Cyprus Mail

Georgiades says NPLs still a serious challenge

Finance Minister Harris Georgiades claimed on Monday that many of the government's economic reforms had been introduced

Finance minister Harris Georgiades said that while the Cypriot banks’ high stock of non-performing loans rate remains a serious challenge to the sector, customer confidence increases, which is reflected in more deposits, the Cyprus News Agency reported on Monday.

The improved liquidity in the banking sector allowed the drop of Bank of Cyprus outstanding emergency liquidity and the phasing out of government guarantees extended to the banks in 2011 to improve their liquidity, Georgiades, who was addressing members of the parliamentary finance committee, said according to the Cyprus News Agency.

Georgiades added that he does not expect that the state-owned Cooperative Central Bank, which has been bailed out with almost €1.7bn of taxpayer money since 2014, will need additional recapitalisation. In case the bank did need more capital, it could tap it via its planned Cyprus Stock Exchange listing and therefore the move should not be blocked, he said.

Akel, Cyprus’s communist party, has filed a motion to suspend the privatisation of the Cooperative Central Bank via three successive share issues at the exchange.

The Cooperative Central Bank’s non-performing loan ratio in June stood at 59.3 per cent, versus a national average of 49.4 per cent.

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