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Press Release – 07 / 08 / 2013


As thousands of British buyers of properties in Cyprus are taking on the banks before their claims are time-barred on 31/12/2013 Alpha Bank are beginning to settle claims to stem the tide

Following reports that more waves of claims against Alpha Bank Cyprus and a number of property developers are being prepared by Maxwell Alves Solicitors in the City of London, a number of borrowers advise that they have been approached by Alpha Bank with offers to write-off 20% from their liabilities.

“This is indeed welcome news,” commented George Kounis, the Consultant at Maxwell Alves leading on these claims. “Considering that Alpha Bank says it admits to no wrong doing, this seems quite a climb down.  It shows in our opinion that the determination and the unity of the borrowers will eventually win through.  We are only looking for a fair solution and Alpha Bank may find it less painful to agree on overall principles for settlement than to deal with each case piecemeal.

Thousands of Britons are realising that they may have been wronged and that there is EU legislation in place that protect consumers according to which their cases can be heard in London.   An initial action by 215 claimants was filed by Maxwell Alves at the High Court in London on 27/06/2013 and additional waves will be joined to the main action until all borrowers who wish to claim have been included.   This, however, has to be done before 31/12/2013 otherwise they may be out of time. Alpha Bank Cyprus is thought to hold over 70% of the €1.6 billion owed by UK residents to Cypriot Banks.

“We have been having discussions with the other Banks and we hope to reach in the next few weeks an amicable solution with them on the principles of reaching a settlement on individual cases.  If Alpha Bank is also willing to compromise this could be the beginning of the end of this long and sad affair,” said Kounis.

According to figures provided by the Central Bank of Cyprus it is estimated that 25% of Alpha Bank’s loan portfolio is borrowing by UK Residents mostly in Swiss Francs.  The CBC advises that over 33% of loans to Britons are in default but Maxwell Alves believes that the figure in reality must be much higher because Alpha Bank has been re-arranging these loans so that they are no longer seen as non-performing.

“You cannot escape from reality,” says George Kounis.  “These borrowers cannot afford these loans.  They were given at the peak of the market at what appeared to be extremely favourable terms only to see everything overturned and they are now paying a heavy price.  If they have a problem with the property in addition to the loan, they may have no choice but to lodge a claim against the bank and the developer involved or live with the consequences.  Alpha Bank on the other hand has done well out of this.  It has established itself in the Cyprus market, it has profited from the appreciation of the Swiss Franc against the Euro, it has profited by offering repayment free holidays, it has profited by hiking up interest rate margins and it has profited from lending to the developers.”

Considering the Swiss Franc appreciation alone was 40%, offering 20% back may be considered cynical.  “If they had offered this some years back, it may have worked,” says Kounis. “People could at least have sold their properties and cut their losses.  Now people are stuck with properties that have lost up to 70% of their value, if they can sell them, and loans that have swelled by 40%.  We consider that the Bank should have acted sooner.  Now they have to cover much heavier losses and there is little they can do about it.  They cannot take on all these borrowers.  There are thousands of borrowers and it could prove difficult for the Bank to recover the monies. Even if they get judgments against each and every one of them, if people do not have the money to pay, eventually the banks will have to accept the losses.  In any event, now that these borrowers know they can sue the banks in London, assuming they satisfy the legal criteria, their actions will have priority.  Hopefully, the banks, the developers and the borrowers can resolve this matter amicably and convert a no win situation to a win-win one.”

Maxwell Alves Solicitors:

Maxwell Alves specialises on Cyprus property matters. It is on the UK Trade and Investment’s panel of recommended advisers for inward investment as well as trusted advisor for UK companies exporting. Maxwell Alves is also on the Law Society’s Network of Lawyers for your Business.

Address:              75 Farringdon Road, Clerkenwell, London, EC1M 3JY, United Kingdom


Contact:  George Kounis