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Cyprus NPL ratio second highest in EU

The Cyprus banks have the second highest Non-Performing Loan (NPL) ratio in the European Union after Greece, according to the European Banking Authority (EBA) ‘Risk Dashboard’.

Cyprus has second highest NPL ratio in EUTHE EUROPEAN Banking Authority’s (EBA) risk dashboard for the first quarter of 2019 shows that NPLs (90 days past due definition) in Cyprus’ three systemic banks amounted to 34.1% compared with the EU average of just 3.1% of total loans.

In absolute terms, bad loans amounted to €6.9 billion. Greece holds the top spot with an NPL ratio of 41.4% or €84.3 billion.  Portugal posted the third highest NPL rate with just 9.57% and Italy the fourth highest with 8.25%.

However, the EBA noted that NPLs continued their declining trend albeit at a slower pace in the first quarter of the year.

Cyprus NPL coverage ratio was however slightly above the EU average with 45.9% compared with 45.1%.

Cyprus banking system capital ratios were below the EU average in Q1 2019. The CET1 capital ratio for the Cypriot banks amounted to 13.7%, compared with the EU average of 14.7%, while total capital ratio reached 17.4% compared with the EU average of 18.9%.

Cyprus’ ratio of Net Interest Income (NII) amounted to 2.16% compared with the EU average of 1.41%, while the Cypriot banks return on equity climbed to 13.6% compared with the EU average of 6.8%.

Furthermore, Cyprus posted the fifth highest NII to total operating income indicator which in Q1 amounted to 72.4% compared to the EU average of 59%.

According to EBA data, Cyprus posted the fifth highest cost-to-income ratio which amounted to 70.8% compared with the EU average of just 6.63%.

Cyprus’ loan to deposit ratio amounted to 60.1% compared with the EU average of 116%.

Moreover, Cyprus continues to post high liquidity ratios, recording the third highest Liquidity Coverage Ratio (LCR) with 326% compared with the EU average of 153%.

Further reading

EBA Risk Dashboard Q1 2019

Readers' comments

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  • Richard says:

    As the article references the E.U and Portugal – it’s worth noting that the E.C.B just hired Christine Lagard as their new CEO – a woman who ‘gave’ €400m to Bernard Tapie (an entrepreneur and asset stripper) and escaped jail despite being convicted of fraud.

    Lloyds Bank is run by a Portuguese CEO (Antonio Horta-Osario) who has hit the news unfavourably yet again defending obscene pay outs and bonuses despite Lloyds being connected to: PPI scam (2005). Links to arms trade (2008). Tax evasion via it’s offshore division in Jersey (2009). Losses in banking shares to the British public via George Osborne’s sell off (2013). Retail conduct failings (2013). Libor rate manipulations (2014).

    With such senior ‘lumenaries’ in the financial sector – NPL’s are merely a symptom of what happens when a de-mutualised and largely deregulated banking industry goes feral. For root cause – you need to dig further & expose. But who will?

    And (of course) who picks up the cheque for their excesses? The public – no prizes awarded for guessing correctly there. #Spankthebanker

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