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Brexit and monetary policy

Thu, 2017-06-22 11:41
Leaving the EU makes things even harder for the Bank of England

ICPAC announces composition of new board (Update)

Thu, 2017-06-22 11:27

The members of the Institute of Certified Public Accountants of Cyprus (ICPAC), which supervises accounting firms, elected on Wednesday a new board chaired by Bank of Cyprus’s chief compliance officer Marios Skandalis, the group said.

Stavros Pantziaris and Maria Pastellopoulou were elected vice chairman and secretary, ICPAC said in an emailed statement on Thursday. The other board members include Andreas Andreou, outgoing president Demetris Vakis, Antonis Vasiliou, Christos Vasiliou, Carlos Zangoulos, Pieris Markou, Philippos Raptopoulos, Spyros Spyrou, Demetris Taxitaris, Nicos Chimarides and Odysseas Christodoulou.

The new chairman of ICPAC, which held its annual general meeting in Nicosia on Wednesday, said in an interview that the institute should “reaffirm on on-going basis its leading role in supporting, reforming and strengthening the economy of Cyprus, establishing it as the prime and most reliable financial services centre in the region”.

“In this way all of our members, both practicing and non-practicing, should feel proud of their Institute,” Skandalis said.

In his Wednesday speech, former chairman Vakis said that the group plans to strengthen its organisational structure by 2020 to render it more effective, strengthen its role and credibility, and support Cyprus’s economic recovery and its role as a credible business centre.

The post ICPAC announces composition of new board (Update) appeared first on Cyprus Mail.

Bankers’ Alert: Bloom or Wither? Revolutionise or Rationalise?

Thu, 2017-06-22 11:15

By Rennos Ioannides*

There is a well-known axiom in the financial world which stipulates that no banking system, and as a matter of fact, no economy, can survive with non-performing loan (NPL) figures over fifty percent, as is the case in Cyprus; yes, they are stubbornly well over 50 per cent when governmental and non-financial corporations are excluded!

And there is another well-known axiom which says that “as you sow, so shall you reap”. And local banks are reaping, for the past few years now, the rotten fruit of the loan seeds they sowed ‘en masse’ a decade ago.

As no juggler in the world can actually juggle with so many “air-borne balls” at the same time, no banker can actually handle so many problem loans, despite the valiant efforts that have taken place to date. Much like the Lernaean Hydra, no matter how many loans are resolved, even more spring up. And, heaven forbid, banks are not, cannot and should not become real estate clearing houses. This is not their role in the modern economy! Their role is none other than to diligently and rigorously assess new investment and financing propositions with a view to funding with caution the productive capacity of the economy, thus propelling real economic growth.

Juggling with so many balls, using only conventional ways, is simply “an accident waiting to happen”. A potential “nuclear” accident to be honest. The rationalised and conventional way of going about resolving the sizeable NPLs stock is not making sufficient inroads.

The process is slow and painful and banks possibly lack sufficient specialised resources. In addition, banks may also carry embedded legacy structures, cultures, policies and procedures which give rise to decision-making cautiousness or hesitancy and operational capacity bottlenecks or even inertia. All these constraints stifle efforts to swiftly and determinedly deal with the problem, which is exactly what is required in crisis situations.

Borrowers, on the other hand, may lack sufficient resolve to efficiently deal with the problem, whereas the local corporate world and households alike are excessively indebted and cannot sustainably service their debts at their present levels.

To complete the picture, the legal and enforcement frameworks for debt recovery and for the liquidation of collaterals is not yet mature or effective enough.

Banks’ ability to fund new investments and economic growth is, as a result, severely curtailed, prolonging the return of sustainable economic recovery. And our banks are in for yet more challenges:

  • IFRS 9 which comes in force in 2018 and will most likely lead to additional and/or faster provision requirements,
  • the new pan-European stress tests which are anticipated to take place in the second quarter of 2018,
  • the newly published guidance to banks by the European Central Bank on non-performing loans, the requirements of which will form an integral part of the annual Supervisory Review and Evaluation Process and may reasonably feed through to Pillar 2 capital requirements. Detailed reporting requirements have been set down where the NPL strategy, plans and performance of high NPL banks will be diligently scrutinised by supervisors at frequent intervals.

Threat of crisis reignition

The level of accumulated NPLs along with the other challenges facing banks are so critical to the extent that they make local banks extremely vulnerable to any sort of downturn or adverse development. The risk of reigniting a 2013-like crisis cannot be completely overlooked.

No wonder these are worrying times for local banks which find themselves operating in truly hostile surroundings:

As already touched upon, banks do not have sufficient or, in certain cases, enough expert resource capacity to deal with and subsequently manage the NPL avalanche arising from the sheer number of cases at hand.

To top it up, banks’ attempts to offer swift, long-term and truly sustainable solutions may be deterred because of inflexible internal processes and corporate governance issues.

As a result, trying to work out all the non-performing loans inside the bank only prolongs the healing process in the organisation. Recent insolvency law reforms have yet to mature and it will typically take time to build capacity, develop uniform processes and test the rules in court. Structural impediments, on the other hand, such as the slow progress in terms of the issuance of separate property title deeds is concerned and the heavy concentration in a saturated real estate sector, which presently lacks financing liquidity, are further factors which do not bode well for the future of the banking sector.
On another front, the local banking system is profoundly crowded both in terms of the number of commercial banks operating in this small economy and in terms of the number of bank branches per capita.

All financial institutions are in effect juggling with the same “balls” (or, chasing the same distressed, and healthy, borrowers) which leads to intense competition to get a bite of the small ‘healthy borrower’ pie against a backdrop of low net interest spreads and a largely inflexible cost base. The already stressful business pressures facing banks arefurther exacerbated by the heavy load of supervisory, compliance and reporting requirements and resultant costs.

This low profitability environment, which is driven by all the above factors, may well call into question the viability and sustainability of certain banks’ business models. Daniele Nouy, chair of the Single Supervisory Mechanism, has repeatedly stated that “low profitability is a concern for supervisors because it may impact the medium-term sustainability of some business models. Certain institutions might struggle to generate capital while having limited access to financial markets. The European Central Bank will carefully assess the sustainability of banks’ business models in the coming quarters, with a view to ensuring that they are able to withstand cyclical developments and structural challenges”.

Local businesses and households are typically multi-banked and excessively indebted, therefore many of the distressed borrowers are common to more than one banks, either as principal debtors or as guarantors. Arguably, there is not much benefit in resolving some of these distressed borrowers’ loans with one or two banks whilst leaving borrowings with other banks unresolved.

Likewise, resolving these loans without actually adjusting the debt level to the amount which can be reasonably sustained by the borrower in the long-term is not of great help either.

The unresolved borrowings will one way or the other come back to haunt the resolved loans; it will only be a matter of time before the cleaned up loans get contaminated by the diseased loans. Similarly, it will not be long before the unsustainable restructured debts re-default.

In conclusion then,

  • a joint bank effort for the restructuring of multiple creditor loans and
  • assertive action for the re-adjustment of the level of debt,

are called for on a number of occasions; neither action is, however, typical of the existing banking culture in Cyprus.The distressed asset market for the sale of NPLs is anything but developed in Europe yet, exhibiting a steep bid-ask pricing gap between buyers – sellers that is making the sale of distressed debt unaffordable for banks and is thus blocking the NPLs secondary market across Europe.

Alarmingly, when we turn to the local market we find that the provisioning coverage of local NPL loans is still below the European Union average (39.7 per cent coverage for Cyprus vs 44.6 per cent weighted average for all EU countries, as of December 2016 as per the European Banking Authority), thereby limiting even further the potential for distressed debt sales which shall maintain banks in a capital-neutral position. Even more worryingly though, the higher NPL countries in the EU (with ratios over 10 per cent) are mostly much better covered, with coverage ratios closer to 50 per cent or even higher.

What’s more, the local market is so small and hampered by so many structural constraints that one would not reasonably expect a flood of interest from international investors to buy a chunk of Cyprus’ problem loans. Interestingly, the first move to dispose of a portion of their NPL portfolio, which has been very recently publicised, relates to the sale of a very small fraction of a local bank’s portfolio to another local bank.

To sum up this first part of our analysis, it is only fair to say that traditional banking rationalism in the form of the conventional management of NPLs may not be the wisest choice in times of turbulence and business pressures on a number of fronts.

Doing business in crisis conditions requires, by its very nature, thinking outside the box in conjunction with pace and determination.

(*) Renos Ioannides is a financial analyst (

The post Bankers’ Alert: Bloom or Wither? Revolutionise or Rationalise? appeared first on Cyprus Mail.

On the steps to becoming masters of drama

Thu, 2017-06-22 11:02

Lots of proud parents have recently attended their kids’ end of the school year performance and for some this may have left them wondering if the stage will be the place where their kids will find a professional home. For those parents who see a real star in their children’s future or for those young adults who would like to learn the trade of acting from professionals, there is a summer drama camp coming up focussing on learning to perform from some of the best.

The summer camp, which will take place in Kritou Terra in Paphos from July 3-9, is an intensive drama and performance camp organised by Masterclass Workshops UK.

This is a great opportunity for aspiring performers to get trained by industry professionals from the UK – Kathleen Ruddy and Julia Coombe – in a place with rich, historical surroundings and breathtaking views.

Actress, playwright and director Ruddy is well-known to Cypriot theatregoers for her sell-out plays such as Sex, Chips and Ouzo, The Devil Wears Primark, Spare Ribs, Check Your Coupon and Death of a Playboy. She is the winner of an Edinburgh Fringe Festival Award who has also starred on the big screen in the award-winning A Spanking in Paradise and has also written for UK comedy panel shows and dramas for the BBC and ITV.

In Cyprus she teaches National Certificate in Musical Theatre Pre-Vocational students in Nicosia who have all been accepted into UK universities so far.

Actress Coombe has worked with many renowned actors and celebrities such as Michael Pennington, Lindsay Duncan, Margi Clarke, Toyah Willcox, Carol Smillie and Graham Norton. She is best known for her work in comedy in shows like The Vagina Monologues and for her hit stage show Hormonal Housewives.

Teaching has taken Julie as far as Milan and the International School of Vienna. She has given several workshops at PASS (Performing Arts Studio Scotland) such as acting in TV, audition technique and the performing arts as a business.

According to Masterclass Workshops UK, this is “the ideal spot to help actors and performers get away from it all, feel inspired by the location and get to business for the first week of July, learning to act for camera, write a drama, devise a comedy, learn stand-up, voice production, accent training, how to produce a radio play or voice-over a radio advert.”

With the guidance of Ruddy and Coombe, the students will draw on the location’s history to become a part and put on a great performance. “they will draw on the host location – the days when it was a busy hub in the 1800s with a casino visited by celebrities and royalty and of when it housed the many workers of the Limni copper mines across the valley,” said the organisers.

While engaging with the environment and each other, participants will have the time to think, talk and perform while also discovering the power of public speaking, gaining self-confidence and expanding on their existing talents. This could also be the opportunity they need to gain access into UK drama schools and colleges for those who are more serious about the business of acting.

Drama Camp
Drama camp with professional UK actresses Kathleen Ruddy and Julia Coombe. July 3-9. Kritou Terra, Paphos. €550 including accommodation and food. Tel: 99-908434 or 99-069074

The post On the steps to becoming masters of drama appeared first on Cyprus Mail.

Bar review: Eauzone at Alymra

Thu, 2017-06-22 10:55

Eauzone at Almyra offers one of the most stunning views of Paphos castle, glorious sunsets and a backdrop of the sea. Combine this with delicious cocktails and superb live music and you have a winning combination.

The hotel is offering something special this summer for both guests and locals and after a packed opening a couple of weeks ago the idea has taken off.
During the warmer months, summer soirees on Saturday evening are held at the eauzone’s rooftop pool, great live music is provided by the house band and swimwear is optional, as many chose to admire the infinity pool rather than delve its depths.

Sunday Vibezzz from 7pm-10pm offer live DJs playing back to back and is a lovely way to wrap up the weekend.

The roof terrace view is commanding and as the sun slips away, wonderful projections light up one of the whitewashed walls next to the outdoor pool.

Drinks are not cheap, but what you would expect to pay for an evening spent at such a venue, and the quality and attention to detail is paramount.

Well spaces tables and chairs, banquette-style sofa seating, day beds, and bar stools and tables are best booked ahead. This is a stunning backdrop to watch a sunset, and it starts to fill up around 9pm.

Make sure you eat before you arrive, possibly at the hotel’s Ouzeria which emanates Cyprus charm and delicious traditional fayre with a twist, as the Eauzone menu serves up bite sized offerings such as prawn tempura with chilli mayonnaise and mini spring rolls with hoi sin dipping sauce, as well as ‘sharing platters’, and they won’t fill you up. However, they are a welcome accompaniment to anything you drink.

There is something rather opulent about a visit here, the atmosphere is relaxed, but with a touch of glamour and staff are friendly and attentive without being obsequious.

Alcoholic drinks are created with flair and a good selection of wines is also available. If you opt for a non-alcoholic drink, the virgin rose petal mojito is delicious.

Gin o’ clock, as it’s called, is held on Saturday from 8pm-11pm and on Sundays from 7pm-10pm. All the usual suspects, Gordons, Bombay Sapphire and

Hendricks are available with all sorts of ‘enhancers’ such as rosemary, cucumbers, thyme, celery and of course, lemon. Special house infusions are also served and priced at €9.

If you’re looking for somewhere to while away summer weekend evenings, Eauzone is a great place to do so and provides the right sprinkling of glamour and luxury. Either as a treat night or a regular outing, weekend evenings at Eauzone should be added to your summer diary.

Where: at Almyra hotel, 12, Poseidonos Avenue, Paphos
Contact: 26 888762
Price: Gin infusion €9, Virgin rose petal mojito €7.50, Prawn Tempura with Chilli mayonnaise €16

The post Bar review: Eauzone at Alymra appeared first on Cyprus Mail.

Kasoulides to take part in Anastasiades-Tsipras meeting

Thu, 2017-06-22 10:55

Foreign Minister Ioannis Kasoulides will attend the meeting between President Nicos Anastasiades and Greek Prime Minister Alexis Tsipras, ahead of the forthcoming Conference on Cyprus, due on June 28 in Switzerland.

According to a PIO announcement, the Minister completed on Wednesday, his official visit to Hungary. During the visit, the Minister met with his Hungarian counterpart Péter Szijjártó.

The main topics on the agenda of the meeting of the two ministers and their delegations were bilateral relations between Cyprus and Hungary, the future of the European Union in relation to Brexit, migration, regional issues with emphasis on the developments in Syria, as well as energy and the possibilities of cooperation between the two countries in that field.

Kasoulides then gave a lecture at the Hungarian Institute of Foreign Relations and Trade on Cyprus energy and security policy in the Eastern Mediterranean, in the presence of diplomats, academics and members of the Institute.

The post Kasoulides to take part in Anastasiades-Tsipras meeting appeared first on Cyprus Mail.

Union authorised to take action by Hellenic Bank workers (Update-1)

Thu, 2017-06-22 10:36

(Updates with Hellenic comment in seventh paragraph and background in second)

By Stelios Orphanides

Bank workers’ union Etyk said that its members at Hellenic bank authorised it on Wednesday to take any necessary action against the lender, including strike action, citing an “arbitrary” plan to set up a joint venture to manage bad loans.

Etyk was angered by Hellenic’s decision five months ago to transfer staff to a new company, APS Debt Servicing Ltd, set up to manage its delinquent portfolio. The Cypriot unit of APS, APS Recovery Ltd and Hellenic will own 51 per cent and 49 per cent in the new firm. It is scheduled to start operating on July 1, after it received all pertinent regulatory approvals.

Etyk said 99.3 per cent of the “large number of colleagues” who participated in a vote authorised the union to send “resounding messages in every direction”.

“We will not accept the victimisation of any of our colleagues,” the union said, adding that it wants to have every job secured in the long-term.

Hellenic, which posted a €10.5m net loss in the first quarter, and generated a €63.5m loss last year, is still struggling with non-performing loans amounting to around €2.5bn, or 57 per cent, of the total as per March 2017, compared to under €2.7bn, or 59.5 per cent, in the first quarter of 2015.

“It is not clear to the colleagues whether the current move of Hellenic Bank is an experiment by employers to get rid of services and workers,” the union said, adding that the agreement with APS could serve as a precedent for other banks.

Etyk, known for its harsh rhetoric, suffered a humiliating defeat in 2015, when Attorney-general Costas Clerides opined that it had no right to strike to protest the appointment of managers selected by Hellenic Bank’s administration.

In its first reaction, a Hellenic Bank source who spoke on condition of anonymity said that by setting up of the new company “no job will be changed, no salary and no benefit will change”.

The lender aims at “safeguarding workers’ rights and the effective, speedy reduction of non-performing loans,” Hellenic said. “We are agreed that the rights of workers transferred to the new company and the obligations stemming from employment contracts and collective agreements, as well as all jobs will be preserved in accordance with relevant legislation”.

Hellenic added that it agreed to a range of concessions to affected workers, including re-appointing them at the bank on the same employment terms after a two-year period, and that the bank’s administration is prepared to continue dialogue with the union.

The bank also accused Etyk of lack of cooperation in the area of healthcare insurance and as a result Hellenic and APS will offer affected workers healthcare coverage “via contributions to other funds”.

The post Union authorised to take action by Hellenic Bank workers (Update-1) appeared first on Cyprus Mail.

Toothpick crossbow craze sparks parents' fears

Thu, 2017-06-22 10:10
Parents in China are calling for the latest toy craze - miniature crossbows that shoot toothpicks - to be banned.

10 simple ways to help your Cyprus based home sell more quickly

Thu, 2017-06-22 10:04

Most people are currently afraid of the bad state of the real estate market. And it’s true, there have indeed been some problems that have arisen recently. But what’s good for a seller can be good for a buyer, and if you know how to take advantage of this, you can get your home sold more quickly. Let’s have a look at 10 simple ways to help your Cyprus based home sell more quickly!

Audit the agent’s online marketing.
An astounding 92% of people who buy homes look up houses online. Because of this, it is important to have a look at the online marketing strategy of your agent or take care of it yourself.

Set the right price.
Many people think it’s a good idea to set a high price in the beginning and then to lower it if they don’t manage to sell it. However, this might lead to a delay in selling the house, so think well about it. There is also a matter of image involved in this sense. If people continue to see your property on the market constantly lowering the price, they will assume that it’s not worth what you’re asking for or that there is something wrong with it. It doesn’t matter how far from the truth that is as public image tends to have a strong impact regardless of that. This is why it’s important not to go overboard with pricing in the beginning as you might be hurting the house’s overall image.

Make a video about it.
Vlogs are extremely popular nowadays, and a video can manage to convey what words and pictures can’t. Simply grab a camera (your phone will do) and walk around the neighborhood. Talk about the home, the neighbors, what you loved and what not. Make sure that whatever your video recording device of choice is, it’s of high quality. The quality of the video is the first thing that people will notice and if you show them a low resolution video of what you’re trying to sell, it’s not going to translate well. High quality video recording options are very affordable today and you should aim to make at least 1080p videos (that’s full HD and will convey a message of quality).

Make it look nice.
This doesn’t mean to renovate it completely, but a new paint layer and some flowers can change the entire aspect.

Use your neighbours.
Throw a huge block party before selling the house and let your neighbors spread the word. They might have friends or relatives willing to buy a new home, so why not take advantage of that?

Offer a clean home.
A potential buyer needs to imagine himself living in that home. If the home is filled with your personal belongings, it will be hard for him to do so, so make sure you let him see a clean and decluttered home.

Use Facebook.
In case you didn’t know, the huge social network is useful for mostly anything. Look up real estate groups and ask people to share your announcement.

Be flexible.
You should try to adapt to your prospect buyer’s schedule, since it’s in your best interest. Going a little out of your way can help you a lot.

Offer to leave good things for the future owners as part of the sale! A small gift or something you leave behind can mean a lot, such as stainless steel appliances or some nice decorations.

Take good photos.
Quality and professional photos can attract many people, so don’t let this opportunity slip away and invest in that if you can truly afford it. Or you could ask a friend who loves photography to help you with that.

Offer cash back as an incentive
A good incentive would be to offer a form of ‘cash back’ to your buyer. First time buyers who generally have little upfront cash would welcome this. Cash back can be used to pay for new furniture, carpets or other items necessary when buying a new house. Most of the popular mortgage providers and lenders allow up to a 5% cash back as part of the transaction.

The post 10 simple ways to help your Cyprus based home sell more quickly appeared first on Cyprus Mail.

Authorities investigating suspicious adoption case

Thu, 2017-06-22 09:59

Police are investigating a case reported by a man who claims that his wife gave up their new-born baby for adoption without his consent and was trying to get it back, it was reported on Thursday.

According to the daily Phileleftheros, the man, who lives in the Famagusta district, reported on Tuesday that his partner, with whom he has three other children, gave up their new-born for adoption, even though he had not given his consent.

The man reportedly claimed that his partner, who gave birth recently in a private clinic, had registered the baby as having an unknown father, and gave up their child to a couple from another town.

The adoption, the report said, was done with the approval of the state services.

The daily said that the father had alerted the police and the welfare services of his partner’s intentions and that he was against this, but he was ignored.

He claimed that the welfare services urged him to hire a lawyer and claim the custody of his child in court.


The post Authorities investigating suspicious adoption case appeared first on Cyprus Mail.

FT 300: full 2017 list of top US registered investment advisers

Thu, 2017-06-22 09:58
The fourth annual line-up of leading advisers, with the methodology for inclusion

Top advisers pull their clients’ investments out of hedge funds

Thu, 2017-06-22 09:58
Average FT 300 portfolio dropped allocation by a third over the past year

US advisers try to extend ‘Trump Bump’ investment returns

Thu, 2017-06-22 09:58
Failure to deliver corporate tax cuts could threaten stock market gains