Pepper has won a contract to service an €800m portfolio of non-performing loans with the Bank of Cyprus Plc.
The portfolio is focused on lower value, real estate secured connections in the SME and retail portfolio.
Pepper has begun the process of placing a team of around 40 people into the bank alongside the bank’s own in-house servicing team, to deliver the workout of this €800m portfolio. The team will be led by Mark Caplan, managing director of Pepper’s Commercial Real Estate (CRE) loan servicing division in the UK.
In a statement, the bank said: “Pepper will bring their own experienced workout professionals, initially amounting to around 40 employees, who will focus on resolving a specified portfolio of circa €800m retail and SME non-performing loans.
“This will accelerate the pace at which the bank can resolve specific problematic small ticket loans, which is critical to, and entirely consistent with, the bank’s commitment to fully resolve the non-performing exposures issue in the shortest possible time.”
The agreement with Pepper “improves the ability to deliver non-performing exposures reduction across Cyprus in a category of loans critical for the entire economy,” said the bank.
“Pepper will commence their work immediately,” Bank of Cyprus said. “We also expect the servicing solution to be scalable during 2018, which will allow the bank to achieve greater pace in delivering asset quality improvements. This could also provide opportunities to assist other banks on the island in delivering faster improvements and wider strategic options.”
Richard Klemmer (pictured), CEO of Pepper UK, added: “We are always keen to explore opportunities in new markets and a move of this significance into the South Eastern European region is an extremely exciting one, given the scale of the distressed debt market and the demand for more specialist servicing expertise.”