By Stelios Orphanides
The amount of non-performing loans in the Cypriot banking system fell in October by €51.7m to €21.4bn compared to September and by €2.7bn in a year, the Central Bank of Cyprus said.
Compared to the month before, the drop in delinquent loans in October was mainly on a €26.5m reduction of corporate bad loans which was accompanied by a €25.8m drop in household non-performing loans, the central bank said in a statement on its website on Wednesday. The reduction over the preceding 12-month period was mainly on €1.7bn drop in corporate non-performing loans combined with a €1bn drop of those of households.
On the other hand, the amount of 90-days-past-due loans in October rose by €103.3m in a month to €16.6bn, indicating that the reduction of non-performing loans in recent years continues to face risks, the central bank said. Compared to October 2016, loans in arrears for more than three months dropped by €1.4bn.
The ratio of non-performing loans fell in October to 44.1 per cent, the lowest since the introduction of the current classification methodology in December 2014, which provides for a minimum 12-month probation period of restructured loans before they are classified as performing, the bank supervisor said. In October 2016, it stood at 48.5 per cent.
The amount of restructured facilities dropped by €73bn to €12.3bn in October in a month and €1.3bn in a year, the supervisory authority added. Also, the amount of restructured loans regularly serviced by borrowers dropped by €44m compared to September and by €1.5bn compared to October 2016.
The cure ratio, i.e. the percentage of restructured loans showing no arrears stood in October at 70.3 per cent, down by 4 percentage points in a year, the Central Bank of Cyprus added.
Total provisions in the banking system rose in October by €11.9m to €10.1bn compared to September and by €829.1m compared to October 2016, the central bank said. The ratio of total provisions for loan impairments to total non-performing loans stood at 47 per cent in October.