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FinMin: Cyprus enters recovery phase as banks say they are ready to support the economy

LoveCyprus — Wed, 03 Jun 2020 05:52:54 +0000

The first signs from the market following the partial lifting of lockdown measures are very positive, Minister of Finance Constantinos Petrides said on Tuesday, adding that “we will emerge victorious from this uncertain battle.”

Cyprus President Nicos Anastasiades and Petrides discussed the situation of the economy with the CEOs of the Cypriot commercial banks after the launching of the government second support package that contains interest rate subsidies and VAT reductions for the tourist sector and guarantees to the European Investment Bank for cheap loans to the economy through local banks.

It was a very constructive discussions, we pass to the second phase, that of recovery, Petrides said in statements following the meeting adding “both the government and the banking sector will contribute with the means at their disposal towards that end.”

“Market sentiment is changing and this is very important,” Petrides said.

On the interest rate subsidy, Petrides said this is a very important assistance and what we said today is that while entering this second phase and with the change in sentiment of the people, the banks with their participation and by explaining these rapid procedures will do their part so that we all support the economy.”

“And we have every right to be really optimistic that we will manage to emerge victorious from this crisis.”

Responding to a question, Petrides said “the first signs concerning the market and the labour market following the partial lifting of restrictions are very positive and we have every right to be optimistic.”

Stating that there will be more data in the coming period, the Finance Minister added that “it seems the government’s measures have acted as a catalyst.”

He also noted that the growth registered in the last years have given the public finances and the private economy the resilience necessary to cope with the crisis.

“Of course, there are problems, currently our plans are more targeted but we are convinced we will emerge victorious from this uncertain battle, both the private sector, the state, the government and political parties. And this is the positive message we should give as we pass to the restart phase,” he concluded.

On his part, Ioannis Matsis, President of the Association of Cyprus Banks (ACB) assured that the banks have the intention, the liquidity and the capital buffers to support the economy.

Welcoming the government measures, Matsis said that measures such as interest rate subsidies and loans through the EIB will give the banks greater capacity to provide loans.

He also observed that since the relaxation of the lockdown measures and by monitoring credit and debit card movement and other data “we have seen the economy expanding rapidly.”

“Therefore, things seem better than our April estimates and we are very optimistic,” he said.

Asked on the role of the banks in the economic restart phase, Matsis said “as banks we have the will, the intention the liquidity and the capital adequacy to support the economy.”

“It would be beneficial for all, both the society, the economy and the banks alike, to proceed with (granting of) financing and liquidity,” he said, pointing out however that banks always need to assess the viability of the borrowers.

But Matsis noted that “the schemes announced by the government will bring increase volume (to the banks) and will be very helpful.”

Source: CNA

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Cypriots increasingly use credit cards amid coronavirus outbreak

LoveCyprus — Wed, 29 Apr 2020 08:13:35 +0000

Cypriot consumers are increasingly turning to credit cards as opposed to traditional cash payments for their daily needs amidst the coronavirus pandemic, data by JCC payments systems show.

According to data given to CNA by JCC, use of credit or debit cards usage in supermarkets rose by 31% from March 17 to April 26 compared with the respective period of last year, limiting the reduction in overall credit card usage for the period to 10% amid containment measures to limit the spread of the disease.

Furthermore, the usage of credit cards in kiosks, where Cypriots traditionally used cash, spiked by 93% compared with the respective period of last year.

Speaking to CNA, Aris Kourris, JCC’s Chief Operating Officer, said the rise in card usage in supermarkets comes as many customers turned from cash to credit cards due to calls for the usage of plastic money as opposed to cash in an effort to contain the spread of coronavirus, as well as easier procedures implemented by commercial banks such as the issuance of cards via internet.

He also said credit card usage for payments to government rose as public services enabled credit payments for social insurance.

“We see a tendency by corporations towards e-trade, with a lot of companies making available internet payments to consumers,” he added, noting that JCC Smart payments are increasingly used by companies for e-payments.

“These consumer habits are expected to remain,” he said.
Also, Kourris said the increase of transaction value for contactless credit card transactions, that is, without the consumer having to input the password, from €20 to €50 also boosted credit card usage in places where consumers used to use cash such as kiosks.

Overall card usage for the period of March 17 and April 26 declined by 10% in terms of value compared with the respective period of last year, while card usage in transactions declined by 19%.

Card usage in shops, the majority of which have closed due to containment measures, plunged by 95% compared with March 17 – April 26 of 2019, while card usage in restaurants marked a steep decline of 91% and by 94% for travel purposes.

The usage of Cypriot credit or debit cards abroad also declined by 38% in value for the period of March 17 to April 26 from an increase of 3% in the first quarter. Concerning volume of transactions, credit card usage abroad declined by 31% in March 17 and April 26 year on year.

Moreover, the usage of foreign credit cards in Cyprus for the period of March 17 and April 26 declined by 76% in value and by 74% in transactions compared with a reduction of 10% and 1% respectively in the first quarter of 2020, as restrictions of entry have been in force.

Source: CNA

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CBC calls directly supervised banks not to pay dividends amid COVID19 turmoil

LoveCyprus — Wed, 08 Apr 2020 12:12:48 +0000

The Central Bank of Cyprus (CBC) with a new recommendation published today calls on directly supervised banks or less significant credit institutions not to pay dividends until October 11, 2020, amid the crisis caused by the coronavirus pandemic.

The new recommendation echoes the recommendation issued by the European Central Bank to large eurozone banks directly under its supervision.

The CBC recommends to Cypriot smaller banks to refrain from distributing any dividend, to refrain from issuing any irrevocable commitment to distribute dividend in 2019 and 2020 and not to commit to any share buy backs aiming at remunerating shareholders.

Furthermore, the CBC stresses than “any less significant institution that fails to comply with this recommendation will be called on to provide explanation to the CBC.”

“The CBC considers that credit institutions should be in position to continue their role to fund households, small business and corporations amid the coronavirus pandemic and the adverse impact this has created. For this reason, it is necessary the credit institutions to preserve their capital base to support the real economy in this current extremely uncertain environment,” the CBC stressed, highlighting that “the preservation of capital base to support the economy and absorb potential losses is considered by the CBC as this highest priority over any possible dividend distributions and share buy-backs.”

Source: CNA

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Applications for loan repayment suspension exceed 23,000 in Cyprus’ two largest banks

LoveCyprus — Wed, 08 Apr 2020 12:04:06 +0000

Applications for loan repayment suspension surpassed 23,000 in Cyprus’ two largest banks, as retail borrowers and companies are trying to preserve disposable income amid the economic activity shutdown due to the coronavirus pandemic.

The Ministry of Finance issued a decree allowing eligible borrowers, those who in end-February 2020 had no arrears exceeding 30 days to request a loan repayment suspension.

According to information gathered by CNA, in Bank of Cyprus, the island’s largest lender, applications by yesterday afternoon, exceeded 11,000 with the bank approving the overwhelming majority.

Sources from Hellenic Bank, the second largest lender with a predominantly retail loan book, applications exceeded 12,000.

95% of applications come from eligible borrowers, with 80% of applications coming from retail borrowers and 20% by corporate.

As part as retail borrowers are concerned, around half of the applications are associated with housing loans, consumer credit and credit card limits.

Both banks have clarified that loan suspension begins in end-March, following the approval of the law, irrespective of the date of the application’s submission, while the banks intent to return money in case of instalments paid before an application is submitted.

The European Banking Authority (EBA) and the Single Supervisory Mechanism as well as the local regulator, the Central Bank of Cyprus (CBC), have clarified that loans which will freeze under the legislated and general loan repayment moratoria will no be considered as non-performing, while banks following by the EBA and the CBCB have announced they will not compound interest over the nine-month suspension period.

Source: CNA

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Cyprus banks suspend foreclosures for three months amid COVID-19 pandemic

LoveCyprus — Thu, 19 Mar 2020 08:56:22 +0000

The Association of Cyprus Banks has announced that banks decided to suspend foreclosures for a period of three months amid the disruption created by the coronavirus pandemic.

The suspension will be in place until June 18.

“Recognizing the difficult situation facing the country, the Cypriot banks will do their utmost to support the economy, businesses and households and the wider society,” a press release issued on Wednesday by the association reads.

It also notes that the banking sector reaffirms with its actions its will to assist the efforts for the recovery of the economy in coordination with the competent authorities.

Source: CNA

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