Troika begins review of bailed-out Cyprus
International lenders yesterday began their third assessment of the Cyprus economy to see if Nicosia is upholding its obligations under a bailout accord struck last March. Cyprus has successfully completed two similar reviews by the so-called troika of lenders. The latest examination will run two weeks and focus on bank restructuring, the planned privatization of state assets and how to deal with nonperforming loans. The central bank said troika technocrats, who will be on the island until February 12, started their mission with “general discussions” on the financial sector. They will also meet in coming days with officials from the major banks and the cooperative banking movement, which is undergoing a 1.5-billion-euro restructuring process. Nicosia has said it will stick to the bailout agenda no matter how unpopular it is, but the troika will also look at revenue-raising measures and how effective they have been. A survey released yesterday by the University of Cyprus estimated the economy contracted 5.5 percent in 2013 – lower than the troika’s forecast of 7.7 percent – and that it will continue to shrink by 5.4 percent in 2014.
National Bank of Greece is exploring a sale of London-based NBGI Private Equity Ltd, according to two people with knowledge of the matter. National Bank is working with investment bank Cogent Partners, which specializes in secondary private equity transactions, said the people, who asked not to be identified because talks are private. The Athens-based lender is conducting a strategic review, which could be concluded in the first half of this year, to potentially sell NBGI or its assets, one of the people said.
Bond yields drop.
Greek bond yields fell yesterday after a blockbuster move by the Turkish central bank to hike interest rates stalled an emerging market rout that has hit the eurozone’s weakest member. Ignoring opposition from Prime Minister Recep Tayyip Erdogan, Turkey’s central bank raised rates by far more than economists had forecast in a bid to lift the lira currency off record lows. Greek 10year yields had risen sharply in recent days to reach the 2014 highs of 8.90 percent on Monday, but yesterday they fell 14 basis points to 8.53 percent, extending a retreat that started on Tuesday.