Filenews 24 January 2026 - by Theano Thiopoulou
Net loan portfolios are now maintained by banks, which are careful as if the positive data they have created overturns them.
The Central Bank of Cyprus presented the recent aggregated data on non-performing loans (NPLs) with a reference date of the end of October 2025 and through them the improved picture for the entire financial system emerges.
Non-performing loans in Cyprus have been low for consecutive months and are rapidly disappearing from bank balance sheets. Of course, the credit acquiring companies are trying to get the instalments of the problematic loans they bought, having made various compromises with customers. But to call a spade a spade, they bought them so cheaply, that they have a lot of room to come to terms with defaulting customers and cut part of the debt depending on the settlement that will be made.
The MEX ratio according to the methodology applied in the risk matrix of the European Banking Authority (EBA), i.e. including loans and advances to central banks and credit institutions, decreased to 2.1% at the end of October 2025, compared to 2.3% at the end of September 2025 and 17.8% at the end of December 2019. An important element of the analysis is that of the total non-performing loans worth €1.09 billion. Out of total loans of €50.92 billion, the problem loans of businesses are €541 million and households €520 million.
It is noteworthy that the downward trend of problem loans that are more than three months past due remains downward. This shows that loans that are in the "antechamber" of "red loans", i.e. they are moving in that grey zone that have exceeded 90 days of delay, are slightly reduced at the end of October compared to September and in recent years.
The index of total loans with a delay of more than 90 days at the end of the ten months of 2025 was 1.8% from 2.4% in 2024, 2.9% in 2023 and 14.7% in 2019. In this category, loans with a three-month arrears are €891 million. According to Central Bank data, the total loans that were restructured amounted to €1.06 billion of which those remaining in non-performing loans are €541 million, the accumulated provisions of €883 million.
The data of the countries with non-performing loans have changed from what we have known in recent years and the banks of the European south are performing well. The Risk Assessment Report of the European Banking Authority (EBA) highlights the different trends in the EU regarding the evolution of non-performing loans with the countries of southern Europe, including Cyprus, recording a steady de-escalation of the non-performing loans ratio.
In the report, the technocrats state that "countries that previously had comparatively high levels of non-performing loans, including Spain, Italy, Portugal, Greece and Cyprus, have reported further decreases in the volume of their non-performing loans, amounting to -11% in Greece and -21% in Cyprus. In contrast, some of the large countries with comparatively lower levels of non-performing loans in the past, such as France and Germany, reported increases of 2% and 12% respectively in non-performing loans (by €5 billion) compared to June 2024. Countries such as Austria, Belgium and Denmark reported a single-digit increase in non-performing loans, while Romania reported a much larger increase (+25%).
