Loans amounting to € 3.63 billion were restructured in 2020 (until the end of November), at a time when the installments were in force and banks were trying to find solutions for their weakest customers who could not cope after the expiration of moratorium. In 2019, the balance of loans restructured was € 5.45 billion, at the end of 2018 it was € 6.65 billion while the large volume of restructuring took place in 2014, when it was € 12.68 billion.
Most of the loans that the banks restructured until the end of November 2020 concerned households and the amount reached € 1.93 billion. The loans of the companies that underwent restructuring were € 1.52 billion, of which € 1.34 billion. concerned loans to small and medium-sized enterprises. Loans with a delay of more than 90 days were € 4.58 billion at the end of November and € 7.42 billion at the end of 2019. According to data announced by the Central Bank, non-performing loans decreased at the end of November by € 710 million. , falling to € 5.59 billion, from € 6.3 billion at the end of October. According to the Central Bank, the decrease in non-performing loans and consequently in total loans is mainly due to write-offs that either concern contractual or “accounting” write-offs.
In January 2021 it was announced that Bank of Cyprus reached an agreement with investment funds affiliated with Pimco, for the sale of an additional portfolio of non-performing loans, with a gross book value of € 545 million.
In recent years, due to the solutions implemented by banks, there has been a significant reduction in non-performing loans. The solutions applied by the banks are the sales, the sales of loans, the write-offs of loans against the acquisition of real estate, the restructurings, while the Hestia plan has also contributed in the direction of the reduction of problem loans. At the end of 2014, non-performing loans had reached € 27.32 billion but decreased by the end of November 2020 by € 21.73 billion.
The percentage of non-performing loans from its high of 47.8% in 2014 fell to 19.1% at the end of November but remains high, as the eurozone average is close to 3%.
In the background there is the idea of the Ministry of Finance to create a bad bank, to ease the balance sheets of the banks, in a tense atmosphere created by the pandemic. But at the same time, banks are selling troubled loans to clear their balance sheets, without waiting for a bad bank to be set up.
