Cyprus Mail
Business Cyprus

New data swap to boost Cypriot lenders’ performance, Moody’s says

By Stelios Orphanides

The exchange of credit data between Artemis Bank Information Systems Ltd and the Cooperative Central Bank which started on October 2, may help Cypriot lenders improve their credit standards as well as restructure and collect non performing loans, ratings agency Moody’s Investors Service said.

“Under the new system, two separate databases held by banks and cooperatives will be pooled to form a complete credit registry,” Moody’s said in an email statement on Monday. “The registry will provide users with information on borrowers’ existing loan obligations and details such as whether the loans are performing, restructured or in arrears”.

Before the introduction of the new regime of data exchange, banks and cooperative saving banks had separate access which offered an incomplete picture of a borrower’s financial obligations, Moody’s statement said.

“We expect banks to make more progress than cooperatives in restructuring loans and increasing recoveries because of their more proactive culture and better trained staff, particularly at the Bank of Cyprus,” Moody’s said and added that it expects “the cooperatives to restructure loan volumes at a slower pace than the banks because they are less profit-oriented and have large exposures to loans for primary residences”.

While the average non-performing loan ratio at Cypriot lenders was 47 per cent of gross loans in June, at Bank of Cyprus, Hellenic Bank and the Cooperative Central Bank was between 51 per cent and 58 per cent, according to Moody’s.

 

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