BANKING: Apollo ready to buy 3.5 bln dollars of Bank of Cyprus bad loans

Apollo Global Management is the preferred bidder to buy a non-performing loan portfolio being sold by Bank of Cyprus, according to Bloomberg.

Bank of Cyprus and Apollo are in talks in London to finalise details of the sale of a roughly €3 bln ($3.5 bln) portion of the lender’s bad-loans book, sources told Bloomberg.

Cypriot and European officials have been urging the nation’s banks to reduce the amount of NPLs on their books, aiming to avoid a repeat of the island’s 2013 economic crisis. US funds have been circling southern European banking assets, with Lone Star acquiring a multi-billion-euro Spanish property portfolio in June.

Despite Cyprus sharp economic recovery over the past five years, NPLs still weigh on banks’ profitability and have prevented significant improvement in the financial health of households and companies, the International Monetary Fund said in July.

The European Commission and European Central Bank have called on the country’s banks to prioritise reducing bad loans.

Bank of Cyprus reported some progress in its first-quarter earnings, saying it had reduced bad-loan exposure for a 12th consecutive quarter.

With the NPL sale progressing, Bank of Cyprus has moved back the date for its second-quarter results to August 27.