NPLs down by €122m to €22bn, CBC says

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By Stelios Orphanides

Non-performing loans in the Cypriot banking system fell in February by €122m to €22bn or 45.3 per cent in a month and by €1.9bn in a year, the Central Bank of Cyprus said.

Household and corporate non-performing loans fell by €113.1m and €13.5m in February compared to January to €11.4bn and €10.1bn respectively or to 54.9 per cent and 52.6 per cent of their respective total, the central bank said in a statement on its website on Tuesday. Total loans rose by €98.7m to €48.5bn. Outstanding corporate loans rose by €51.4m to €19.3bn while household loans fell by €150.6m to €20.7bn.

Banks, which increased their provisions for loan impairments in January by more than €2bn compared to the month before following the introduction of the international financial reporting standards 9 (IFRS9), raised them by additional €185.6m in February in a month to €11.8bn, the central bank said.

The amount of loans with more than 90 days in arrears fell in February by €122m in a month to €17.2bn, while that of the restructured facilities dropped by €61m to €12.bn, the bank supervisor said. The amount of restructured facilities deemed cured rose by €10.8m to €8.9bn. The cure ratio, i.e. the amount of restructured loans regularly serviced by borrowers compared to total restructured loans was 73.8 per cent.

Non-performing loans are deemed the most serious threat to Cyprus’s fragile banking system and economic recovery. The government plans to reduce bad loans by one third until the end of the year via the sale of the Cyprus Cooperative Bank’s healthy part and the creation of a bad bank.
Since December 2014, non-performing loans fell by €5.3bn accompanied by a €8.7bn drop in total lending while provisions rose by €2.9bn.

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About Author

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

  • Cydee

    One sentence sums-up the whole scenario ….’Outstanding corporate loans rose by €51.4m to €19.3bn while household loans fell by €150.6m to €20.7bn’…

    • Neroli

      All those developers need loans to build the skyscrapers!

      • Bob Ellis

        and they will hopefully be jumping off them in a few months. Rough calculation, 5000 passport properties being built or already available for 700 applicants. Thats 5billion in debt to get 1.4billion back. Cyprus economics 101. Why are the banks not selling the bankrupt hotels as investments ?

        • Neroli

          Who knows? ? But I’m going to vote you in to take over from Harris!

        • Eye on Cyprus

          Let’s hope that the politicians, lawyers and bank officials (who all profit from these schemes – either directly or indirectly) are waiting at ground level to soften the developers’ landings – no survivors!

  • CloudCatcher

    22 BILLION in NPL’s .. in a country of ONE MILLION people = 22,000 for every man, woman, and child!
    Outrageous!

    • Bob Ellis

      22bilion is a mythical figure, deemed acceptable by those ‘in charge’. The real figure, if you clear away the famcy accounting, smoke and BS is much, much higher. With a weight like that around our collective waist, how ling until we sink without a trace ?

      • CloudCatcher

        we will ‘sink’ when the EU Commissioners realise that our politicians promise everything, and intend doing practically nothing .. then they will ‘bin’ us!

  • almostbroke

    Not even a ‘drop in the ocean ‘ with regard to reduction of NPLs

  • Eye on Cyprus

    “Non-performing loans . . . fell in February by €122m to €22bn or 45.3 per cent in a month” ????
    I make that: ‘FELL BY 0.55% in a month’.
    It would be interesting to know how much of the vaunted €122m reduction was achieved at full value; rather than by reapportionment or write-off.

    • This simply means they have been re-negotiated. In 3 months they might be NPL’s again.

      • Eye on Cyprus

        That’s my thoughts too; or maybe sold on for substantial discount.

      • Evergreen

        yes.