NPLs continue to rise to 28 bln

€

Non-performing loans (NPLs) in the island’s fragile banking system rose by EUR 317 mln at the end of June, compared with the previous month, despite a reduction in the total amount of loans, according to data released by the Central Bank of Cyprus.

The reason for this lies in the definition of an NPL, whereby the Troika-rule imposed by the CBC is any loan that has not been serviced for 90 days, but even after payments resume, it remains an NPL for 6 month.

So, as at June 30, NPLs amounted to 46.5% or EUR 27.81 bln from a total loan amount of EUR 59.80 bln, compared with 45.55% or EUR 27.49 bln on May 31, when the total size of all loans was EUR 60.34 bln.

According to the new data released by the CBC, the NPLs in the commercial banking sector amounted in June to 44.65% or EUR 20.78 bln of all loans (EUR 46.54 bln), compared to 44.59% or EUR 20.51 bln in the previous month. NPLs in the Cooperative Sector in June amounted to EUR 7.03 bln or 53.02% of their total loans (EUR 13.26 bln), compared with EUR 6.98 bln or 52.62% in May.

Corporate loans in commercial banks amounted to EUR 29.15 bln in June, of which 49.62% were classified as NPLs, compared with 48.31% in the previous month.

Loans to individuals and households rose in June to EUR 13.96 bln, of which 45.22% were NPLs, compared with 44.70% in the previous month.

NPLs in the construction sector jumped to 72.05% of a total of EUR 7.15 bln, compared to 70.12% in May when the total loans were EUR 7.19 bln. NPLs in real estate amounted to 54.54% of a total of EUR 4.19 bln, compared with 52.52% in the previous month.

Most loans in the Cooperative sector were given to individuals and households, amounting in June to EUR 10.38 bln, of which 55.10% were non-performing, compared to 54.82% in May.

Cooperative loans for real estate amounted to EUR 5.11 bln in June, with 46.77% of them classified as NPLs, compared with 46.55% in the previous month.

Consumer loans amounted in June to EUR 4.29 bln, of which 62.93% were NPLs, compared to 62.64% in May.