Loan restructurings in the banking system reach an all-time high | Stockwatch

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Loan restructurings in the Cypriot banking system reached nearly €2 billion in the first ten months of 2021, marking the highest figure according to Central Bank of Cyprus (CBC) records which began in late 2014 .

According to CBC data, loans restructured at the end of October reached 1.98 billion euros, as banks accelerated loan restructurings following the end of the payment holiday imposed at the end of 2020 due to the Covid pandemic. The Cypriot payment holiday was considered the most extensive in the euro zone, affecting loans totaling 11.7 billion euros in both the banking system and credit acquisition companies.

The vast majority of loans restructured were corporate loans (up to 1 million euros and more) which, at the end of October, amounted to 1.7 billion euros, or 85% of total restructurings, according to CBC data.

By category, corporate loan restructurings above €1 million have the highest share with €1.5 billion or 74% of total restructurings. Housing credit facilities come second with restructured loans for 188 million euros at the end of October, closely followed by corporate loans up to 1 million euros with restructurings for 187 million euros.

Restructuring of other loans amounted to 63 million euros, while restructured consumer loans amounted to 29 million euros.

Corporate loans make up the majority of banking system loans, with outstanding corporate loan facilities at the end of August 2021 (latest data) amounting to €14.7 billion or 52% of total loans, while that EUR 9.5 billion concerns small and medium-sized enterprises. size companies.

Covid accelerates restructuring

CBC data shows banks accelerated restructuring after the payment holiday following repeated calls by the Central Bank Governor to commercial banks in a bid to address the challenges facing households and businesses in due to the Covid pandemic.

Loan restructurings at the end of October 2021 show a 162% increase compared to 2020 where renegotiated loans amounted to €754.4 million, while pre-Covid restructurings were even lower.

In 2019, total loan restructurings amounted to 576.5 million euros while the previous year was limited to 324 million euros. In 2017, loan restructurings amounted to €588 million, while in 2017 and 2016 loan restructurings exceeded €1 billion, amounting to €1.28 billion and €1.28 billion respectively. 1.27 billion euros.

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