Non-performing loans (NPLs) in the Cyprus banking system rose to 47.66% of all loans at the end of August, from 46.94% in the previous month, according to data released by the Central Bank of Cyprus (CBC).
Loans to individuals and households regarded as NPLs rose, while ‘bad loans’ to businesses were reduced. The construction sector maintained the highest rate and at an increase too.
However, in real terms, the ‘bad loans’ portfolio was reduced by €55 mln to €27.90 bln from €27.95 bln in the previous month, due to the repayment of a total amount of €1.01 bln of loans in August, decreasing the total amount of loans to €58.54 bln from €59.56 bln in July.
Acciording to the new CBC definition, NPLs are regarded loans that remain unpaid for 90+days and not serviced regularly for six months after that.
Since June 2013, when CBC started to publish data on NPLs, the total loans fell by around €10 bln, from €68.62 bln to €58.54 at the end of August 2014.
The NPLs that have been restructured and remain classified as NPLs declined in August to 10.81% compared with 10.94% in July. After restructuring, 9.62% of those were removed from the NPLs classification.
Loans to businesses rose in August to €32.01 bln, of which 49.11% were classified as NPLs, compared with 49.54% in the previous month.
Loans to individuals and households amounted to €24.26 bln, of which 50.18% were NPLs, compared with 49.82% in the previous month.
With 73.16% of loans classified as NPLs compared to 72.62% in July, the construction sector continued to be the sector with the highest rate of NPLs. Total loans to the sector amounted to €7.50 bln in August, compared to €7.54 bln in June.
The NPLs in the property sector, which is the next big category in corporate loans, decreased to 56.95% of €4.45 bln total loans, compared with 55.92% in the previous month.
In relation to loans to individuals for purchase of immovable property, the total facilities amounted to €14.51 bln in August, with a percentage of 43.57% being classified as NPLs, compared with 43.14% in the previous month.
Consumer loans rose in July to €7.18 bln, of which 60.17% were NPLs, compared with 60% or €7.17 bln in June.
