The Central Bank of Cyprus (CBC) released an updated report on the country’s non-performing loans (NPLs), showing that a further decline in the NPL ratio was recorded in July.

Based on the figures for non-performing exposures (NPEs) as of July 31, 2025, the ratio of NPEs to total loans fell to 5.5 per cent, down from 5.6 per cent at the end of June and 6.2 per cent at the end of 2024.

The total stock of NPLs stood at €1.44 billion, showing a small decline compared with the previous month’s figure of €1.46 billion, and a notable decrease on an annual basis.

At the same time, total loans increased slightly to €26.0 billion from €25.8 billion in June, a development that also contributed to the improvement of the ratio.

Loans with delays exceeding 90 days remained stable at €1.15 billion, representing 4.4 per cent of the total, indicating stabilisation in the quality of the loan portfolio.

Banks’ cumulative provisions amounted to €982 million, of which €895 million related to non-performing exposures.

Coverage of NPEs by provisions rose slightly to 62.2 per cent, compared with 62.0 per cent in June and 59.9 per cent at the end of 2024, showing that credit institutions maintain a high level of protection against potential losses.

The largest share of non-performing loans continues to be concentrated among households and small and medium-sized enterprises (SMEs).

In particular, households recorded an NPE ratio of 7.4 per cent, corresponding to an outstanding balance of €794 million out of total loans of €10.76 billion.

Non-financial corporations reported NPEs of €613 million, representing 4.7 per cent of their total loans, while among SMEs the rate rose to 7.1 per cent.

Regarding the course of restructured loans, a decrease was observed to €1.21 billion from €1.23 billion in June.

Of this amount, approximately €640 million, or more than half, remain classified as non-performing.

The CBC data show that the Cypriot banking sector continues to strengthen its loan quality and maintain robust buffers, while the downward trend in problem loans signals ongoing improvement in financial stability.