Insider Economy NPLs in the Cyprus banking system decline below €9 billion

NPLs in the Cyprus banking system decline below €9 billion

Non-performing loans (NPLs) in the Cypriot banking system declined to €8.97 billion in the end of 2019, with the NPL rate amounting to 27.9% of total loans.

According to data released by the Central Bank of Cyprus (CBC) NPLs in end-December 2019 marked a reduction of €561 million compared with end-September 2019 or 5.9%. Furthermore, the coverage ratio rose slightly to 53.5% from 52.4% in the end of September.

Moreover, since the end of 2014, NPLs in the Cyprus banking system marked a reduction of €18.4 billion or 67.2%, according to CBC data.

According to the CBC, total restructured loans at end-December 2019 amounted to €5.45 billion, of which €4 billion continue to be classified as non-performing, partly due to the definition of the European Banking Authority.

A net reduction in restructured facilities of €418 million has been exhibited at the end of December 2019 compared with end-September 2019.

“The downward trend in NPFs exhibited in the fourth quarter of 2019 can be attributed mainly to the rise in loan write-offs, which take place in the context of restructurings and usually concern amounts that already form part of credit institutions’ loan loss provisions,” the CBC said, adding that loan repayments, including debt-to-asset swaps, as well as positive migrations of loans which have been successfully restructured and reclassified as performing (cured) at the end of the probation period contributed to the decrease in NPFs.

“The analysis of additional data collected by the CBC with respect to fixed-term loans shows that there has been an improvement in the factors contributing to the reduction of NPLs,” the CBC said.

Total loans in the end of 2019 amounted to €32.12 marking a reduction of €924 million or 2.8% compared with end-September 2019.

(CNA)

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