The increase in delinquent loans in the first month of the year was mainly on a €1bn monthly increase in corporate non-performing loans to €10.2bn, a new peak since July, the central bank said in a statement on its website on Monday. Household non-performing loans rose by half as much to €11.5bn, the highest since August. Total loan facilities rose by €1.3bn in a month to €48.4bn.

The overall non-performing loans ratio in January was 45.7% compared to 47.5% a year before, reflecting a decrease by €1.8bn, the bank supervisor said.

In January, Cypriot banks increased their overall provisions for loan impairments in January by over €2bn compared to December to €11.7bn, an all-time high, the central bank said. The increase in provisions was broken down to a €1.2bn concerning corporate loans and €798.9m concerning household loans to €5.9bn and €5.5bn respectively.

“The increase in total facilities, non-performing facilities and accumulated impairment at 31 January 2018 is mainly due to the implementation of the new international financial reporting standard (IFRS) 9 as from 1 January 2018,” the central bank said.

The amount of loans with 90 days in arrears rose by €1.6bn in January compared to December to €17.3bn, the bank supervisor said. Total loan restructurings rose by €262.1m to €12.1bn while the amount of restructured loans regularly serviced by borrowers rose by €401.7m to €8.9bn.

The Cyprus Business Mail understands that with the introduction of the new financial reporting standards in January, one Cypriot bank recognised interest on its non-performing loans and increased its provisions by an equal amount resulting to a zero-net effect.

Source: Cyprus Mail