Bank of Cyprus seeks new opportunities for the Bank's participation in domestic and international projects, always ensuring that the required criteria and procedures are fully respected in each case.

In their joint interview with "Kathimerini", Michalis Athanasiou, Executive Director of the Global Corporate Banking & Markets Division, and Christos Kalogeris, General Manager of BOC Asset Management, stress that, as a banking institution with very healthy liquidity, lending is one of the Bank's key business parameters, while at the same time they point out that Bank of Cyprus will continue to play a leading role in investment financing.

Finally, they underline that in a low interest rate environment, the need to find new productive ways of utilising these rates is imperative.

- Do you consider this to be a period of transition and evolution for banks? How does the above view apply to your sector after the pandemic crisis?

 - M.A.: Even before the pandemic, Cypriot and European banks were undergoing a period of transformation and technological upgrading. The pandemic simply confirmed—first and foremost—that the shift towards digitalisation and technological solutions is both correct and necessary.  Although the pandemic created a period of uncertainty, the prudent shift by most banks towards ensuring the sustainability of both themselves and their customers was imperative.  Using our technological superiority and the prudent management of the crisis that we have made allows us to build a solid foundation of growth in our sector for the foreseeable future.

 - Is there additional interest from companies for lending? Does it concern new hotels and renovations, or has the Coronavirus and the internal political developments as regards the Cyprus Investment Programme, which was terminated, turned the interest to other types of investment financing? And if so, where?

 - M.A.: Interest in business lending has picked up significantly in recent months. We also observe that it is no longer just about finding additional liquidity to deal with the effects of the pandemic, but also about implementing development projects that were either frozen due to the pandemic and are now being restarted or are new. The demand for loans comes from all sectors of the economy and concerns various types of projects, products, and services. As the largest corporate financier, the Bank of Cyprus will continue to play a leading role in financing investments in the main sectors of the economy such as Tourism, Trade, Construction, and Industry, and in growing sectors such as Energy, Technology, Health and Education. As regards your comment on the Cyprus Investment Programme, we should just mention that the bank had not provided any loans of significant value related to the programme, so it was not affected by its abolition for the time being.

- Businesses are complaining that they need more liquidity, but now we understand that the lending criteria of banks are very strict. Are we sure that, in the process of financing businesses, the phenomena of the past will not be repeated?

 - M.A.: As a banking institution with very healthy liquidity (customer deposits), lending is one of our key business parameters. For this reason, we provide a wide range of financing solutions for our customers. By way of illustration, in the semester that ended 30 June 2021, new lending amounted to €894 million, up 30% compared to the same period last year. As for our lending criteria, they are as stringent as necessary to avoid past phenomena that created billions in non-performing loans and continue to plague banks to this day. We believe that our lending practices since the 2013 crisis are demonstrably sound. To summarize:  

• the percentage of loans made in recent years that have been turned into non-performing loans is almost zero.

• after one year of suspension of the payment obligation, only 4% of these loans are in arrears (of which 95% are less than 30 days in arrears)

 With the above in mind, I would say that at the Bank of Cyprus we have found the golden mean to remain by far the main source of financing for the economy and at the same time ensure that the lending we provide meets all the criteria of a prudent lending policy.

 Supporting role

- How will your sector respond to the Recovery Fund investments in terms of the big—at least—digital and green growth pieces?

 - M.A.: As for our role, it will certainly be supportive in every sense, as it was during the difficult pandemic period when we helped both our customers and society in general through programmes such as Support Cy. As regards lending specifically for green and digital projects, these are already an important part of our strategy. In fact, we not only seek to support such sustainable projects but also set specific lending criteria that ensure that ESG criteria are met during the implementation process.

- Apart from the general benefits to the states, is it also an opportunity for Cypriot banks with so much liquidity on their balance sheets to channel it into projects through the Fund?

 - M.A.: Rest assured that when lending needs arise for projects related to the Recovery Plan, the Bank of Cyprus will be there. 

 - Do you focus on large investments in Cyprus and therefore on financing them, or does the lending of large projects extend to countries abroad as well? If so, in which sectors?

 - M.A.: As the largest bank in Cyprus, it is a given that we want to be involved in any large viable investment in our country. In the first half of 2021, the Bank had significant revenues from managing loans to large, local, and international companies. The presence of the Global Corporate Banking & Markets Division was instrumental in both revenue growth and the overall growth of the Cypriot economy. The Global Corporate Banking & Markets Division offers integrated solutions to the full range of needs and requirements of large corporates with local and international presence. In addition, a wide range of services is offered to both shipping and institutional clients through a single and holistic package of banking and investment products and services. The above is complemented by international joint ventures and financing of major projects for clients with both local and international operations.  Increasing the Bank's revenues from the business and investment banking sector is an important pillar of our strategy and we constantly seek to identify new opportunities for the Bank's participation in international projects, always ensuring that the required criteria and procedures are fully complied with in each case. 

 - The new Bank of Cyprus slogan is "In every next move". How does it apply/represent your business sector?

 - M.A.: At Bank of Cyprus, we have long understood that our financial results are directly intertwined with the financial well-being of our clients and the wider economic environment in which we operate. The effort to put the customer at the centre of our efforts is continuous and it is on the basis of this customer-centric approach that we are constantly moving forward in all areas of our business, truly aiming to be there for our customers "in their every next move", in the easy and the difficult to operate and decide together.

Investment advice to Cyta

 - We learn of a cooperation between Cyta and Bank of Cyprus regarding the advisory management of the former's cash fund. Can you give us more details?

- C.K.: BOC Asset Management Ltd (BOCAM), a wholly owned subsidiary of The Cyprus Investment and Securities Corporation Ltd (CISCO), which is wholly owned by the Bank of Cyprus, has been selected, following a tender process, to provide advisory services for the utilisation of cash reserves to Cyta. BOCAM is to provide specific investment advice to Cyta and its affiliated companies, Digimed Communications Ltd and Iris Gateway Satellite Services Ltd, on various financial products which are within the parameters of the Organisation’s investment policy and desired risk appetite. The purpose of BOCAM is to help the Organisation and its affiliated companies to achieve diversification of the investment portfolio, reduce concentration risk and increase returns, always within the limits of the Organisation’s respective policies. BOCAM, as an independent investment advisor, will assist Cyta in implementing its new investment policy in cash management, as determined on the basis of the investment framework approved by the Minister of Finance at the time.

- Is there additional interest from other companies like Cyta that are interested in similar services and what exactly are you offering them?

- C.K.: Yes, there is significant interest in similar services from other organisations who need guidance on how to manage their cash and investments properly. The otherwise necessary monetary policy decisions of the European Central Bank, which have the ultimate aim of increasing investment in productive sectors, have led large institutional institutions to the need to find new ways of using their deposits and liquid assets, as not only do they now yield very little, but their returns can even be negative. Particularly in a low interest rate environment, the need to find new productive ways of using them is an imperative that is now recognised by almost all organisations with this financial profile.

Investment products to individuals and institutional investors

- In general, where do you invest for your clients in BOCAM and who can become your client?

- C.K.: BOCAM is one of the largest companies in its sector in Cyprus, offering individuals and institutional investors a wide range of investment products and discretionary and advisory management services, adding value to their investment portfolios. Our clients are both individual investors and institutional investors, such as some of the largest Pension Funds and insurance companies in the country. Our clients' investments focus on global equity and bond markets using primarily mutual funds and exchange traded funds with strict selection criteria. Our goal is to offer investment products and services that meet the current and future needs of each individual client, depending on their investment profile and risk appetite. More generally, the services we provide include:

• Management of UCITS funds;

• Discretionary Portfolio Management for institutional and private clients;

• Alternative Investment Fund Managers (AIFM);

• Institutional Investor Advisory Management; and

• Fund hosting services.