European Central Bank executive council member Benoit Coeure said on Tuesday that while Cyprus’ systemic banks were able to become part of the ECB’s single supervisory mechanism, the level of non-performing loans (NPL) together with the level of leveraging of its banks remained a concern.
“Looking forward, the successful completion of the comprehensive assessment should not be seen as the end of the efforts to put the banking sector in the best position to serve the Cypriot economy,” Coeure said at the Economist Conference in Nicosia. “Overcoming the legacy of the crisis requires further crucial steps. At more than half of the total loan portfolio, non-performing loans are the highest in the euro area, and among the highest following any recent banking crisis”.
He added that addressing the banks’ portfolio quality was “critical”.