Cyprus Banking Sector Shows Further Progress in Reducing Non-Performing Loans

The volume of non-performing loans (NPLs) within the Cypriot banking system continued to improve, according to the latest report issued by the Central Bank of Cyprus (CBC), based on data as of November 30, 2025. The figures published by the CBC provide an overview of aggregate NPL indicators across the country’s entire banking sector.

By the end of November 2025, the NPL ratio—excluding exposures to central banks and other credit institutions—fell to 4.0 per cent. This represents a decrease from 4.2 per cent recorded at the end of October 2025. This particular metric measures loans and advances across the banking system while omitting exposures to central banks and credit institutions.

When applying the methodology used in the European Banking Authority Risk Dashboard, which incorporates loans and advances to central banks and credit institutions, the NPL ratio showed no monthly change. Under this broader calculation method, the ratio stood at 2.1 per cent at the end of November 2025, unchanged from the level registered at the end of October 2025.

The report also pointed to a minor decline in the coverage ratio of non-performing loans through provisions. Specifically, the coverage ratio decreased slightly to 70.4 per cent at the end of November 2025, compared with 70.7 per cent one month earlier.

Furthermore, the overall stock of restructured loans in Cyprus’ banking sector reached €1.10 billion by the end of November 2025. Of this amount, €0.50 billion of restructured loans remained classified as non-performing.

Overall, the figures highlight ongoing stabilisation within Cyprus’ banking industry, demonstrated by falling NPL ratios and consistently strong provisioning levels. The updated data offer a current view of key banking sector risk indicators, pointing to gradual improvements in asset quality even as loan restructuring activity continues to play a notable role.

By fLEXI tEAM