Cyprus is the EU leader in state NPLs

Cyprus remained the country with the highest stock of nonperforming loans (assets) of the general government in 2020, according to data released by Eurostat, the statistical office of the European Union.

The ratio of NPLs to the country’s GDP stood at 28.3%, a far larger share compared with the other EU member-states. The statistical office of the EU points out that this large rate is explained by “a large transaction in 2018, whereby NPLs from a Cypriot public financial corporation (classified outside government) were transferred to a government unit.”

The three other EU member-states that recorded a share higher than 1% of GDP were Slovenia (2.2%), Portugal (1.5%) and Croatia (1.4%).

For Cyprus, Slovenia and Portugal, the majority of NPLs refer to loans of financial defeasance structures. In the case of Croatia, the figure mainly refers to the loans of a national development bank (classified inside the general government).

The Eurostat data cover the notable increase of guarantees provided in the EU’s 27 member-states in 2020, due to new government collateral programs in the context of the pandemic.