Approximately €4 million in 20,000 loans corresponding to 400 million points
By Panagiotis Rougalas
The way in which the Bank of Cyprus will proceed with actions concerning the reward of consistent borrowers has been “locked”. Specifically, it will proceed to reward borrowers with up-to-date mortgage debts of up to 350 thousand euros which are linked to either the European Central Bank's Basic Interest Rate, or Euribor, with reward points. That is, through the Plan that rewards daily transactions with Bank of Cyprus cards with points.
The BOC is expected to reward at the end of 2023 the borrowers of mortgages up to 350 thousand euros who will continue to pay their installments.
As “K” is able to know, the Bank of Cyprus is expected to return at the end of 2023 to the borrowers of mortgages up to 350 thousand euros, who will continue to pay, about 4 million euros, corresponding to 400 million points. Additionally, the loans that are in this perimeter and can potentially benefit from the Program will be around 20 thousand.
But how did the Bank of Cyprus reach this decision? According to sources familiar with the matter, due to the size of the portfolio, any decision to return money in the form of cash would be seen by foreign supervisors as a restructuring. Thus, they would not allow any reward at all – refunding money to consistent borrowers, in a similar context that other smaller banks in Cyprus have advanced.
“As a systemic bank, it also needs the corresponding approvals in order to proceed with decisions that affect its operation”, commented the same sources. As part of the announcement of BOC's financial results for the first quarter of 2023, its CEO, Panikos Nikolaou, had stated that the Bank was expecting a “green light” from the European Stability Mechanism (SSM) of the European Central Bank (ECB) to implement Reward plan for consistent borrowers.
In the interview given by the Minister of Finance, Mr. Makis Keravnos to “K”, he clarified that each bank will implement its own reward mechanisms for consistent borrowers. Thus, as he had said, in conjunction with the supervisors, each bank will proceed with moves that suit its own model.
It is noted that the ECB base rate has been set at 4%, the deposit rate at 3.5% and the marginal funding rate at 4.25%.
What is the Plan< /h3>
But what is the Reward Plan that the Bank of Cyprus will give around 400 million points at the end of the year to consistent mortgage borrowers and which correspond to 4 million euros? According to information available on the Bank's website, every 100 points collected corresponds to a 1 euro reward. “The reward Scheme rewards daily transactions with Bank of Cyprus cards with points, in 250 businesses and over 900 points throughout Cyprus. You collect points and can redeem them on your future purchases at businesses participating in the Scheme. In addition, in addition to points, by making transactions in businesses of the Scheme, you have the opportunity to claim unique life experiences, such as trips, festivals, concerts and top sports events in Cyprus and abroad”, it is noted.