CYPRUS: NPLs down €944 mln in 3Q

Non-performing loans, the scourge of the island’s banking system with troubled mortgages accounting form just under half of all loans, fell EUR 944 mln or 4.2% in aggregate in the third quarter of 2017 from the end of June.

The biggest fall was EUR 498 mln in August, according to the Central Bank of Cyprus that refers to non performing facilities (NPFs).

Total facilities declined by EUR 1,256 mln from EUR 49,820 mln at end-June to EUR 48,564 mln at end-September. This resulted in a drop in the ratio of NPFs to total facilities from 45% at end-June to 44.2% at the end of September.

From end-December 2014 to the end of September 2017, the central bank has seen an overall decrease in NPFs of EUR 5.9 bln or 21.4%. The coverage ratio rose to 46.9% at end-September 2017 compared with 46.7% at the end of June 2017.

“Credit institutions continue their intensive efforts towards restructuring NPFs in cases where viable settlements are possible. At the same time, the success of some restructuring depends on the prospect of disposing the collateral within the specified time frame”, the central bank said.

There was a net reduction in restructured facilities of EUR 443 mln at the end of September compared with the end of June, due to increased repayments, write-offs, settlement of debt through swaps with immovable property and reclassifications out of the restructuring category.

By the end of the third quarter, out of the 20,856 accumulated applications for restructuring, agreements with borrowers had been concluded in 3,195 cases (14.6%), 17,814 cases (81.5%) had been carried forward to be examined in the next quarter while 847 cases (3.9%) had been rejected either by the bank or the borrower.