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Cyprus developers top list of risky loans

09 December, 2013

A number of property developers, including Leptos, the Dolphin and Shacolas, were among the companies named in an alleged leaked memo from the Bank of Cyprus as having ‘risky’ loans, the CyprusPropertyNews web portal reported last week.
The bank’s total exposure to non-performing loans could be as high as 6 bln euros, with developers being among the worst corporate customers, according to an internal bank memo leaked by Politis.
The paper published the purported bank memo last week, showing that a series of loans issued originally in the period 2005-2008 were being refinanced into 2011 and beyond, even though it should have become obvious by then that they had turned toxic.
The NPL portfolio is the single largest threat faced by the bank and there are fears that the bad loans could deplete its equity after the lender was recapitalised by seizing customers’ deposits.
According to the leaked BOCY memo, up until June 2013 the Dolphin Group – part of the Aristo Group of developers – owed the bank 300 mln euros, the Leptos Group’s liabilities came to 510 mln, the Shacolas Group is shown to owe 336 mln in 2012, which was somewhat decreased after the group sold its stake in mobile operator MTN this year, and the Tsokkos Group had pending loans of 230 mln.