Bank of Cyprus has sold a non-performing loan portfolio, valued at €2.8 billion, to Apollo Global for €1.4 billion, marking a significant step in the bank's efforts to improve its financial stability.

Target Information

The target of this transaction is the loan portfolio known as Project Helix, managed by Bank of Cyprus (BoC). This portfolio has a gross book value of €2.8 billion and consists primarily of non-performing loans (NPLs) issued to companies and small businesses in Cyprus, all of which are secured against real property. The sale is a strategic move for the bank to clean up its balance sheet in light of growing regulatory pressures from the European Central Bank (ECB) and to enhance its financial stability moving forward.

This sale is noteworthy not only for its size but also for what it represents in the broader context of Cyprus' banking sector, which has historically struggled with high levels of bad debt. By opting for this transaction, Bank of Cyprus aims to significantly reduce its non-performing loans, thus allowing for a more robust and healthier financial position.

Industry Overview in Cyprus

The economic backdrop in Cyprus has seen a gradual recovery since the financial crisis, but challenges remain, particularly with regard to non-performing loans. The banking sector has exhibited significan