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BoC looking for “transformational trades” in NPL reduction

Bank of Cyprus CEO John Hourican said that he and his credit institution are looking at potential “transformational trades” which could help deal with the large stockpile of NPLs.

In an interview with Bloomberg, Hourican first defended Cyprus and its “broad-based recovery”.

“I think Cyprus is a case study of how a small country should behave in the context of a big Europe,” he said.

“Cyprus has been doing everything it said it would do. Maybe it should have done a little more reform in labour law, or in privatisations. But in general, this country has behaved impeccably in giving the confidence to investors that when it says it’s going to do something, it does it,” he added in response to a question regarding Cyprus’ less-than-stellar credit rating.

Regarding the company’s stock of NPLs, Hourican said there was a lot to be done: “We’ve had eight consecutive quarters of material reductions, we’ve taken 22% of GDP off our balance sheet in reducing NPLs. But we still have a monstrous stock.”

“It’s easy to create NPLs, and it’s quite a journey to repair them… What we’re trying to focus on now is: Is there a transformational trade?”

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