Problem loans in the construction sector remains very high, despite the various incentives given to investors, ranging from granting Cypriot citizenship to foreigners, licensing the construction of high-rises, and increased movement in the real estate market.
According to the latest data from the Central Bank, at the end of the first quarter of 2018, non-performing loans in the construction sector amounted to €2.93 billion — or 66% of total loans of €4.45 billion in loans. That means that two out of three loans in the construction sector were non-performing.
The tourism sector is at the opposite end of the spectrum: non-performing loans for hotels and restaurants have declined significantly in the past months. They fell to €611 million overall in the end of the first quarter of 2018 and now make up 32% of loans in the industry.
Non-performing loans overall, recorded a decrease of €653 million and amounted to €19.91 billion at the end of the first quarter of 2018.
The coverage ratio rose to 48.5% at the end of March 2018 from 46.8% in December 2017. Problem loans for households amount to €10 billion out of total borrowings of €20.13 billion. Companies hold problem loans amount of €8.65 billion out of total borrowings of €17.88 billion.