Loan repayments drop as restructurings slow down

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By Stelios Orphanides

Loan repayments fell in the first two quarters of this year compared to previous quarters mainly on falling repayments of loans, which remained in arrears for over six months, the Central Bank of Cyprus said.

In April to June, bank customers paid a total of almost €1.3bn, which included €204.8m in loans in arrears for over 180 days, compared to €1.3bn and €209.8m in the first quarter respectively, the bank supervisor said in a document submitted to the Parliament, marked as confidential.

In October to December of 2016 total loan repayments, which also include debt-to-asset swaps, were €1.6bn and included €417m in 180 days-past-due loans, compared to €1.5bn and €236.5m the quarter before respectively, the central bank said.

In January to March last year total repayments were below €1.2bn and included €248m in loans that were in arrears for more than six months, the central bank said. In April to June loan repayments exceeded €1.4bn and included €352.6m in loans in arrears for over 180 days. In addition, the share of repayments of loans with no arrears at all rose in the second quarter to over 77 per cent of the total, from 74 per cent the quarter before, the data show. In the first quarter of 2016, the share of loan repayments with no arrears stood at 70 per cent and fell to 68 per cent in the second quarter. In the third and fourth quarter of last year the figure was 76 per cent and 65 per cent.

As banks are running out of delinquent large corporate loans (they stood at merely €1.3bn in May partly on past successful restructurings and a reclassification compared to initially €4.9bn in December 2014, out of a total of €10.6bn and €13.7bn respectively), and shift their attention to delinquent credit extended to households and small and medium size enterprises (SME), the amount of restructured facilities dropped in the second quarter, the central bank document showed. Total non-performing loans stood in May at €23bn and made up more than 46 per cent of total loans in the system, according to the latest public central bank data.

Total restructured facilities which stood at €10.9bn on March 31, fell to €10.7bn at the end of June, the central bank document submitted to the parliament said. The amount of restructured corporate facilities and household credit at the end of June stood at €5.1bn and €5.2bn, compared to below €5.3bn and over €5.3bn at the end of March.

The above figures apply to Bank of Cyprus, Cyprus Cooperative Bank, Hellenic Bank, Cyprus Development Bank, the Cypriot units of Eurobank, National Bank of Greece and Alpha Bank, Astrobank, Societé Generale, USB Bank and the state-owned House Financing Corporation.

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About Author

Stelios Orphanides is a journalist at CyprusBusinessMail.com. To contact Stelios Orphanides: [email protected]

  • Rory Keelan

    Always the way – the easier cases get dealt with first. After that, the going gets harder and harder.