Cyprus has seen a notable improvement in its non-performing loans (NPLs) situation, with a decrease.

Cyprus has seen a notable improvement in its non-performing loans (NPLs) situation, with a decrease of €83 million reported at the end of June. This decline brings the total NPLs in the local banking system down from €2.19 billion to €2.11 billion when compared to the previous month.

Data released by the Central Bank of Cyprus (CBC) reveals that the overall loans in the banking system also saw a reduction of €99 million during June, resulting in a total of €24.41 billion compared to the previous €24.51 billion. Consequently, the NPL ratio in relation to total loans stands at 8.7 percent, showing an improvement from the 8.9 percent recorded in the previous month.

Among the key statistics, loans with delays exceeding 90 days experienced a somewhat smaller decrease of €65 million, reaching a total of €1.66 billion at the end of June, compared to the €1.73 billion recorded in May. These loans constitute 6.8 percent of the total loans in Cyprus.

In terms of provisions made in the banking system, there was a marginal decrease in June, with €1.17 billion compared to €1.20 billion in the previous month. Of this, €1.06 billion was allocated to NPLs, resulting in a coverage ratio of 50.4 percent.

Additionally, restructured loans also saw a decrease of approximately €270 million, totaling €2.03 billion from the previous €2.29 billion, which represents 8.3 percent of the total loans. Restructured loans classified as non-performing also decreased slightly to €0.95 billion in June, down from €0.98 billion in the previous month.

Breaking it down by sector, non-performing business facilities amounted to €0.88 billion in June, a reduction from the €0.93 billion recorded the previous month, accounting for 8.3 percent of total business loans. Notably, the total provisions set aside for business NPLs reached an impressive 66.5 percent.

Restructured business loans that continue to be classified as non-performing decreased to €0.47 billion from the previous €0.48 billion.

For household loans, red loans amounted to €1.19 billion in June, down from €1.22 billion in the previous month, making up 11.2 percent of total household loans. The total provisions against household red loans were calculated at 37.5 percent.

Furthermore, restructured household loans that continue to be classified as non-performing stood at €0.45 billion in June, down from €0.46 billion in the previous month.

These figures indicate a positive trend in Cyprus' banking sector, with a notable reduction in non-performing loans across various categories, reflecting efforts to strengthen the financial stability of the country's banking system.

By fLEXI tEAM