Financial Mirror (Cyprus)

Bank of Cyprus Sticks to 'Development Bank' Plan to Deal with NPLs

Bank of Cyprus is pondering whether to split its operations and have a 'bad bank' to handle the non-performing loans or to opt for an asset management company, similar to mortgage lender Northern Rock that collapsed in 2008 due to heavy borrowing and uncontrolled securitisation.

This is why HSBC has been called in to advise the island's biggest lender which is still suffering from a Jekyll-and-Hyde syndrome of whether to recover the billions owed by property developers or to allow them to continue calling the shots and repay their NPLs at a slower pace, forcing the bank and its clients to suffer.

The bank's entire board met with President Nicos Anastasiades on Thursday and then convened for their two-day directors' meeting ending on Friday to consider HSBC's proposals, with the high-profile appearance at the presidential palace giving unnecessary fodder to political parties to speak their minds. …

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