According to Director General`s Michalis Kammas message in the Association’s Annual Report for 2015-2016, the successful conclusion of the three-year macroeconomic adjustment program enables Cyprus to define its economic policy more autonomously, while it sends a message that Cyprus is back on track.

"This positive development is significant as it creates the circumstances which will attract foreign investments and will enhance new sectors of business activity, building on both our competitive advantages and on emerging opportunities”, he says.

He adds that in light of this, the exit from the macroeconomic adjustment program gives a further impetus to the efforts of the banks, which aim for a healthy economic environment where they will be better able to contribute towards the development of the country.

At the same time, he points out that the constantly evolving international scene does not leave any room for complacency in the management of the economy or in the implementation of measures for the protection of the banking system.

"Taking all these developments into account, we are cautiously optimistic as far as the future of the banking sector and the economy in 2016 are concerned. We hope that the government and the new Parliament will have a fruitful cooperation for the continuation of the necessary reforms and legislative changes in economy”, says Kammas.

As the economy is recovering, he also notes, both the modernization process and the institutional restructuring will have to continue more intensively in order for the economy to regain its path of sustainable growth.

The year 2015, according to the annual report, was marked by significant developments in the Cyprus banking system as well as the economy. It also notes that despite the recent progress however, the problem of non-performing loans has not been eliminated, and it can be seen that greater cooperation is required by everyone, including borrowers.

The Parliament has approved the legislation which relates to insolvency, foreclosures and the sale of loans, matters which directly affect the banking sector.

"Notwithstanding the Association’s views on particular aspects, we generally believe that these laws are effective tools, enabling banks to deal with difficult and sensitive matters, such as non-performing loans and loan restructurings”, Kammas points out. At the same time he reassures that the banks will not abuse the foreclosure tools for mortgaged residences.

He also adds that banks have effectively proceeded with the restructuring of non-performing loans and according to the Central Bank of Cyprus, there has been a significant progress in this respect.

Additionally, it is noted, the banks have continued their effort towards regrouping, through improving their internal organization and structure, as well as their balance sheets. In recognition of their efforts, foreign credit rating agencies have upgraded them.

Source: Famagusta Gazette