While Cypriot banks proposed more restructuring solutions to borrowers in the second quarter of 2017 than expected by the supervisor in an attempt to reduce their delinquent loans, they failed expectations in all three remaining areas, the Central Bank of Cyprus said.
Banks presented their customers with proposals to restructure 21.08 per cent of their non-performing loans, against a target of 14.73 per cent of proposed sustainable solutions, the central bank said in a statement on its website on Wednesday.
The bank supervisor, which is already reconsidering the set of performance indicators as “the main purpose for which they had been set, is no longer fulfilled,” said that the percentage of sustainable solutions concluded was only 10.42 per cent, compared with a target of 15.13 per cent, “presenting a significant underperformance”.
Cypriot lenders were also unsuccessful in maintaining the share of restructured loans in arrears of less than eight days above 71.91 per cent, the central bank said. They did so only with 68.21 per cent.
They underperformed the most in the category of loans that presented arrears of 31 to 90 days at the beginning of the second quarter and at the end of it showed no arrears, it added. The target was 43.78 per cent, but actual realisation was 25.55 per cent.
The set of targets, introduced in 2015, aimed at helping banks step up their efforts to reduce their non-performing loans stock, currently around €22bn or 45 per cent of their portfolio. Three months ago, the central bank said that it would revise the benchmark indicators.
“The new framework will be implemented within 2018,” it said. “To this end, this is the last publication with the existing targets”.