Saturday May 23, 2015 Search
Weather | Athens
14o C
09o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Cypriot banks saddled with massive bad loans

Banks in recession-hit Cyprus, reeling from a financial crisis, are struggling with nonperforming loans that make up nearly half their lending and are hampering efforts to finance a cash-starved economy.

The central bank says banks’ liquidity is sufficient to absorb NPLs up to a certain point, but fast action is needed as the figure is rising.

So the government, lenders and borrowers are seeking ways to reverse the trend without further damaging an economy forecast to contract by 8.7 percent in 2013 and another 3.9 percent this year.

The total of NPLs – defined as loans more than three months in arrears or rescheduled several times – stood at 23 billion euros at the end of September, according to the latest central bank figures.

That is well in excess of GDP that stands at only 17 billion euros, and represents 42.3 percent of total lending.

Fiona Mullen, a director at research consultancy Sapienta Economics Ltd, said they could soon reach 50 percent, before stabilizing later this year.

Central Bank Governor Panicos Demetriades (photo) has bluntly declared that management of NPLs and restructuring of loans in general present “the biggest challenge facing the banking sector in Cyprus.”

A big chunk of NPLs is owed by powerful Cypriot business groups – not only developers but also commercial conglomerates – who have been able to use creative accounting to avoid meeting their obligations.

A source at the central bank has said 6 billion euros, or 26 percent of NPLs, is owed by only 30 borrowers.

There is also the fact that, even if banks want to act, out-of-date legislation makes foreclosure a difficult and lengthy proposition.

[AFP]

ekathimerini.com , Tuesday February 4, 2014 (20:29)  
Hotel contracts with a ‘Greek default clause’
Listed firms have whisked away most of their cash reserves
Car sales drop a gear on VAT rate uncertainty
Bulk of loan requests comes from food service
Tsipras faces down radicals within SYRIZA over terms of deal
After a busy week of talks with European leaders aimed at securing support for a deal for Greece, Prime Minister Alexis Tsipras faces challenges on the home front amid tensions with SYRIZA o...
Police on standby after Roma dispute leaves one dead
Police in the western Athens district of Egaleo were on standby Saturday after a dispute between two Roma families left one person dead, another injured and two properties seriously damaged....
Inside News
SOCCER
Greece escapes soccer suspension, FIFA happy with changes
FIFA says it is satisfied with changes made to sporting law in Greece, and has dropped a threat to suspend the country from international competition. In a letter to the government dated May...
SOCCER
Four-goal Panathinaikos thrashes Asteras away
Panathinaikos thrashed Asteras at Tripoli to gain an early advantage in the race for a spot in next season’s Champions League qualifiers, as the Super League play-offs got under way on Wedne...
Inside Sports
ANALYSIS
Neither Grexit nor a dual currency will solve Greece’s problems
A Grexit or the introduction of a dual currency is not a solution to Greece’s problems. On the contrary, it would be a worst-case scenario for Greece in the short term. Only in the medium to...
COMMENTARY
First aid for the capital
The fact that the center of Athens exudes the stench of human waste is an undeniable truth, just like the fact that in late spring, one nostril smells blossoming bitter lemon trees while the...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Tsipras faces down radicals within SYRIZA over terms of deal
2. Police on standby after Roma dispute leaves one dead
3. Dog attacks seven people in Thessaloniki, including 13-year-old boy
4. Two children aged 4 removed from Roma camp after DNA tests
5. Ten suspects arrested over 2011 abduction
6. Eleven kilograms of heroin stopped from reaching Italy
more news
Today
This Week
1. Hotel contracts with a ‘Greek default clause’
2. Listed firms have whisked away most of their cash reserves
3. Neither Grexit nor a dual currency will solve Greece’s problems
4. First aid for the capital
5. Response to May 15 comment
6. New civil service assessment scheme focuses on rewards instead of punishment
Today
This Week
1. The Greek-German breakthrough that didn’t come
2. Conspiracy madness
3. Greece came close to not paying IMF
4. National self-awareness put to the test
5. Albanian demarche raises concerns about possible territorial claims over Greece
6. Greek endgame nears for Tsipras as bank collateral hits buffers
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2015, H KAΘHMEPINH All Rights Reserved.