NPLs drop in June to €22.4bn or 45% of total, CBC says

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By Stelios Orphanides

Non-performing loans in the Cypriot banking system fell in June by €610.2m in a month to €22.4bn, the lowest since the introduction of the current methodology, the Central Bank of Cyprus said.

The non-performing loans ratio in June fell to 45 per cent which was also the lowest since December 2014, when the European Banking Authority’s methodology was introduced, the Central Bank of Cyprus said. Compared to June 2016, the amount of non-performing loans fell by €2.3bn and compared to June 2015 by €4.6bn.

The drop in non-performing loans in the sixth month of the year was mainly on €441.9n monthly reduction in delinquent loans of non-financial corporations accompanied by a drop of €137.7m in household non-performing loans, the central bank said. Exposures with 90 days in arrears fell by €692.9m to €17.1bn with the overall credit falling by €38.7m to €49.8bn.

The amount of restructured facilities fell in June by €116.2m to €12.8bn compared to May while the amount of the restructured loans being serviced dropped by €203.7m to €8.9bn, the central bank said. As expected following the announcement of Bank of Cyprus and Hellenic Bank in August and September respectively to increase their provisioning levels, the total amount of provisions for loan impairments rose in June by €654.2m in a month to €10.5bn.

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About Author

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

  • AnalogMind

    Good news, right?

    • Rory Keelan

      Painfully slow – and remember, the easier cases get dealt with first. Most of the debt is probably not recoverable.

    • Not really, it just means they have been re negotiated that’s all. Now they are classed as performing for another 3 months. No money needs to be recovered to lower the NPL’s this way.

      • Barry White

        “……while the amount of the restructured loans being serviced dropped by €203.7m to €8.9bn….”

        The “3 month performing period” came to an end for the above € 203.7 million without payments. Impressive, at least a €240 increase for every man, woman, child and dog not being repaid in a month.

        Each month will be a new crop of debt shirkers as they reach the 90 day mark.

      • Pc

        No. Loans are classed as performing when the loans have been serviced for a full 12 months without fail after restructuring. The 3 months concerns when a loan is classed as defaulting.

        • But a re negotiated loan is not an NPL ? I believe it is removed from the list thus the statistics look favourable.

          • Pc

            It gets taken off the list after 12 months.

  • Cydee

    Methodology? Is that a witches’ potion?

  • Barry White

    The ECB is coming. The spokeswoman quoted in another article in the question and answer session laid out the problems – highest NPL’s after Greece or higher per capita, high numbers or can payers but who won’t pay, no legislation with teeth to deal with the above, little actual enforcement to collect.

    With interest rates rising next year, it will expose the game and cause tears and upsets.

    • Pc

      All the ECB can do is request an increase in the capital requirement for BoC, Hellenic, the COOP and RCB. Of course, that will cause protests by these companies’ shareholders. Perhaps that will help.

      • Barry White

        That, of course, assumes that the respective shareholders are willing to provide further cash funds. If not….. then it is back to the Bank of the Barber or joy, nationalise the lot and the taxpayers sink under the setting sun.

  • Jim

    Creative accounting can make a pigs ear look like a silk purse.
    The Laiki bank posted profits of over 50 million Euros, just weeks before the went bust.

  • Bob Ellis

    The detail of the decimal places shows how great the lies and BS are. In conclusion, the banks are still screwed, people are not paying what they owe and the economy cannot move forwards properly without 20% of the GDP coming from passport and residency sales.