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Small drop in non-performing loans

Although non-performing loans had fallen by €180 million at the end of January compared to the previous month, as a percentage of total loans the figure remained the same at 47.2 per cent.

non-performing loansAT THE END of January 2017 non-performing loans stood at €23.66 billion; a fall of €180 million compared to €23.84 billion at the end of December 2016.

The number of non-performing loans recorded a drop in January this year compared to the last month of 2016, but remained the same as a percentage of total loans due to deleveraging, data released by the Central Bank shows.

According to the data, total non-performing facilities stood on January 31, 2017, at €23.66 billion compared to €23.84 billion on December 31, 2016. Total loans however were recorded at €50.13 billion compared to €50.53 billion which left bad loans as a percentage of total loans the same as the previous month at 47.2%.

Total restructured non-performing facilities were in at the end of January this year €13.38 billion compared to €13.45 billion at the end of December 2016. On a prospectively positive note however, €9.7 billion of those restructured at end January continued to be classified as non-performing compared to €9.76 billion in the previous month.

As a percentage of total loans restructured facilities increased marginally and were recorded at 26.7% on January 31 of this year compared to 26.6% in December 2016.

Households continued to hold the lead on both total loans and bad loans at the end of January, with total loans for households recorded at €21.56 billion and no performing facilities recorded at €12.06 billion. This makes household debt accounted for 55.9% of bad loans.

Small to medium enterprises (SMEs) had loans of €15.89 billion on January 31 2017 while their non performing facilities reached €9.72 billion. Bad loans to SME`s accounted for 61.2% of bad loans.

Total accumulated impairment provisions as of end January this year were at €9.69 billion or 41% of total non-performing facilities. In December total accumulated impairment provisions stood at €9.92 billion. Total provisions at end December 2015 stood at €10 billion and at end December 2014 at €8.97 billion.

– Cyprus News Agency

Readers' comments

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  • Janice says:

    Banks only have themselves to blame for unfair terms imposed on borrowers – often without their full understanding of the risks, and without borrower’s express agreement of important but often ‘hidden’ terms that heavily favoured the banks to the detriment of borrowers.

    Had the banks acknowledged their errors years ago, and compensated victims for the bank’s own crass stupidity, greed and incompetence, and applied more realistic and balanced terms, we may have seen the property market recover a lot more quickly. In so doing, banks could have returned to profitability well before now, thereby offsetting compensatory awards.

    The banks to this day continue down the already failed path of conflict and greed, making paltry ‘offers’ – failing to grasp even a basic understanding of the plight of their victims.

    It is basic mortgage economics that anything above 70% LTV loans presents a risk of default, especially 90%-100%. So 150% LTV, as some banks are proposing, are a complete nonsense.

  • Richard says:

    The conclusion I have long drawn is this situation will persist all the time a ‘usury’ mindset exists in the banks.

    I’ll leave people to Google ‘usury’ at their leisure – but it’s a term with a fascinating history and very appropriate to the recidivistic attitudes of management in the the de-regulated banking sector we’ve seen burgeon in the last 25-30 years.

    I base most things in life on the simple maxim; “most people are OK”. If most people are OK, crime is relatively low, society is generally responsible and all things function in an acceptable manner.

    When over half of your domestic housing loans and nearly two thirds of your SME commercial loans are in the tank – then what does that point to based on the paragraph above?

    PIMCO reports and E.U process intervention are all fine and dandy. However, if you have a problem that size on a tiny island with a tiny economy like the Republic – it means something simply wasn’t set up right (and with the right intentions) in the first place. The result being a huge mess. The Republic’s first job is to go and tackle that as their top priority.

    Where the architects of this huge mess? When can all of those affected by their bad attitude expect them to be brought to trial and metered out the appropriate punishment? Spain has. Iceland has. Time for Cyprus to do the same.

    Clearing up properly can’t happen until this is done.

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