Pimco has bought a €545m (£485m) portfolio of non-performing loans from the Bank of Cyprus.
The portfolio comprises almost 16,000 loans made mainly to retail and SME customers and is secured over around 4,000 real estate assets. The net book value of the assets amounts to €244m.
Pimco is paying 44% of the gross book value of the loans, with half paid on completion of the sale and the remaining deferred to December 2025, without any conditions attached.
Bank of Cyprus group chief executive Panicos Nicolaou said the sale was a milestone in the bank’s de-risking strategy and that it had over the last six months sold €1.4bn of non-performing loans. Since 2014, it has sold some €13.2bn of bad debt.
He added: “We remain committed to further de-risking the balance sheet and we will continue to seek solutions, both organic and inorganic, to achieve our target of a single digit non-performing loan ratio by the end of 2022. We will continue to assess the potential to accelerate the decrease in non-performing loans on our balance sheet through additional sales.”
Morgan Stanley and KPMG advised on the deal.
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