NPLs down to 9.5% of total loans at end 2022

Non-performing loans decreased to 9.5% of total loans at the end of 2022, according to data released on Friday by the Central Bank of Cyprus (CBC). At the end of 2021, NPLs stood at 11% of the total loans.

At the end of 2022 total loans amounted to €24.4 billion, down from €27 billion at the end of 2021. Of these, €2.3 billion were non-performing, showing a decrease from the €2.9 billion outstanding as NPEs at end of 2021. In addition, loans amounting to €2.7 billion were restructured, constituting 11.2% of total loans, of which €1.01 billion remain non-performing.

According to CBC’s data, the total accumulated impairment provisions for all credit institutions amounted to €1.2 billion, with €1.1. billion relating to NPEs.

The coverage ratio on NPLs stood at 47,5% at the end of December 2022 compared with 42,7% at the end of 2021.

Of the total loans of €24.4 billion, €10.6 billion are loans to households and €12.05 billion loans to non-financial companies, of which €8.6 billion concern small and medium enterprises. The NPL rate for households stood at 12.1% and for non-financial companies at 8%, while for small and medium enterprises at 9.7%.

Compared to the previous quarter, which ended at the end of September 2022, there was a decrease of €423 million or 15.5% in total NPLs. In addition, total loans decreased by 5.7% from €25.8 billion at the end of September 2022, while the NPLs ratio to total loans decreased from 10.6% at the end of September 2022 to 9.5% at the end of December 2022.

The continuous downward trend in NPLs is attributed, by order of significance, to loan repayments, to positive migrations of loans which have been successfully restructured and reclassified as performing at the end of the probation period and to loan write-offs.