Latest Headlines

Collateral gap at €15 billion

Figures presented to parliament today by the Governor of the Central Bank of Cyprus reveal that there is a shortfall of almost €15 billion in the value of collateral offered to secure loans.

collateral gapINFORMATION tabled in parliament today reveals details of the size of the problem with the balance sheets of the Cypriot banks.

Speaking at the House Institution Committee today the Governor of the Cyprus Central Bank Chrystalla Georghadji disclosed that €14.8 billion of total loans amounting to €60 billion are not covered by collateral.

Of this €14.8 billion collateral gap, €9.8 billion relates to non-performing loans:

  • Large companies – €4.7 billion
  • Individuals – €4.0 billion (of which €890 million relate to housing loans.)
  • Small & medium sized enterprises (SME) in the retail sector – €1.1 billion.

The remaining €5.0 billion collateral gap relates to performing loans, including:

  • Large companies – €2.3 billion.
  • Individual (housing loans) – €0.5 billion.
  • Individual (consumer loans) – €928 million.
  • SME – €430 million

The Governor assured MPs that the banks have made provisions to cover the gap noting that “We are slightly relieved from the fact that the provisions made by the banks in regard to non-performing loans, cover the amount for which there is no collateral”.

Banks have made provisions of €10.8 billion for non-performing loans, which amount to €29.2 billion in total.

Readers' comments

Comments on this article are no longer being accepted.

  • @Carol on 2015/01/23 at 7:46 pm – If the bank lent money to your developer without any form of collateral the liquidator should not be pursuing you to repay the company’s debts.

    I assume you’ve had a Title Search carried out by the Land Registry to check that the land on which the property you purchased was was built was not used as collateral?

  • Carol says:

    Our developer has gone into liquidation, he has guarantors who have no monies, the bank lend without collateral and the liquidator wants us to pay his debts do you think the banks have allowed for this.

  • MartynG says:

    Gap?

    More like a massive chasm!

  • Hector says:

    “The Governor assured MPs that the banks have made provisions to cover the gap noting that “We are slightly relieved from the fact that the provisions made by the banks in regard to non-performing loans, cover the amount for which there is no collateral”. Banks have made provisions of €10.8 billion for non-performing loans, which amount to €29.2 billion in total.”

    And that money is coming from?

  • The views expressed in readers' comments are not necessarily shared by the Cyprus Property News.

  • Text size

Back to top