Cyprus’ banking sector maintained stable indicators in May 2026. Despite a slight increase in total lending and improved provisioning coverage for problem loans, the share of non-performing loans (NPLs) remained at 1.6% for the second consecutive month.
Non-performing loans continue to decline
According to updated data from the Central Bank of Cyprus as of 31 May 2026, non-performing loans amounted to €830 million, unchanged from April. Compared with the end of 2025, when the figure stood at €839 million, there was a slight decrease. The decline is much more pronounced over the longer term. At the end of 2024, non-performing loans amounted to €1.541 billion, compared with €1.892 billion at the end of 2023, €2.290 billion at the end of 2022 and €2.964 billion at the end of 2021.
The NPL ratio, calculated according to the European Banking Authority (EBA) methodology and including loans and advances to central banks and credit institutions, remained at 1.6% in May. The same figure was recorded in April 2026 and at the end of 2025. By comparison, it stood at 2.3% in September 2025, 3.1% at the end of 2024, 3.7% at the end of 2023, 4.5% at the end of 2022 and 5.5% at the end of 2021.
Total loans in the banking sector increased to €51.753 billion in May, up from €51.035 billion a month earlier. However, lending remained below the €52.114 billion recorded at the end of December 2025. Loans overdue by more than 90 days amounted to €630 million in May, compared with €633 million in April and €647 million at the end of 2025. Their share remained at 1.2% for the third consecutive month. The figure stood at 1.9% in September 2025 and 2.4% at the end of 2024.
Banks increase coverage of non-performing loans
The provisioning coverage ratio for non-performing loans edged up to 63% at the end of May, compared with 62.9% in April and 62.1% at the end of December 2025. Total accumulated provisions reached €651 million, up from €650 million in April and €646 million in December 2025. Of this amount, €523 million was directly allocated to non-performing loans. By comparison, the figure stood at €522 million in April and €521 million in December 2025. The longer-term trend also points to an improvement in the quality of banking assets. The coverage ratio stood at 59.9% at the end of 2024, 50% at the end of 2023, 48% at the end of 2022 and 43.1% at the end of 2021.
Restructured loans amounted to €754 million in May, compared with €752 million in April. However, this represented a substantial decline from the €824 million recorded at the end of 2025. Of the restructured loans, €322 million continued to be classified as non-performing. The figure stood at €319 million in April and €323 million in December 2025. Restructured loans accounted for 1.5% of total lending in both April and May 2026, compared with 1.6% at the end of 2025. For comparison, the ratio stood at 2.7% at the end of 2024, 3.2% at the end of 2023, 5.3% at the end of 2022 and 6.5% at the end of 2021.
Business and SME lending
Among non-financial corporations, total loans amounted to €13.983 billion, of which €326 million were classified as non-performing. Loans overdue by more than 90 days reached €223 million, while restructured loans amounted to €465 million. Of the latter, €178 million continued to be classified as non-performing.
The NPL ratio among non-financial corporations stood at 2.3%, while the coverage ratio was 71.2%. Total accumulated provisions for this category amounted to €321 million, of which €232 million related to non-performing loans. Among small and medium-sized enterprises, total loans reached €8.757 billion, while non-performing loans amounted to €314 million. The NPL ratio remained at 3.6%, while the coverage ratio increased to 72%. Restructured loans amounted to €304 million, of which €173 million continued to be classified as non-performing.
Households have the highest NPL ratio
Among the main categories of borrowers, households continued to record the highest level of non-performing loans. Total household loans amounted to €10.815 billion, of which €472 million were non-performing. Loans overdue by more than 90 days amounted to €375 million, while restructured loans stood at €215 million. Of these, €121 million continued to be classified as non-performing.
The NPL ratio among households stood at 4.4%, while the coverage ratio was 55%. Total accumulated provisions reached €280 million, of which €260 million were allocated to non-performing loans. Among other financial corporations, total loans amounted to €2.808 billion, while non-performing loans stood at just €32 million. Their NPL ratio was 1.1%, while the coverage ratio reached 96.2% — the highest among all borrower categories.
As of the end of May 2026, no non-performing loans were recorded in the categories of central banks, credit institutions or general government. Overall, Central Bank of Cyprus statistics indicate that, following the sharp reduction in problem loans in previous years, the banking sector has entered a more stable period. With the NPL ratio at 1.6% and the coverage ratio at 63%, the quality of the loan portfolio remains significantly better than several years ago, although households and small and medium-sized enterprises continue to show higher shares of problem loans.