NPLs continued quarterly decline in Q3

As of the end of September 2023, total Non-Performing Loans (NPLs) in the banking system further decreased to €2.02b, from €2.08b at the end of August. In comparison to the previous quarter ending in June, NPLs dropped by €95m.

According to the Central Bank of Cyprus, total loans decreased to €24.365b in September following a quarterly downward trend. NPLs amounted to €2.017m, with the NPL ratio decreasing to 8.3% compared to 8.7% in June 2023.

The NPL coverage ratio with impairment forecasts remained essentially stable at 50.3% at the end of September 2023, compared to 50.4% or €1.1b at the end of June 2023.

Loans with a delay of more than 90 days recorded a decrease of €80m, totaling €1.58b at the end of September, down from €1.66b at the end of August, representing 6.5% of total loans.

The ongoing decline in NPLs during the third quarter of 2023 is primarily attributed to loan write-offs carried out within the framework of restructuring. Successful loan repayments, including debt swap agreements with asset components (real estate), also contributed to the reduction, as well as loans that have been successfully restructured and reclassified as performing loans after the monitoring/surveillance period.

Total loans of Licensed Credit Institutions that underwent restructuring by the end of September 2023 amounted to €1.86b, down from €1.92b the previous month, representing 7.7% of total loans. Restructured loans still classified as non-performing decreased to €916m in September, compared to €950m in Q2.

Household NPLs in September decreased to €1.12b compared to €1.18b in August, constituting 10.6% of total household loans. The total provisions against household NPLs were set at 36.8%.

Corporate NPLs remained stable at €0.86b compared to the previous month, representing 7.2% of total business loans. The overall provisions for corporate NPLs reached 66.4%.