A noticeable reduction in the volume of restructured loans has been recorded in the banking system of Cyprus. According to data from the Central Bank presented to Parliament, in the third quarter of 2025 the total volume of such loans decreased and continued the trend toward improving the financial sector.
How the indicators of restructured loans have changed
As of the end of September 2025, the total amount of all restructured loans stood at about 720 million euros. For comparison, several months earlier this figure exceeded 830 million euros.
Considering the total volume of lending to the economy, which reached almost 23 billion euros, the share of restructured loans amounted to approximately 3%. This is noticeably lower than in the second quarter of the same year, when the figure was closer to 4%. The majority of restructured loans were related to businesses. About two thirds of such loans belong to companies, while the remaining part relates to households.
Why the volume of restructurings is decreasing
Experts note that the decline in indicators is linked to several factors at once. Some restructured loans successfully returned to the category of performing loans after borrowers stabilized their payments.
Repayment of debts, write-offs, and the transfer of certain loans to specialized debt recovery units also influenced the statistics. All this indicates a gradual improvement of the banking sector and an increase in payment discipline.
Which banks showed the greatest changes
In most banks in the country, the volume of restructurings decreased. The exception was Bank of Cyprus, where the indicator rose slightly. This is linked to a revision of loan terms for businesses. After the merger of Eurobank with Hellenic Bank, consolidated data for the new banking group appeared for the first time. It is actively restructuring loans for both companies and private clients. In other financial institutions, including Alpha Bank and a number of international banks, the volume of loan revisions significantly declined, indicating an improvement in portfolio quality.
What this means for the economy
A reduction in the share of restructured and problematic loans is considered an important signal of economic stabilization. Banks gain more opportunities to issue new loans, and businesses gain access to financing. Analysts note that this is especially important against the backdrop of rising living costs, increasing interest rates, and active development of the real estate market. Improved banking indicators may help reduce financial risks and strengthen the country’s investment attractiveness.
Overall, experts expect the downward trend in problematic debt to continue in the coming years, especially if the Cyprus economy continues to demonstrate stable growth and a high level of employment.