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Fewer restructurings, less income

July 8, 2019 at 9:19am
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Fewer restructuring of loans and less cash flow towards repayment of debts is the banking system’s state of play over the first quarter of 2019, according to Central Bank of Cyprus data.

The recently-released data shows that this quarter’s cumulative amount of restructured loans stood at €4.7 billion compared to €5.1 billion in the previous one. Loan restructuring over the third quarter of 2018 stood at €5.8 billion, while in the second quarter it was €7.7 billion.

However, after the restructuring of large business debt the situation now seems to be more complicated since pending non-performing loans are of less value and with peculiarities.

Because of this, banks seem to be more aggressive in swapping loans for  real estate considering that a total of 219 properties were acquired over the first quarter of 2019, compared to 149 in the fourth quarter of 2018, 129 in the third quarter and 85 in the second quarter.

Properties sold by banks over the first quarter of 2019 were mainly agricultural fields and plots of land. At the same time, total cash flow towards debt repayment fell to €1.03 billion in the first quarter of 2019 from €1.7 billion in the previous one.

Real estate debt swap in the first quarter of 2019 stood at 4.9% compared to 6.3% in the fourth quarter of 2018. And cash inflow from loans with no delays stood at €848 million in the first quarter of 2019 compared to €1.31 billion in the fourth quarter of 2018 and €1.02 billion in the third quarter of 2018. Cash inflow from loans with a delay of up to 30 days stood at €40 million in the first quarter of 2019, compared to €34 million in the fourth quarter of 2018 and €55 million in the third quarter of 2018.

Cash inflow from loans with a delay of 31 to 60 days was also on the rise. The total amount for the first quarter of 2019 was €20.69 million, compared to €11.95 million in the fourth quarter of 2018, and €11.79 million in the year’s third quarter. In the first quarter of 2018 this stood at €20.38 million.

Moreover, a significant drop in repayments of loans with a delay of 61 to 90 days was recorded. Cash inflow fell to €6.38 million in the first quarter of 2019 compared to €14.18 million in the fourth quarter of 2018 and €11.29 million in the first quarter of 2018.

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