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No dent in construction industry’s NPLs, despite high-rises and visas

July 12, 2018 at 11:04am
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Problem loans in the construction sector remains very high, despite the various incentives given to investors, ranging from granting Cypriot citizenship to foreigners, licensing the construction of high-rises, and increased movement in the real estate market.

According to the latest data from the Central Bank, at the end of the first quarter of 2018, non-performing loans in the construction sector amounted to €2.93 billion — or 66% of total loans of €4.45 billion in loans. That means that two out of three loans in the construction sector were non-performing.

The tourism sector is at the opposite end of the spectrum: non-performing loans for hotels and restaurants have declined significantly in the past months. They fell to €611 million overall in the end of the first quarter of 2018 and now make up 32% of loans in the industry.

Non-performing loans overall, recorded a decrease of €653 million and amounted to €19.91 billion at the end of the first quarter of 2018.

The coverage ratio rose to 48.5% at the end of March 2018 from 46.8% in December 2017. Problem loans for households amount to €10 billion out of total borrowings of €20.13 billion. Companies hold problem loans amount of €8.65 billion out of total borrowings of €17.88 billion.

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NPLs down by €653 million in first quarter 2018