According to CBC data, restructured loans at the end of October rose to €1.98 billion as banks accelerated loan restructurings following the termination of the payment 'holiday' at the end of 2020 enforced due to the Covid-pandemic. The Cypriot payment 'holiday' was considered the broadest in the Euro area, affecting loans totaling €11.7 billion both in the banking system and the credit-acquiring companies.

The vast majority of restructured loans concerned corporate loans (both up to and over €1 million) which in end-October amounted to €1.7 billion or 85% of total restructurings, CBC data show.

By category, restructurings for corporate loans over €1 million had the highest share with €1.5 billion or 74% of total restructurings. Housing credit facilities marked the second highest with restructured loans amounting to €188 million by end-October, followed closely by corporate loans up to €1 million with restructurings amounting to €187 million.

Restructurings of other loans amounted to €63 million while restructured consumer loans amounted to €29 million.

Corporate loans comprise the majority of the loans in the banking system, with the outstanding volume of corporate credit facilities by end-August 2021 (latest data) amounting to €14.7 billion or 52% of total loans, while €9.5 billion were associated with small and medium-sized enterprises.

Covid accelerated restructurings

The CBC data show that banks accelerated restructurings after the payment 'holiday' following repeated calls by the Central Bank Governor to commercial banks in a bid to address the challenges facing both households and businesses due to the Covid pandemic.

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

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

Source: Knews