Nonperforming loans in Cyprus recorded a decrease of 722 million euros, or 14.4%, in end-September compared with end-June 2021, according to data released by the Central Bank of Cyprus.
Total loans declined by €486 million, or 1.7%, from €28.39 billion at the end of June to €27.9 million at the end of September 2021. As a result, there was a decrease in the ratio of NPLs to total loans from 17.6% on June 30 to 15.4% on September 30.
The coverage ratio stood at 4.7% at the end of September 2021 compared with 46.8% at the end of June 2021. It must be noted that during the period between December 2014 and September 2021 there was an overall reduction in NPLs of €23 billion or 84.3%.
According to Cyprus’ central bank, the downward trend in NPLs exhibited in the third quarter of 2021 can be attributed, by order of significance, to the sale or transfer of loan portfolios to credit acquiring companies, to the positive migration of loans that have been successfully restructured and reclassified as performing (cured) at the end of the probation period and to the repayment of loans, including debt-to-asset swaps. Loan write-offs have also contributed significantly.