BANKING

Major drop in Cypriot NPLs

Major drop in Cypriot NPLs

Nonperforming loans in the Cypriot credit system have now dropped to 2.3 billion euros, following the transaction between Hellenic Bank and Pimco for the sale of nonperforming exposures worth €720 million.

At end-December 2021, Cypriot NPLs had amounted to €3 billion, according to the latest figures published by the Central Bank of Cyprus.

The progress Cypriot lenders have recorded in the last few years has been remarkable. However, it has taken them an entire decade for them to shake off the bulk of more than €28 billion of bad loans.

The burden is now falling on servicers, which will have to streamline this volume of loans they have shouldered.

As the International Monetary Fund recorded in its latest post-bailout assessment completed at the end of March, banks may have shown significant progress in unloading their NPLs, but their resolution has been slow. According to the Fund, the streamlining of those NPLs, acquired by the servicers and the state company for asset management (KEDIPES), requires a more dynamic application of the existing instruments for tackling bad loans.