Cypriot NPLs drop below €2 billion
Total nonperforming loans (NPLs) to Cypriot banks have dropped below 2 billion euros, specifically to €1.9 billion. At the end of 2017, NPLs amounted to an astounding €20.5 billion, and at their peak in 2014-2015, they had reached nearly €28 billion.
Since 2018, substantial sales of problematic loans from Cypriot banks to foreign investment funds have led to significant reductions in NPLs.
The first major reduction occurred in 2018 with the sale of cooperative banks and the historic sale of a large NPL package worth €2.8 billion by the Bank of Cyprus to Apollo.
Consequently, the €20.5 billion in NPLs was reduced to €10.2 billion by the end of 2018, followed by further decreases to €8.9 billion in 2019, €5.1 billion in 2020, €2.9 billion in 2021, €2.3 billion in 2022, and €1.89 billion in 2023.
The sale and write-off of loans over the years have come at a cost, leading to a booming secondary market for problematic loans. The investment funds that purchased these loans established credit buyback companies in Cyprus, which now handle nearly all the problematic loans.
