Filenews 16 April 2025
KEDIPES presented the Management Progress for the fourth quarter of 2024 along with the preliminary results of the first quarter of 2025, as well as the most important developments in KEDIPES' operations, after yesterday the major agreement with Hellenic Bank was announced.
In particular, according to the data, KEDIPES from its first day of operation in 2018 until today has had cash inflows of up to €2.6 billion, while more than €1.5 billion have been returned to the state as part of the repayment for state aid.
At the same time, in relation to the Rent Against Instalment Scheme, 282 letters of approval have been sent, while 55 houses have already been acquired. As for the Interest Subsidy Plan announced by KEDIPES at the beginning of 2023 and continued for the year 2024, it supported 3,200 accounts to meet the repayment of their facilities and the total subsidy for 2024 amounted to €12.8 million.
In detail, the data:
- Cash inflows €114.3m for the fourth quarter of 2024, showing a significant increase of 26.4% compared to the third quarter of 2024 and inflows of €460.4m. for 2024. Lending solutions for the fourth quarter amounted to €232m. with restructuring (€57m) and other consensual solutions, in 87% of the total solutions. 2025 started at a slower pace, with cash inflows of €72.2m. for the first quarter, where performance is traditionally lower. The cumulative cash inflows from the start of operations of KEDIPES on 1/9/2018 until 31/3/2025 amount to €2,636m. with the total deleveraging, excluding contractual loan interest, being more than 46%.
- Repayment of state aid in cash for 2024 of €310 million, while at the same time a reserve of €100 million is maintained. in cash, for the purpose of financing the "Rent for Instalment" Plan, of which KEDIPES is the implementing body. New repayment of €40 million in state aid for the first quarter of 2025, reduced due to the Agreement with Hellenic Bank, increasing the total amount of state aid repayment in cash to €1,510m. since the start of KEDIPES operations in September 2018.
- KEDIPES Agreement with Hellenic Bank for the termination of the Loan Guarantee Scheme and the repurchase of a relevant portfolio of non-performing loans, as well as the termination of liabilities in relation to the 2018 Asset Transfer Agreement.
KEDIPES and Hellenic Bank have reached a preliminary agreement for the termination of the Loan Guarantee Scheme (the "Scheme") and the repurchase of a relevant portfolio of non-performing loans, as well as the termination of the liabilities and compensation guarantees in relation to the Asset Transfer Agreement (collectively, the "Transaction"), which sold the banking operations of the former Cooperative Bank of Cyprus to Hellenic Bank in 2018.
The contractual value of the assets covered by the Plan as of 30/09/2024 amounts to €1,206m. and the reference price amounts to €920m. (amount covered by the Plan).
The Preliminary Agreement provides for the signing of the necessary final agreements in June 2025 in order to implement the following:
- Termination of the Scheme with a reference date of 30 September 2024.
- Finalization of the payments made under the Plan by 30 September 2024, i.e.:
- Payments of €102.7m from KEDIPES to Hellenic Bank in relation to claims submitted under the Scheme.
- Payments €45.1m by Hellenic Bank to the Republic of Cyprus as guarantor of the Plan.
- Repurchase by KEDIPES of non-performing loans included in the Scheme with a contractual value of €361 million. to €180.2m The loans mainly concern a retail banking portfolio with high coverage from first mortgages of €553m.
- Payment of €17.5m from KEDIPES to Hellenic Bank in relation to the termination of the Scheme, which also covers the non-performing loans.
- Payment of €10 million from KEDIPES to Hellenic Bank for the termination of indemnity obligations and guarantees in connection with the Asset Transfer Agreement.
The signing of the final agreements is subject to the approval of the Ministry of Finance and the European Commission in relation to the List of Commitments.
The completion of the Transaction, which will also be subject to the approval of the Supervisory Authorities, is expected to take place towards the end of 2025. Upon its completion, all guarantees provided by the Republic of Cyprus to Hellenic Bank in 2018 will end.
- "Rent for Instalment" Scheme – Out of the total of 2,568 applications that have not been rejected, 282 letters of approval have been sent so far, while 55 houses have already been acquired. Following the recent adoption of the amendment to the Road and Building Regulations Law of 2025 that exempts KEDIPES from civil and criminal liabilities for not having a final approval certificate for properties acquired under the SEED, it is expected that the pace of application processing will be accelerated. Indicatively, it is reported that out of the 282 letters of approval, 102 were sent after the amendment of the Law. It is expected that by the end of 2025 all applications will have been examined to receive the final response.
- The Interest Subsidy Scheme announced by KEDIPES at the beginning of 2023 and continued for the year 2024, supported 3,200 accounts for the maintenance of the repayment of their facilities and the total subsidy for 2024 amounted to €12.8m. The Board of Directors of KEDIPES has decided that the Interest Subsidy Scheme will continue for the first half of 2025, in the same form as the previous Plan 2023-2024, i.e. the total interest rate charged by borrowers who adhere to the repayment program of their facilities, will be 3.50% for housing loans and 4% for credit facilities for other purposes.
Lambros Papadopoulos: Cash inflows are satisfactory and the agreement with Hellenic Bank is important
The President of the Board of Directors of KEDIPES, Lambros Papadopoulos, described the net cash inflows for the fourth quarter of 2024 as satisfactory, pointing out that they were within the framework of the company's Business Plan. At the same time, he said that work is expected to recover in the rest of 2025, after low returns in the first quarter of the year.
Mr. Papadopoulos stressed in particular the importance of the Preliminary Agreement for the termination of the Loan Guarantee Scheme, which, as he said, constitutes a decisive milestone for KEDIPES. The transaction is expected to reduce credit and liquidity risk, limiting the cost of the Plan within the 2018 baseline estimate scenario, which amounted to €155 million.
According to the statement, the payments of €27.5 million foreseen in the context of the Transaction are fully aligned with the recently updated KEDIPES Business Plan. As Mr. Papadopoulos noted, the long-term impact on results and cash flow is estimated to be positive, although in the short term the rate of repayment of state aid will slow down.
The repurchase of the loans by Hellenic Bank is considered important, as it enables KEDIPES to manage the loans and recover part of the €102.7 million paid under the Loan Guarantee Scheme.
Finally, the Transaction provides for the termination of all guarantees provided by KEDIPES / SEDIPES and the Republic of Cyprus to Hellenic Bank in 2018.
