The Ministry of Finance has been left uneasy following warnings from the technocratic teams of international credit rating agencies regarding the unresolved issue of Cyprus’s €19 billion in non-performing loans (NPLs).

This large volume of non-performing exposures, which now sits outside the banking system, is being managed by credit-acquiring companies.

Representatives of the three major international rating agencies—the so-called “Big Three”: Moody’s, Fitch, and Standard & Poor’s (S&P)—visited Nicosia last week. They held lengthy meetings at the Ministry of Finance ahead of the release of their upcoming reports on Cyprus’s creditworthiness.

The evaluations from these agencies are expected to be published by the end of November.

According to information obtained by Brief, one of the key concerns raised by the agencies is that a significant volume of non-performing loans, although removed from the banks’ balance sheets, continues to weigh on the economy.

International experts highlighted the risks arising from this situation, noting that thousands of affected individuals and households with non-performing loans are clearly unable to repay their debts—mainly due to insufficient income.

Moreover, thousands of households are unable to access new credit, even for essential needs such as student loans or urgent health-related expenses.

Global institutions, including the International Monetary Fund (IMF), have described the high level of non-performing loans and household debt as a “silent threat” to the Cypriot economy.

The agencies estimate that the €19 billion in unresolved NPLs will continue to burden the country’s economic outlook.

The Ministry of Finance has also received numerous complaints from affected borrowers, particularly those with primary residences under mortgage, reporting unbearable pressure from credit-acquiring companies. These firms, according to the reports, often prefer the path of foreclosure rather than seeking debt restructuring or settlement solutions.

Regarding the banking sector, the international agencies observed that Cypriot banks remain profitable, adequately capitalized, and highly liquid, while reinstating their dividend policies.

However, the agencies cautioned that banks must closely monitor their high operational and labor costs and take steps to rationalize their expenditures in these areas.

Finally, the rating agencies noted the recent demand by the Cyprus Union of Bank Employees (ETYK) to raise the tax-free compensation threshold for voluntary exit schemes—from €200,000 to €250,000—did not go unnoticed during their review.