05/06/2019 Progress report of SEDIPES/ KEDIPES up to 31/3/2019 KEDIPES, 100% subsidiary of SEDIPES (ex-Cyprus Cooperative Bank) reports on the progress until 31/3/2019 regarding the management of the assets of the ex-Cyprus Cooperative Bank. On 3/9/2018 the business transfer agreement between the ex-Cyprus Cooperative Bank and Hellenic Bank Public Company Ltd was completed. The residual entity (KEDIPES) focuses exclusively on the management of the assets and will not carry out any other economic activity. Cash Inflows
Transcript
05/06/2019
Progress report ofSEDIPES/ KEDIPES up to 31/3/2019
KEDIPES, 100% subsidiary of SEDIPES (ex-Cyprus Cooperative Bank) reports on the progress until 31/3/2019 regarding the management of the assets of the ex-Cyprus Cooperative Bank.
On 3/9/2018 the business transfer agreement between the ex-Cyprus Cooperative Bank and Hellenic Bank Public Company Ltd was completed.
The residual entity (KEDIPES) focuses exclusively on the management of the assets and will not carry out any other economic activity.
Cash Inflows
Total cash generated from the management of the assets until 31/3/2019 reached €180,3mln, with cash generated in the last quarter reaching €79mln1.
€mln.Total
1/9/2018 - 31/3/2019
Quarter 1/1/2019 - 31/3/2019
Cash inflows from loans 102,6 49,3Inflows from non-performing loans 65,3 37,2
Inflows from performing loans 37,3 12,1
Cash inflows from property management and other services 77,6 29,7
Inflow from property sales 62,3 24,9Inflows from rentals 2,4 1,1Services and other inflows 12,9 3,7Total cash inflows 180,3 79,0
Cash inflows from loans by type of customer are:
€mln.Total
1/9/2018 - 31/3/2019
Quarter 1/1/2019 - 31/3/2019
Private individuals 66,0 64% 34,1 69%Companies 14,3 14% 9,5 19%Municipalities and Government Organisations 22,3 22% 5,7 12%
Total 102,6 100% 49,3 100%
Cash inflows from non-performing loans during the lase quarter were significantly higher compared to the first four months of operations, due to the restarting of restructuring activity following the licensing of SEDIPES, who is still the legal owner of the loans, as a credit acquiring company. By contrast, the contribution of performing loans, mainly of Municipality and Government Organisations, has reduced, as the annual instalment of these loans fell within the previous reporting period.
1 Cash inflows and outflows are based on non audited management information and an approximate allocation of cash movements. Assets as at 31/3/2019 are subject to revaluations.
During the last quarter, the solutions agreed through Altamira Asset Management Cyprus Ltd (Altamira) reached €138mln, of which:
- €34mln through restructuring, - €46mln through debt to asset swap,- €31mln through settlement,- €18mln reperforming accounts.
The restructuring and recovery solutions which will be implemented in the next quarters will increase since the restructuring activity was on hold prior to the licensing of SEDIPES.
Property sales through Altamira until 31/3/2019 reached €49,6mln, with sales of the last quarter reaching €30,1mln:
Total 1/9/2018 - 31/3/2019
Quarter 1/1/2019 - 31/3/2019
No. €mln % No. €mln %
Land 153 24,8 50% 85 15,5 51%
Commercial properties 55 13,2 27% 32 10,1 34%
Residential properties 119 11,6 23% 54 4,5 15%
Total 327 49,6 100% 171 30,1 100%
It should be noted that sale of properties for which the State has expressed interest to acquire for use by state departments or local authorities is on hold.
Cash collected from property sales is higher than sales during the period due to settlement of property sale receivables regarding property transactions carried out before 1/9/2018.
Cash Outflows
Total cash outflows until 31/3/2019 reached €128,6mln, with outflows during the last quarter reaching €38,6mln:
Other expenses 29,4 14,3Settlement of liabilities 66,3 10,3Voluntary Redundancy Scheme 43,9 0,4Agreement with Hellenic Bank 12,0 5,5Other liabilities of ex-CCB 10,4 4,4Total cash outflows 128,6 38,6
The expenditure paid relate to:
- the cost of the Servicer (Altamira) through which the management of loans in arrears over 90 days past due as well as the sale/ rental of properties is carried out.
- the cost of staff employed by KEDIPES. The headcount of KEDIPES on 31/3/2019 was 330 staff while a further 206 staff of Altamira is staff of the ex-Cyprus Cooperative Bank. In addition, on 31/3/2019 62 staff under the voluntary redundancy scheme are employed on a temporary basis to ensure the smooth transition of operations and support to Hellenic Bank which will provided on the basis of a transitional servicing agreement until November 2019. The number of temporary staff is reviewed each month.
- Other regular operating expenses (such as building expenses, IT expenses, branch operation expenses), asset level expenses relating to the management and recovery of assets (such as legal expenses, valuation expenses, settlements of taxes at the time of recovering of assets) as well as any capital expenditure.
The liabilities undertaken by KEDIPES relate to the compensation of the voluntary redundancy scheme of €133mln, the obligations arising from the business transfer agreement with Hellenic Bank including the Asset Protections Scheme, which was initially estimated at €155mln, and all other liabilities of the ex-Cyprus Cooperative Bank.
The first instalment of the voluntary redundancy scheme was paιd in September 2018, the second instalment at the beginning of June 2019 and the third instalment is payable in December 2019. In addition, the Asset Protection Scheme with Hellenic Bank will become effective in the third quarter of 2019.
During the last quarter liabilities settled reached €10,3mln. They relate mainly to the settlement of the closing balance of €48,5mln due to Hellenic Bank on the basis of the net asset value transferred and which was settled mainly in cash (€5,5mln) and through the transfer of 12 properties (€42,9mln), as well as tax liabilities and supervisory fees.
Cash position and assets under management
Based on the cash inflows and outflows above, the cash position on 31/3/2019 was €132,4mln:
€mln.Total
1/9/2018 - 31/3/2019
Quarter 1/1/2019 - 31/3/2019
Cash balance beginning of period 80,8 91,9
Surplus of cash inflows over operating expenses 117,9 50,7
Cash inflows from the management of assets 180,3 79,0
Expenditure -62,4 -28,3
Settlement of liabilities -66,3 -10,3
Cash Balances 31/3/2019 132,4 132,4
The surplus funds from the management of the assets will be gradually repaying the state aid from the end of 2019. In addition, part of the state aid will be repaid in the form of property and other assets transfer.
The assets under management as at 31/3/2019 are:
Loans with nominal value of €7.394mln.
€mln. Balance 31/3/2019Private individuals 5.995 81%Companies 1.135 15%Municipalities and Government Organisations 264 4%
Immovable property €590mln and property in the occupied areas Cash and balances with banks €132mln. Participations in commercial cooperative companies and other
asset €90mln
KEDIPES will be providing quarterly progress updates regarding the management of the assets of ex-Cyprus Cooperative Bank.
