NPLs in the banking system down to 6.5% or €1.6 billion in Q3 2024

At the end of September 2024, the Non-Performing Loans (NPL) ratio decreased to 6.5% or €1.6 billion, from 6.9% or €1.7 billion at the end of June 2024, according to the Central Bank of Cyprus (CBC).

The coverage ratio of NPLs with provisions increased to 55.7% or €0.9 billion at the end of September 2024, compared to 55% or €0.9 billion at the end of June 2024.

The decrease in NPLs during the third quarter of 2024 is mainly attributed, in order of significance, according to the CBC, to loan repayments (including debt-to-asset swaps), to positive migrations of loans which have undergone successful restructurings and have now been reclassified as performing after the end of the surveillance/probation period and to loan write-offs, which take place either in the context of restructurings and usually, concern amounts that already form part of credit institutions’ loan loss provisions or to non-contractual as "accounting" set-offs made against amounts already provided.

Total restructured loans of Authorised Credit Institutions at end-September 2024 amounted to €1.3  billion, of which loans of €0.7 billion continue to be classified as NPLs.

According to CBC data, NPLs of households decreased in September 2024 to €900 million (from €916 million in August 2024) and represented 8.5% of total loans, with total accumulated provisions for household NPLs amounting to 41% of total household NPLs (€388 million).

The total household loans amounted to €10.57 billion.

NPLs of non-financial corporations decreased to €658 million (from €682 million in August 2024), or 5.5% of total loans, of which €610 million relate to NPLs of small and medium-sized enterprises (SMEs). The total accumulated provisions for corporate NPLs amounted to 75.5% of total corporate NPLs.

Corporate loans stood at €11.96 billion at the end of September 2024.

(Source: CNA)