Cyprus Is Leader Among EU Countries In Number of NPL In Real Estate Market

Кипр - лидер среди стран ЕС по числу просроченных ссуд в секторе недвижимости
1 July 2021 Liza Medvetskaya
2534

According to the European Banking Authority (EBA), in the first quarter of 2021, Cyprus had the largest number of NPLs in the construction sector among the EU countries.

According to the EBA, which was released on Tuesday, July 1, banks in Greece and Cyprus continue to occupy the leading positions among the EU member states in terms of the number of problem loans.

Thus, in the first quarter of 2021, the NPL ratio in the construction sector in Cyprus was 50.2%, which was the highest in Europe. Greece is in second place - 49.2%. The average for the euro area was 10.1%.

In addition, Cyprus ranked first in the European Union in terms of the number of problem loans in the real estate sector. In the first quarter of 2021, the ratio of non-performing loans to real estate in Cyprus rose to 29.8% from 29.1% in the previous quarter.

In terms of the total share of non-performing loans, in the banking system of Cyprus it was 10.9%, which is the second worst indicator among the EU member states, after Greece, where this indicator stood at 25.2%.

According to EBA experts, it should be expected that the index in 2021 will grow even more after the end of the moratorium on loan payments.

As you may know, problem loans include loans overdue for more than 90 days and classified as unsatisfactory, doubtful and hopeless. Usually, the European Central Bank forces banks that have a lot of problem loans to hold more capital, which ultimately slows down the economy, since banks have less funds to issue new loans.

In fact, non-performing loans are a persistent weakness in the Cyprus banking sector, although the state of affairs is predicted to gradually improve. Red loans continue to pose a risk to the stability of the island's financial system and remain the main obstacle to strengthening the banking sector.

Кипр - лидер среди стран ЕС по числу просроченных ссуд в секторе недвижимости

It is worth noting that the European Banking Authority (EBA) has also published a risk table summarizing the main vulnerabilities of the EU banking sector using quantitative risk indicators.

Thus, at the European level, the capital ratio CET1 increased to 15.6%, and the equity ratio increased to 7.6% from 1.9% in 2020. In Cyprus, the capital ratio at the end of March was above the EU average.

The financial leverage ratio (a measure of the ratio of an organization's debt to equity) decreased from 5.8% in the fourth quarter of 2020 to 5.6% in the first quarter of 2021 in the EU, while in Cyprus it was significantly higher than the average in Europe.

In terms of return on equity, Cyprus ranked second after Greece in terms of performance and fifth in terms of leverage ratio.

Loans under the corresponding suspension of the EBA declined further in the first quarter of 2021, reaching a total of around €203 billion in the EU, compared with €318 billion in the fourth quarter of 2020.

The share of second stage loans under the moratorium remained almost stable at 27.3%, while the NPL index rose significantly from 3.3% in the fourth quarter of 2020 to 3.9% in the first quarter of 2021.

For loans with an expired moratorium, the stage 2 index reached 23.7% (from 20.2% in the previous quarter), while the NPL index rose to 4.5% (from 4.0% in the previous quarter).

Source: stockwatch.com.cy
Photos: pixabay.com
No one has left a comment yet
Place qoute
New objects

House for sale

€ 1 950 000

House for sale

€ 1 050 000

House for rent

€ 1 700

Apartment for sale

€ 214 000

Apartment for sale

€ 178 000

Apartment for sale

€ 209 000

Apartment for sale

€ 174 000

Apartment for sale

€ 171 000

Apartment for sale

€ 143 000

Apartment for sale

€ 174 000
Компания «Dom Real Estate» Контакты:
Адрес: Limassol, Cyprus,
Телефон:+357 25 212 212, Электронная почта: info@dom.com.cy