Cyprus, the small island at the crossroads of Europe, Asia and Africa, has recovered from its financial crisis in 2012. Cyprus’ economy suffered from its close association with Greek banks but one bailout was enough to sustain Cyprus’ economy. The country’s economic difficulties created legal work recently, especially in the banking sector.
In 2015, Cyprus' banks’ proportion of non-performing loans was 47.8%, which was spread between only three lenders, and one trend in the market recently has been the increasing amount of loan portfolio sales. Cyprus established APS Debt Servicing Cyprus to alleviate the debt burden on banks, and it notably bought NPLs and real estate assets from Hellenic Bank. Altamira, meanwhile, established a joint venture with Cyprus Cooperative Bank to manage its multi-billion loan portfolios.
Restructuring has been another story in the banking sector, with lenders reorganising, including through debt-to-equity swaps. One large deal saw Co-operative Bank was split into good and bad banks, with the government taking charge of the latter. Hellenic Bank bought the good bank and closed hundreds of branches across the country.
Looking at sectors, construction has been positively impacted by the country's recent economic upturn. Smaller contractors have made a comeback and are operating in the market alongside large companies. In 2017, Cyprus unveiled new tenders for projects including Limassol One – anticipated to be the tallest residential seafront tower in Europe on completion, and Limassol Del Mar, a multimillion euro project to build 168 luxury properties.
Tourism is a sector benefiting the country’s economic growth and creating transactional work. With Cyprus continuing to report increasing numbers of tourists, new developments to meet demand are being announced. For example, the development of a casino resort in Limassol by Hard Rock International and Melco International development. Additionally, Wyndham Hotel Group picked Cyprus as one location it would be expand its hotels portfolio in 2018, while an Israeli joint venture acquired Cypria Maris, Cypria Bay and Laura Hotels a year earlier.