Despite all the efforts of the island's government, Cyprus remains the leader in the EU in terms of the number of problem loans in the construction sector.
Thus, in the third quarter of 2021, the ratio of non-performing loans in the country's construction sector amounted to 48.8%. By the way, in the second quarter this figure was 49.4%, and in the first - 50.2%.
Greece traditionally took the second place in the rating, where in the third quarter of 2021 the ratio of non-performing loans in the construction sector stopped at 21% compared to 30.2% in the previous quarter.
The average non-performing loans ratio for the eurozone was 14.1% in the third quarter of 2021, compared with 9.4% in the previous quarter.
Cyprus has also risen to the first place in the European Union in terms of the number of problem loans in the real estate sector.
In the third quarter of 2021, their share increased to 25.3%. A quarter earlier, this figure was 28.6%.
The total volume of problem loans of Cypriot banks reached 6.9%, which is the second worst indicator among EU member states, after Greece (10.5%).
The problem loans include loans that are 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 left to issue new loans.