A further drop of €17 million was recorded in total non-performing loans in October 2020 compared to the end of September 2020.
According to an announcement by the Central Bank of Cyprus (CBC), total lending increased from € 29,992 million at the end of September 2020 to € 30,120 million at the end of October 2020, showing an increase of € 128 million.
As a result, the ratio of non-performing loans to total loans decreased from 21.1% at the end of September 2020 compared to 20.9% at the end of October 2020. The coverage ratio reached 53.9% at the end of October compared to 53.1% at the end of September 2020.
Total loans restructured by the end of October 2020 amount to € 4,051 compared to € 4,096 million at the end of September 2020 of which € 2,916 million continue to be classified as NPLs.
It should be noted that credit institutions apply the definition of NPLs adopted by the European Banking Authority. Based on this definition, when an NPL is restructured it is not immediately reclassified as a performing facility but remains under observation within the NPL category for a further period of at least 12 months, even if the borrower strictly adheres to the new agreed repayment schedule. Therefore, according to the relevant definition, a part of the restructured loans remains non-performing, even if the borrower adheres to the new repayment schedule.