According to new data from the Central Bank of Cyprus, the volume of non-performing loans (NPLs) fell to €830 million by the end of April 2026, slightly below the March figure of €835 million. At the same time, the NPL ratio remained unchanged at 1.6% of the total loan portfolio, one of the lowest levels recorded in recent years.
The decline in non-performing loans is considered an important positive signal for the country's economy. A healthier banking system improves access to financing for households and businesses, which is particularly important amid the continued expansion of the construction sector, the real estate market and major investment projects across Cyprus.
Non-Performing Loans Continue to Decline
The total volume of loans in Cyprus' banking system stood at €51.04 billion at the end of April, compared with €51.35 billion a month earlier. Loans overdue by more than 90 days remained virtually unchanged, falling slightly from €634 million to €633 million. Their share of total lending remained at 1.2%.
Compared with the end of 2025, the volume of non-performing loans declined by a further €9 million, from €839 million to €830 million. Restructured loans also continued to decrease. Their total volume fell to €752 million, compared with €777 million in March and €824 million at the end of 2025. Of this amount, €319 million is still classified as non-performing.
Banks are also gradually strengthening their financial buffers. Total provisions for potential losses amounted to €650 million, compared with €659 million a month earlier. Of this amount, €522 million was allocated specifically to non-performing loans. As a result, the NPL coverage ratio increased to 62.9%, up from 62.7% in March and 62.1% at the end of 2025.
Households Remain the Most Vulnerable Borrowers
Despite the overall improvement, households continue to account for the highest level of non-performing debt. Total household lending amounts to €10.74 billion, of which €473 million consists of non-performing loans. This brings the household NPL ratio to 4.4%.
Loans overdue by more than 90 days total €377 million, while bank provisions for these loans amount to €260 million. The coverage ratio stands at 55%.
Experts note that household repayment capacity continues to be affected by the high cost of living, rising housing expenses and mortgage servicing costs, although the situation remains significantly more stable than in the aftermath of the banking crisis of the previous decade.
Businesses Show Greater Resilience
The corporate sector remains considerably more stable. Total lending to non-financial companies amounts to €13.66 billion, while non-performing loans stand at €326 million. Their share is 2.4%. Bank provisions cover 71.2% of these loans, which is considered a high level of protection.
Small and medium-sized enterprises have total loans of €8.47 billion, of which €303 million remain non-performing. The NPL ratio stands at 3.6%, above the average for the banking system. At the same time, banks have built provisions covering 71.7% of these loans.
The strongest position remains among other financial companies. With a loan portfolio of €2.94 billion, non-performing loans total just €31 million, representing only 1% of the portfolio. The coverage ratio reaches 96%, virtually offsetting potential risks.
What the New Figures Mean for Cyprus' Economy
The decline in non-performing loans reflects the continued recovery of Cyprus' banking sector following the large-scale balance sheet clean-up that took several years to complete. Improving loan portfolio quality creates more favourable conditions for issuing new loans, financing construction projects, supporting business growth and facilitating property purchases.
At the same time, banks continue to maintain a cautious lending policy, while the regulator closely monitors risks associated with the high cost of living, interest rates and the debt burden of certain categories of borrowers. Therefore, despite the positive trend, the quality of loan portfolios remains one of the key indicators of the country's financial stability.