Thousands of mortgaged properties, 8,079 in number, with a market value of €974 million, which belong to 69,492 borrowers, are in the hands of credit acquiring companies (EEPs), being a parallel part of the financial system and the real estate market.
The data announced yesterday by the Central Bank show that the total amount of loans held by the Credit Acquiring Companies, based on the total contractual agreements, as of June 30, 2025 was €19.70 billion, of which €18.53 billion. were non-performing, 94% and only loans worth €1.16 billion. were normally served. Essentially, defaulters are outside the banking system, when in the banks' portfolios the value of non-performing loans is €1.5 billion.
The analysis of the data on credit acquiring companies shows that the distribution of loans between natural and legal persons is at the same level. At the end of June 2025, the outstanding amounts of loans to individuals are €9.49 billion, of which €9.25 billion were non-performing (93%) and only loans worth €690 million were serviced normally.
In legal entities, loan balances are €9.75 billion, of which €9.27 billion are problematic (95%) and loans worth €478 million are normally served. If we refer to the oldest available data, at the end of December 2024, the number of properties mortgaged by the EEPs was 8,119, lower than in June 2025, the number of borrowers was 71,853 reduced compared to this year and the market value of the properties was €1.02 billion. Credit acquiring companies (SPCs) have become an essential part of the Cypriot financial sector, as they play a catalytic role in the continuous effort of credit institutions to deleverage their balance sheets and improve the quality of their loan portfolio.
The SPDs are legal entities that are active in the redemption of credit facilities in the Republic of Cyprus and have been licensed by the Central Bank, in accordance with the provisions of the Laws of 2015 and 2018 on the purchase and sale of credit facilities and on related matters.
In order to ensure financial stability, the CBC oversees the SPD sector. On the part of the SPDs, it is necessary to implement targeted risk management strategies, as stated by the Central Bank, in order to strengthen the resilience of the sector against possible negative developments, especially taking into account the already increased geopolitical risks and the general instability in the markets and the global economy.
Credit acquiring companies, as the Central Bank often mentions in its reports, are particularly vulnerable in the real estate sector, both due to their direct exposure and the large concentration of loans secured by real estate. Although most of the lending on the balance sheets of the SPDs is already impaired, a significant part remains active and vulnerable to a possible deterioration in the macroeconomic environment. The course of prices in the real estate market directly determines the provisions and the value of collateral in the portfolios of SPDs.
In particular, their connection with the real estate market is mainly due to the fact that many of the loans they manage are secured by real estate acquired mainly through settlements with borrowers, which makes them vulnerable to possible price drops.
