More than 65 % of Cyprus non-performing loans were past due for at least one year, and around 60 % of those were past due more than five years as of June 2019.
This is what a recently-released annual report by the European Banking Authority (EBA) shows. Similar figures were also recorded in Greece, Bulgaria and Hungary.
The report also showed that, within the EU, all but three countries have reported an improvement in their NPL ratio during the last year. And that some of the biggest declines were reported from those facing the highest NPL ratios.
Cyprus reported the biggest reduction, close to 13 percentage points, followed by Greece with six percentage points. Banks in Ireland, Portugal and Slovenia reported improvements of around three percentage points during the same period.
Dealing with NPLs and respective collateral might take longer in certain countries than in others. Besides other reasons, the liquidity of secondary markets for NPLs might also contribute to such differences, the report pointed out.
In June 2019 banks in the EU had allocated on average 89.6 % of the loans and advances, with the share being the highest in Greece (41 %) and Cyprus (31 %) followed by Portugal (9 %). This is broadly similar to what is reflected in NPL data.
Also the share of financial assets tends to be higher for those with rather subdued asset quality. The share of financial assets was the highest for banks in Cyprus (15 %), followed by Greece and Latvia (14 %).
Exposure to large corporations is comparatively high in larger banking sectors, such as in Germany, France and the United Kingdom. This is probably because of the fact that banks in these member states serve large corporations based there through commercial and investment banking.
Regarding consumer lending, its share is particularly high in Central and Eastern European countries. About 30% of loans in Cyprus are for small businesses, followed by real estate, home, consumer credit and other household ones.