Georghadji, who was talking to lawmakers at parliament’s finance committee, said that the reduction in loan restructurings was partly on an increase in terminated loans which account for roughly half of non-performing loans, according to the CNA.

She added that the drop in the pace of loan restructurings was an indication that restructurings alone cannot tackle the problem, Georghadji said.

In July, non-performing loans stood at €22.4bn or 45% of total loans, according to the latest official figures. The amount of restructured loans was €12.7bn of which only €8.9bn was being regularly serviced. The amount of accumulated provisions of Cypriot lenders stood at €10.5bn.

The governor warned again of the vulnerabilities and shocks the Cypriot economy – which emerged in 2015 from a prolonged recession –, and the island’s banking sector face. The economy expanded last year a revised 3% and grew in the both the first and second quarter an annual 3.5% or more. The Central Bank of Cyprus’s earlier forecast for this year’s growth was 3.1%.

Shealso warned that while debating about the banking sector in the current presidential election campaign is fair, it could potentially “undermine everything we achieved so far,” the CNA reported.

Source: Cyprus Mail