The announcement of the Association
The key to reducing Non-Performing Loans is sustainable restructuring and not divestments, the Association for the Protection of Bank Borrowers (SYPRODAT) states in a statement.
Commenting on the European Commission's latest report on Cyprus, it characterizes positive, as it upgrades the Cypriot economy, while emphasizing that Cypriot banks have an adequate level of capitalization, high liquidity and their profitability is starting to recover. At the same time, it states that, although there is a significant reduction in NPLs, nevertheless (Cyprus) has one of the highest NPL rates in the EU.
SYPRODAT reports that the Commission notes that “vulnerabilities” remain in the NPLs and the foreclosure framework, which the report states that if functional and effective is “the key to encouraging” borrowers to restructure their loans, to address strategic defaulters, to further reduce NPL stocks and improve payment discipline in Cyprus.
In its announcement, SYPRODAT underlines that it disagrees with the narrative “that divestments help the economy”, noting that the opposite is happening.
Specifically, for Cyprus, the Association notes that there is no payment indiscipline, but a temporary difficulty for borrowers to pay their installments, due to the accuracy of goods, services and energy, combined with the continuous increase in interest rates. It also states that the Commission's report ignores the events of 2013, “the consequences of which continue to affect a significant number of borrowers to this day”, while pointing out that the poverty risk of the population in Cyprus exceeds 17%.
In addition, SYPRODAT notes that there are no strategic defaulters. “Let them finally explain to us specifically who they are and how they act strategically. We do not want to believe that they mean those who spend their reduced incomes today, to meet the survival needs of themselves and their families”, he says in his announcement, while on the other hand, he notes the great responsibility of the banks for the situation, “because of the irresponsible loans they made for many years”. the investment funds, armed with the threat of divestment, refuse to remove the overdrafts.
“The key to reducing NPLs is sustainable restructuring, in the sense given to it by the Directive and the Code of the Central Bank. If the banks and investment funds are serious about the restructuring, they will not need the divestitures”, while NPLs will be significantly reduced at a rapid pace and the Cyprus economy will benefit significantly, concludes SYPRODAT.
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