As of September 2023's close, Cyprus' banking system reported a further decline in Non-Performing Loans (NPLs), totaling €2.02 billion. This figure marks a decrease from €2.08 billion at August's end. Compared to the quarter ending in June, there's a noticeable reduction of €95 million in NPLs.

The Central Bank's data shows a decrease in total loans to €24.365 billion, consistent with the observed quarterly downward trend. The NPL figure stood at €2.017 million, bringing the NPL ratio down to 8.3% from June 2023's 8.7%.

The NPL coverage ratio, which includes impairment forecasts, remained relatively unchanged at 50.3% by September's end, compared to 50.4%, or €1.1 billion, in June 2023.

Loans overdue by more than 90 days saw a decrease of €80 million, summing up to €1.58 billion at September's end, down from €1.66 billion at August's end. This represents 6.5% of the total loan portfolio.

The ongoing reduction in NPLs during 2023's third quarter is mainly due to loan write-offs executed as part of restructuring processes. Additionally, successful loan repayments, including debt swaps involving real estate, as well as loans restructured and reclassified as performing after a monitoring period, have contributed to this decrease.

By September 2023, the total restructured loans of Licensed Credit Institutions dropped to €1.86 billion from €1.92 billion the previous month, accounting for 7.7% of total loans. Of these, restructured loans still categorized as non-performing fell to €916 million in September, down from €950 million in the preceding quarter.

Household NPLs in September also decreased to €1.12 billion from August's €1.18 billion, making up 10.6% of total household loans. Provisions against these NPLs were set at 36.8%.

Corporate NPLs remained steady at €0.86 billion, representing 7.2% of total business loans, with the overall provisions for these NPLs reaching 66.4%.