NPLs fell by €3.86 billion in 2020

Non-performing loans (NPLs) in the Cyprus banking system dropped to €5.11 billion at the end of 2020; a fall of €3.86 billion compared to the same period of 2019, according to data published the Cyprus Central Bank.

The annual drop of 43% is attributed mainly to the sale of a NPL portfolio by the Bank of Cyprus (project Helix 2A €0.91 billion)), a €0.5 billion write-down by the Hellenic Bank and the sale of NPLs amounting to €0.32 billion by National Bank of Greece Cyprus bank.

In 2020 the number of new NPLs was small due to the debt repayment moratorium imposed by the Cypriot authorities from March until December 2020. This moratorium, which covered performing loans amounting to €11.7 billion, was part of the measures introduced by the government to help minimise the impact of the pandemic.

The Cyprus Central Bank reported that the ratio of NPLs to total loans at the end of 2020 was 17.7% compared with 27.9% at the end of 2019. The NPL coverage ratio stood at 46% at the end of 2020 compared with 53% at the end of 2019.

Loans arrears for 90 days had dropped to €3.93 billion at the end of 2020 down from €7.4 billion the previous year and accounted for 13.6% of total loans.

According to the CBC, NPLs in the Cyprus banking system have reduced by more than €22 billion since the end of 2014. The largest annual drop occurred in 2019, which resulted from the sale of the former state-owned Cooperative Cyprus Bank (CCB) to Hellenic Bank and the conversion of the CCB to an asset management company.

According to the Central Bank data, out of a total of €5.11 billion NPLs at the end of 2020, €2.75 billion (54%) were held by households and €2.13 billion (42%) were corporate NPLs, of which €1.8 billion were held by small and medium sized enterprises (SMEs).

The Cyprus central bank reported that provisions against household NPLs at the end of 2020 amounted to 42% while provisions for corporate NPLs amounted to 53%. Provisions for NPLs held by SMEs amounted to 57%.