At the end of September 2021, there was a decrease of € 722 million or 14,4% in total non-performing loans (NPLs) compared to the end of June 2021, according to data released on Friday by the Central Bank of Cyprus.
Total loans decreased from € 28.388 million at the end of June 2021 to € 27.902 million at the end of September 2021, showing a decrease of € 486 million or 1,7%. As a result, the ratio of non-performing loans to total loans decreased from 17,6% at the end of June 2021 to 15,4% at the end of September 2021. The coverage ratio rose to 45,7% at the end of September 2021 compared to 46,8 , 2021% at the end of June 31.12.2014. It is noted that during the period 30.09.2021-23 there was a total decline in non-performing loans of € 84,3 billion or XNUMX%.
According to the CBC, the downward trend in non-performing loans in the third quarter of 2021 is due, in order of importance, to the sale / transfer of loan portfolios to credit acquiring companies, to loans that have been successfully restructured and reinstated in the category of loans at the end of the monitoring period as well as loan repayments, including debt swap agreements with assets (real estate). Also, the reduction of non-performing loans was significantly contributed by the write-offs of loans made either in the context of restructuring and usually concern amounts for which there are precarious provisions in the accounts of credit institutions, or concern non-contractual or "accounting" write-offs against amounts already included. in the provisions aiming at the most representative representation of the loan portfolios.
The total loans restructured until the end of September 2021 amounted to € 3.911 million, of which € 2.085 million are still included in non-performing loans.
Of the total loans to banking institutions at the end of September, € 14.626 million relate to corporate loans, of which € 1.762 million are MEX. Regarding household loans, they amounted to € 2021 million at the end of September 11.130, of which € 2.187 million relate to MEX.
It is noted that in determining non-performing loans, credit institutions have an obligation to apply the definition adopted by the European Banking Authority, according to which when a non-performing loan is restructured it is not automatically transferred to non-performing loans but remains unattended in the category of non-performing loans. serviced loans for an additional period of at least 12 months, even if the borrower follows the newly agreed repayment schedule without delay. Therefore, according to the relevant definition, a part of the restructured loans remains non-performing even if the borrower adheres to the new repayment schedule.