Non-performing loans drop by Euros 5.6 billion due to sale of Cyprus Cooperative Bank

Non-performing exposures (NPEs) in the Cyprus banking system dropped to Euros 11.02 billion in September 2018 marking a Euros 5.6 billion reduction since end-June 2018 as Hellenic Bank acquired the performing part of the state-owned Cyprus Cooperative Bank, which has been converted to an asset management company.

According to data released by the Central Bank of Cyprus, total NPEs dropped from Euros 16.6 billion in end-June to Euros 11.02 billion marking the lowest level since the 2013 financial crisis. From the beginning of 2018 NPEs have dropped by Euros 10 billion.

The percentage of NPEs in the end of September 2018 amounted to 31.8% from 40,3% in end-June and 43% in the end of 2017, while accumulated provisions in the banking system amounted to 51.9% from 48.3% in end-June.

The downward trend in NPFs can be attributed mainly to the removal of loan portfolio from banking sector transferred to KEDIPES, the CBC said in press release. Following the sale of the performing operations of the CCB, to Hellenic, the CCB lost its banking license and has been renamed as Cooperative Asset Management Company establishing a subsidiary named Cyprus Asset Management Company (KEDIPES) which will wind down NPEs amounting to Euros 5.7 billion.

Furthermore, due to the removal of the CCB’ NPEs, households NPEs in end-September halved to Euros 5.32 billion corresponding to 48.3% of total NPEs, while corporate NPEs amounted to Euros 5.35 billion or 48.5% of total NPEs.

Total restructured facilities (NPFs) at end-September 2018 amounted to Euros 7.319 million, of which Euros 4.818 million continue to be classified as NPFs, the CBC said.

Source: Cyprus News Agency