In August, Cyprus' banking sector saw a modest decline in non-performing loans (NPLs), with a decrease of €16 million, bringing the total down to €2.089 billion from €2.105 billion in July, as indicated by the data released by the Central Bank of Cyprus (CBC).

The CBC reports that the total volume of loans increased by €70 million, reaching €24.396 billion in August, up from €24.326 billion in the preceding month. Consequently, the NPL ratio to the total loans experienced a slight improvement, shifting to 8.6% from 8.7%.

Loans that were overdue by more than 90 days were slightly higher in August, totaling €1.665 billion compared to €1.663 billion in July, and constituted 6.8% of the total loan portfolio.

The banking system's accumulated provisions in August experienced a minor increase to €1.205 billion from €1.197 billion the month before. Of these provisions, €1.097 billion were specifically for covering NPLs. The coverage ratio for these loans in August was reported at 52.5% by the CBC.

There was also a reduction in total restructured facilities by €37 million, with restructured loans decreasing to €1.920 billion from €1.957 billion in July, representing 7.9% of the total loan amount. Moreover, the volume of restructured loans that still qualified as non-performing dropped to €941 million from €946 million in the previous month.

Corporate NPLs accounted for €867 million in August, making up 7.3% of total corporate loans, with provisions covering 68.6% of these NPLs, the CBC notes.

Household NPLs stood at €1.18 billion in August, constituting 11.1% of the total household loan sector. The provision coverage for these NPLs was calculated at 39.7%.