022.
The cumulative cash inflows from the start of operations of KEDIPES on 1/9/2018 until 30/09/2022 amounted to €1,548.8m. Receipts from the management of loans and real estate amounted to €1,476.9m. or 18.3% of the nominal value of the loan and real estate portfolio of €8,051m. on 1/9/2018.
- Operating and asset management expenses for the third quarter of 2022 stood at €25.2m, down 6.9% from €27.1m. in the second quarter of 2022 and by 2,0% from €25,7m. in the third quarter of 2021.
- Loans at face value amounted to €6,236m. at the end of the third quarter of 2022 from €6.296m. at the end of the second quarter of 2022 and €6,506m. at the end of the third quarter of 2021. The total deleveraging since the start of KEDIPES' operations from September 1, 2018 to September 30, 2022 amounted to15.4% and excluding contractual interest on loans amounted to 36.3%.
- Total restructuring and/or recovery solutions through the managing company Altamira amounted to €167m. for the third quarter of 2022 for €173m. for the second quarter of 2022. The total solutions from the start of operations of KEDIPES until the third quarter of 2022 amounted to €3,089m. or 41.9% of the initial loan balance of €7,371m.
- Assets at the end of the third quarter of 2022 stood at €6,965m. in nominal value and include cash of €121m, real estate with a total value of €582m. and performing loans of €631m. Total deleveraging from the start of operations from September 1, 2018 to September 30, 2022 amounted to15.6% and excluding contractual interest on loans to 34.3%.
- Under the ESTIA Scheme, until September 30,2022, the applications that were evaluated and have received final approval from the Ministry of Labor concern 656 accounts with a contractual balance of €144m. The process of evaluation of appeals by the Ministry of Labor is ongoing.
- In relation to the Asset Protection Scheme, claims totalling €105.9m have been submitted by Hellenic Bank (ET) to date. for the period 1September2018 until 30June2022, with the last three Receivables for the fourth quarter of 2021 and the first and second quarters of 2022 relating to a reduction in receivables of €5.1m, €0.6m. and €0.6m. respectively, mainly due to a revision of the impairment parameters by ET but also adjustments in relation to previous periods. KEDIPES has made total payments of €78.2m. or 74% of the Claims submitted to date. SEDIPES/KEDIPES and Hellenic Bank are in the process of consulting to confirm the remaining amount of the Receivables. Hellenic Bank's payments to the Republic of Cyprus as guarantor of the Scheme cumulatively amounted to €43.1m.
The contract value of the assets covered by the Scheme on 30/06/2022 amounts to €1,650m. compared to €2,608m. at the beginning of the Plan showing an overall reduction of 37% since the start of the Plan. The reference price of the assets as at 30/06/2022 amounts to €1.314m. compared to €2.271m. at the beginning of the Plan (reference price is the amount covered by the Plan) showing a total reduction of 42% since the start of the Plan.
- Net cash flow, after the payment of expenses and liabilities for the third quarter of 2022, stood at €67.6m, posting a decrease of 14.4% compared to €79.0m. for the second quarter of 2022, and an increase of 22,7% compared to €55,1m. for the third quarter of 2021. Cumulatively, since the start of operations of KEDIPES, net cash flow after the repayment of expenses amounted to €840.4m.
- In the third quarter, an amount of €60m was paid. against State Aid, increasing the total amount of repayment of state aid in cash to €230m. in 2022 and at €800m. since the start of KEDIPES' work in September 2018. The future repayment of state aid is directly linked to the possible expansion of KEDIPES' operations for the acquisition of real estate under the Mortgage to Rent scheme in accordance with the relevant announcements of the Ministry of Finance. KEDIPES is ready to contribute to this direction and until the relevant decisions and approvals are taken, we remain committed to our mission, based on the Commitments made to the Directorate General for Competition of the European Commission.
A detailed presentation of the management results until 30/09/2022 has been posted on the website of KEDIPES at the link:
