Cyprus' non-performing loans decline to €2.19 billion in April

In a promising turn of events for Cyprus' financial landscape, the country's non-performing loans recorded a significant drop in April. This article clarifies the key numbers by examining the causes of the decline and how it affects both households and non-financial corporations.

In a positive development for Cyprus' banking sector, the total amount of Non-Performing Loans (NPLs) saw a drop, reaching €2.19 billion in April. The NPL ratio, which measures NPLs against total loans, remained steady at 9 percent.

Data released by the Central Bank of Cyprus (CBC) revealed that the value of NPLs in April stood at €2.19 billion, showing a decrease from the previous month's €2.2 billion.

Simultaneously, the overall amount of loans also experienced a decline, totaling €24.33 billion in April compared to €24.43 billion in the previous month.

However, it's worth noting that the total amount of loans with a delay of more than 90 days remained stable at €1.73 billion, comprising 7.1 percent of the total loans.

The CBC further reported a decrease in the total value of restructured loans, which fell to €2.37 billion in April from the previous month's €2.43 billion. Of this, restructured loans amounting to €981 million continued to be classified as non-performing, compared to €991 million in the preceding month.

In April, the total provisions against NPLs slightly increased to €1.08 billion, compared to €1.07 billion in the previous month. This led to the coverage ratio of bad loans standing at 49.4 percent, showing an improvement from the 48.8 percent recorded earlier.

Upon closer examination of the NPLs, it was found that €1.23 billion, accounting for 56 percent, belonged to households, while €0.92 billion was attributed to non-financial corporations.

However, the scenario changes when looking at restructured loans. Corporate loans accounted for €1.57 billion, while restructured household loans amounted to €0.73 billion.

When it comes to provisions, corporate NPLs had a coverage ratio of 64.1 percent, whereas household NPLs had a lower coverage ratio of 37.3 percent.

Overall, these figures indicate a positive trend in Cyprus' non-performing loans, offering some relief to the country's banking system. The steady decrease in NPLs and the increasing coverage ratio of bad loans are encouraging signs for the economy and the financial sector.