Cyprus banks have work to do

Cyprus banks have work to do

Cyprus banks have made progress, but more must be done for them to be on a par with other banks in the European Union and at their current level of development, according to a report by the Single Supervisory Mechanism (SSM) of the European Central Bank.

In contrast to the banks involved in the 2013 banking crisis, they have made advancements over the past 10 years, though it turns out that they still face issues. According to data provided by the SSM, Cypriot banks have a very low return on equity (ROE), a high cost-to-income ratio, and a nonperforming loan ratio that, in spite of significant progress made through sales, write-offs, and conventional reduction methods, continues to be the highest among all EU states.

At just 0.32%, Cyprus has one of the lowest ROE rates among all countries, according to SSM data for the third quarter of 2022. Only Malta, with a negative ROE of 1.36%, is lower than Cyprus. Banks from 16 other nations demonstrate superior competency in the index that measures how effectively Cypriot banks are using their capital to generate profits. 

The cost ratio of the Cypriot banks is the worst of any state in the EU, at 84.7% in Q3 of 2022.

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