Restructuring NPLs at Cooperatives “on track”

The process of restructuring non-performing loans (NPLs) in the Cooperative Credit Institutions is fully on track, according to senior banking sources.

The percentage of non-performing loans in the Cooperatives reached 52.62%, or about EUR 7 bln of the EUR 13.28 bln loan portfolio, based on provisional data for May issued by the Central Bank of Cyprus. In the same month, the proportion of restructured loans stood at 3.92%, or just EUR 520 mln. The banking source said that restructuring NPLs began on June 1, which the troika of international lenders (IMF, EC, ECB) stressed as a major element of the Cypriot bailout programme.

The government pumped in EUR 1.5 bln to rescue the Cooperatives sector and now controls a 99.5% stake, with the aim to restructure it and return it to normalcy, while also helping the consumers and the small businesses traditionally relying on Coops for funding.