NPLs drop in July, reduction pace slows down

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By Stelios Orphanides

Non-performing loans in the Cypriot banking system dropped slightly in July as banks increasingly reduce their lending, allowing the ratio of bad loans to remain persistently high, an analysis of Central Bank of Cyprus data shows.

Total non-performing loans dropped last month by €37.9m to below €24.7bn, after falling by €687.4m the month before, the central bank said in a statement on its website on Tuesday. The drop was mainly on €50m decline in loans of large non-financial corporations which offset a €26m increase in bad loans of small and medium size enterprises.

The value of restructured loans dropped in July by €29.9m to €13.7bn while that of loans with 90 days past due dropped by €78.6m to €18.4bn. Following the completion of the first post-programme surveillance mission, the European Commission and the European Central Bank urged Cyprus to pursue loan restructurings more forcefully and step up the implementation of the foreclosure and insolvency legislation to reduce non-performing loans which continue to remain “very high”.

As total outstanding loans fell by €310.3m in a month to €49.6bn, the non-performing loan ratio in the system rose to 49.7 per cent in July from 49.4 per cent in June. Since December 2014, when the central bank introduced the current methodology to classify non-performing loans, their value dropped by more than €3.6bn, compared to a €7.6bn drop in total loans.

Total accumulated provisions in the banking system dropped by €77.4m in July to €9.3bn, reflecting an increased recovery of loans to corporations.

GENERAL
0 Attorney general suspends bond lawsuit

By Angelos Anastasiou

A private criminal lawsuit against the former Central Bank governor Athanasios Orphanides and former Laiki Bank strongman Andreas Vgenopoulos, among others, regarding a bond issue by the lender was suspended on

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