ECONOMY

In Brief

Bad loans in Cyprus may be higher than thought Household nonperforming loans at Cyprus’s banks may be higher than the 8.5 percent of total assets reported by the eastern Mediterranean island’s central bank at the end of the third quarter, economist Marios Mavrides said. «We have a problem in the housing loans portfolio and we are not aware of it,» Mavrides, an associate professor of economics at the Nicosia-based European University of Cyprus, said in a telephone interview yesterday. «The central bank figure does not include fully collateralized loans. We will see a significant decrease in the banks’ profitability in the next couple of years.» The Central Bank of Cyprus classifies nonperforming loans as those that show more than three months’ delay in servicing and aren’t fully backed by collateral. The numbers don’t include loans that are fully backed by collateral, the bank says. A bank spokesman declined to comment on Mavrides’s remarks. The 8.5 percent figure also doesn’t include mortgages given by more than 100 cooperative savings banks, which aren’t supervised by the central bank. Mortgages in Cyprus accounted for 23 percent of total loans reaching 60.2 billion euros ($78.3 billion) in November, according to data from the Central Bank of Cyprus. The savings banks have about 20 percent of those loans, the data indicate. Nonperforming loans for households and businesses at Bank of Cyprus Pcl, the island’s biggest lender, stood at 6.7 percent on September 30, compared with 6.2 percent on June 30. (Bloomberg) Romania hoping to tap IMF-EU for backup credit BUCHAREST (AFP) – Romania hopes to reach an agreement with the International Monetary Fund and the European Union on a precautionary credit line when its current bailout deal expires, officials said Thursday. Central bank Governor Mugur Isarescu, President Traian Basescu and Prime Minister Emil Boc met to discuss the details of such an agreement, but no official figure was released. According to government sources quoted by the Mediafax news agency, the credit line could be worth 3.6 billion euros. Romanian authorities said that under such an agreement funds would only be drawn in case of a major crisis. Basescu has repeatedly called for the conclusion of a new deal with the IMF, stressing that this would boost Romania’s credibility on foreign markets and facilitate its access to cheap credit. In May 2009, crisis-hit Romania obtained a two-year 20-billion-euro lifeline from the IMF, the EU and the World Bank in exchange for key reforms aimed at slashing public spending. Power investments Greece’s government allocated 367.9 million euros ($477.7 million) to finance improvements to the country’s electricity and natural gas networks. Public Power Corp SA, Greece’s biggest electricity producer, and natural gas grid operator DESFA SA will carry out the works, which will also be funded by the two companies and the European Union, the Environment, Energy and Climate Change Ministry said in an e-mailed statement yesterday. For the electricity network the estimated cost of the work is 583.3 million euros and includes plans to link the Cyclades Islands and decrease Greece’s dependence on oil, the ministry said. The total budget to install infrastructure to ensure the smooth operation of the natural gas system is 423.2 million euros, the statement said. (Bloomberg) Big loan Titan Cement Co SA, Greece’s biggest cement maker, raised 585 million euros ($760 million) in the country’s largest loan from international lenders since 2008. The so-called forward-start loan locks in financing before Titan’s existing arrangements expire in April next year, the Athens-based company said in a stock exchange filing. Titan’s deal is the largest syndicated credit to a Greek borrower from foreign banks since Aegean Marine Petroleum Network Inc got a $1 billion three-year revolving credit in September 2008, according to data compiled by Bloomberg. (Bloomberg) Polish jobless Unemployment in Poland rose to 12.3 percent in December from 11.7 percent in November after remaining steady at 11.5 percent in the two previous months, the Labor Ministry said yesterday. The estimate translated to some 1.95 million jobless, up from 1.86 million in November, the ministry said. (AFP)