In Brief
Vouros to start talks over $1 billion port project Cyprus will begin talks on Tuesday with Vouros Investments Ltd over a $1 billion project to develop and expand the port of Larnaca into the main passenger shipping hub of the east Mediterranean island. Vouros will design, build, finance and operate the port for 35 years, after which ownership will revert to Cyprus. During the tenure, Cyprus will receive 7 percent of the venture’s revenues, or more than 100 million euros ($146 million) at today’s prices, according to a statement by Transport Minister Nicos Nicolaides yesterday on the Cypriot Press Ministry’s website. «Our intention is to move quickly to open negotiations so as to start the construction process for this project without further delay and get it functioning as soon as possible,» Nicolaides said. In addition to passenger shipping facilities, the development includes a 1,000-berth marina as well as homes and hotels, he added. (Bloomberg) MPB announces decision to keep its HQ in Cyprus Marfin Popular Bank (MPB), the second-biggest bank on Cyprus, said yesterday it had decided it will keep its headquarters on the eastern Mediterranean island. «MPB’s management believes the reactions that followed its initial decision [to move to Athens] have revealed the need for constructive dialogue for the enhancement of institutional and regulatory framework of Cypriot financial services,» the lender said in a statement. Turkish banks Ratings Agency Fitch said in a report published yesterday that Turkey’s banking system has fared fairly well despite a severe downturn in the economy, with the agency expecting gross domestic product to contract by as much as 4.5 percent during 2009. The country’s banks continue to post high profitability and to boost capital adequacy ratios through increased retained earnings. Turkish banks’ ratings are, to date, unaffected by the global turmoil and there have been no downgrades of issuer default ratings (IDRs) or individual ratings so far in 2009. The Fitch Banking System Indicator for Turkey is «C» reflecting adequate quality and strength in the system. «Despite the harsh economic environment, the Turkish banking system appears to be well positioned to absorb any increased asset quality deterioration given current levels of profitability and capitalization,» says Janine Dow, senior director on Fitch’s Financial Institutions team. Loan growth, rapid during 2002-08, has inevitably slowed and Fitch believes asset quality is the main risk for Turkish banks in 2009 and 2010. Impaired loans reached 4.9 percent of total sector loans in the first half of the year, with specific provisions covering 82 percent of these. «To date, the asset quality of corporate and commercial loans has held up well, but contraction continues to represent the main risk for lending to retail and small to medium-sized businesses,» it added. EU probe The European Union started an in-depth investigation into Romanian state aid for Oltchim SA, the country’s state-owned PVC plastic maker. The aid is composed of Romania’s plan to grant a 135-million-euro ($197 million) debt-to-equity swap and a 339.2-million-euro guarantee for Oltchim, the European Commission in Brussels said in a statement yesterday. The regulator said it has doubts about whether the planned measures are in line with state-aid rules. (Bloomberg)
