The output drop of 5.4% last year, compared with 2.4% the previous before, “was less severe than expected,” EBRD added.

EBRD, which participated in Bank of Cyprus’ capital increase in August, owns just over 5% of the Cypriot lender’s share capital, making it the fourth biggest shareholder.

The report added the Cypriot economy “faces severe problems, not least in the banking sector where most lending has dried up and non-performing loans are around a staggering 50% of the total. There is more than usual uncertainty surrounding the 2015 forecast but we expect a bottoming out of the economy by then, with zero growth for the year.”

The London-based lender provides project financing for banks, industries and business and also works with publicly owned companies.

In May, the EBRD agreed to provide up to €700 million of financing to Cyprus over the next six years to help it weather the eurozone debt crisis.

Source: Cyprus Mail