Banks are turning to households after almost exhausting restructuring possibilities with large corporate clients, as non-performing loans dropped by €210.9m in a month, to €23.9bn in November, the Central Bank of Cyprus said.
The drop in bad loans in November was also accompanied by a drop in 90 days past due loans, which fell by €221.2m, to €17.8bn, the Central Bank said in a statement on its website on Wednesday.
Both the non-performing loans and the 90 days past due loan figures are the lowest since the introduction of the current methodology, which provides for a minimum 12-month probation period for a restructured loan before it is re-classified as performing.
Non-performing loans accounted for 48 per cent of the banks’ portfolio in November.
The November figure is the lowest since December 2014, the month the current methodology was introduced.
Household non-performing loans dropped by €143.8m in November, to €12.2bn, exceeding the respective reduction in corporate bad loans for the first time, the Central Bank said. Corporate bad loans fell by €65.6m, to €11.3bn.
By November, banks restructured a total of €13.6bn, or almost 57 per cent of the total, the Central Bank said.
While companies already restructured €7.2bn, or 64 per cent, of their total debt, the amount of restructured loans of major corporations was €2.8bn, or 91 per cent, of the respective exposure in November.
Consequently, only 53 per cent of non-performing loans of small and medium size enterprises, or €4.4bn, underwent restructuring by November, the Central Bank said. In the case of households, total restructured loans amounted to €6bn and were less than half.
According to the Central Bank data, borrowers regularly serviced almost three fourths of total restructured loans in November. The accumulated loan impairments stood at €9.2bn in November or almost 39 per cent of total non-performing loans. Total loans rose by a €72.3m in November, to €49.7bn.