Insider Economy Household loans up to €6.2 billion in limbo

Household loans up to €6.2 billion in limbo

Up to €6.2 billion of loans by households in Cyprus could be in limbo, according to Cyprus Central Bank data released yesterday.

Apparently, these loans cannot come under the state-subsidised ‘Estia’ home scheme criteria since they include grants of over €1 million. As much as €3.2 billion of red loans are with  commercial bank and another €2.9 billion with KEDIPES (former Co-op bank).

Specifically, non-performing loans not included in ‘Estia’ scheme are €7.8 billion, of which €6.2 billion were taken out by households. Out of the €3.2 billion of mortgaged loans from commercial banks, €685 million are over €1 million. As for KEDIPES loans, these amount to €2.9 billion of which a total of €537.5 million are loans of over €1 million.

The figures were sent to the House Finance Committee which continued debate proposed amendments to foreclosures laws that opposition parties have tabled. These changes aim to slow down the foreclosure processes by banks.

In a letter, the Central Bank clearly objected to the proposed amendments, stressing that this would lead to a prolongation of the island’s auction process with an unpredictable completion time. This would set off risks to the island’s financial stability, such as:

-A negative impact on banks’ capital adequacy due to increased provisions

-Increased bank borrowing costs that will end up burdening customers

-A possible downgrading of the State’s credit worthiness

-A possible increase in capital needs in stress tests to be carried out by the ECB in 2020

-Creation of additional capital needs

-Failure to meet state commitments to the European Commission which were conditional for the approval of state support for the Cyprus Co-op bank

-Minimising the ability of KEDIPES to collect part of the €7 billion owed so as to repay the €3.5 billion of taxpayer’s money

The Finance Ministry as well as all banks have also expressed disagreement with the proposed changes, and assured that no foreclosure of a first residence by borrowers who meet the criteria of ‘Estia’ scheme will be carried out.

Debate on this burning issue will continue on Monday.

By Eleftheria Paizanou


Read More:

Top Stories

352 new cases of COVID-19, no deaths announced on Monday

The Health Ministry announced 352 new Coronavirus cases out of 40,891 PCR and rapid antigen tests on Monday, 8 March, taking confirmed infections to...

Where to get a rapid test on Tuesday, 9 March

Aiming at the continuous surveillance of the community and the workplaces, the free programmes of rapid antigen testing of the general population and employees...

SA Black pilot inspires women to reach for the sky

Refilwe Ledwaba is South Africa's first Black female helicopter pilot and today she's helping other young women to break the glass ceiling and take...

Germans welcome first re-opening stage as some businesses allowed to reopen

Germans joyfully welcomed the re-opening of its first businesses on Monday (March 8) after four months of lockdown. "I think it's wonderful. I think it's...

90% of complaints for sexual harassment come from public sector

The biggest number of complaints about sexual harassment at work has been submitted by women, Maria Stylianou Lottides, Commissioner for Administration and Human Rights,...


Squash soup

Ingredients: 1 kg pumpkin, cut into small cubes, approximately 5 cups 2 medium (400g) sweet potatoes, cut into cubes, approximately 2 ½ cups 1 chopped leek, only...


No visit to Cyprus is complete without enjoying the traditional meal of many small dishes known as ‘meze’. This large feast, which has been a...

Prawns with fried cheese, barley shaped pasta

Put the barley shaped pasta into a small pan with salted water, bring to a boil and when tender, drain. Peal the prawns leaving...

Salmon and shrimp sheftalies

Mix all ingredients for tabbouli in a bowl and keep to one side so flavours can combine. Prepare the sheftalies: wash and soak the casing...