The ratio of Non-Performing Loans (NPLs) in Cyprus decreased to 6.5%, equivalent to €1.6 billion, by the end of September 2024, down from 6.9% (€1.7 billion) at the end of June 2024, according to the Central Bank of Cyprus (CBC).

The coverage ratio of NPLs with loan loss provisions rose to 55.7% (€0.9 billion) in September 2024, compared to 55.0% (€0.9 billion) in June 2024.

The reduction in NPLs during the third quarter of 2024 was primarily driven by:

• Loan repayments, including debt-for-asset swaps (such as real estate).

• Successful loan restructurings, with loans returning to the performing category after a monitoring period.

• Loan write-offs, typically involving amounts already provisioned in the credit institutions' accounts or accounting adjustments for non-contractual write-offs.

• Household NPLs fell to €900 million in September 2024 (from €916 million in August), representing 8.5% of total household loans. Accumulated provisions for household NPLs amounted to 41.0% (€388 million). Total household loans stood at €10.57 billion.

• Corporate NPLs declined to €658 million (from €682 million in August), representing 5.5% of total corporate loans. Of these, €610 million were attributed to small and medium-sized enterprises (SMEs). Provisions for corporate NPLs reached 75.5% of total corporate NPLs. Total corporate loans amounted to €11.96 billion as of September 2024.

Restructured loans across licensed credit institutions reached €1.3 billion by the end of September 2024. Of this, €0.7 billion continued to be classified as NPLs.