Banking System Loan Restructuring Reaches All-Time High | Stockwatch


Loan restructurings in the Cypriot banking system reached nearly € 2 billion in the first ten months of 2021, marking the highest figure according to Central Bank of Cyprus (CBC) files which began in late 2014 .

According to CBC data, restructured loans at the end of October reached 1.98 billion euros, as banks accelerate loan restructurings after the end of the late 2020 payment holiday imposed due to the Covid pandemic. The Cypriot payment holiday was considered the largest in the euro area, affecting loans totaling 11.7 billion euros both in the banking system and in credit acquiring companies.

The vast majority of restructured loans concerned loans to businesses (up to and over 1 million euros) which at the end of October amounted to 1.7 billion euros, or 85% of the total restructurings, according to the reports. data from CBC.

By category, restructurings of loans to companies exceeding 1 million euros have the highest share with 1.5 billion euros, ie 74% of total restructurings. Home loans come in second with restructured loans for 188 million euros at the end of October, closely followed by business loans up to 1 million euros with restructurings for 187 million euros.

Restructuring of other loans amounted to 63 million euros while restructured consumer loans amounted to 29 million euros.

Business loans represent the majority of loans in the banking system, with outstanding business credit facilities at end-August 2021 (latest data) amounting to € 14.7 billion, or 52% of total loans, while that EUR 9.5 billion concerned small and medium-sized enterprises. large companies.

The Covid has accelerated restructuring

CBC data shows banks accelerated post-payment holiday restructuring following repeated calls by the central bank governor to commercial banks to address challenges facing households and businesses in due to the Covid pandemic.

Loan restructurings at the end of October 2021 show an increase of 162% compared to 2020 when renegotiated loans amounted to € 754.4m, while pre-Covid restructurings were even less.

In 2019, total loan restructurings amounted to € 576.5 million while the previous year was limited to € 324 million. In 2017, loan restructurings amounted to € 588 million, while in 2017 and 2016, loan restructurings exceeded € 1 billion, amounting respectively to € 1.28 billion and 1.27 billion euros.

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