**Cyprus Banking System Reports Decline in Non-Performing Loans**
The Central Bank of Cyprus (CBC) has released its latest figures indicating a slight decrease in non-performing loans (NPLs) within the country's banking sector. As of the end of April 2026, the total NPLs fell to €830 million, down from €835 million in March. Despite this decline, the overall NPL ratio remained steady at 1.6% of total lending.
According to the CBC report, total loans in the banking system amounted to €51.04 billion at the end of April, a decrease from €51.35 billion the previous month. Loans that were overdue by more than 90 days also saw a minor reduction, dropping to €633 million from €634 million in March. This category of overdue loans maintained a consistent share of 1.2% of total lending.
When compared to the end of 2025, the total non-performing loans decreased by €9 million from €839 million. The value of restructured loans also experienced a decline, falling to €752 million from €777 million in March and €824 million at the end of 2025. Notably, €319 million of these restructured loans continued to be classified as non-performing.
The CBC's report highlighted that the total accumulated provisions within the banking sector decreased to €650 million, down from €659 million in the previous month. Of this total, €522 million was allocated to cover non-performing loans, leading to a slight improvement in the coverage ratio for NPLs, which rose to 62.9% from 62.7% in March and 62.1% at the end of 2025.
A detailed analysis by institutional sector revealed that households continued to exhibit the highest ratio of non-performing loans in the banking system. Household lending reached €10.74 billion, with €473 million classified as non-performing, resulting in an NPL ratio of 4.4%. Additionally, loans from households that were overdue by more than 90 days totaled €377 million. Provisions set aside for household non-performing loans amounted to €260 million, yielding a coverage ratio of 55%.
In the non-financial corporations sector, total lending was reported at €13.66 billion, with non-performing loans totaling €326 million, corresponding to an NPL ratio of 2.4%. Provisions for non-performing corporate loans totaled €232 million, leading to a coverage ratio of 71.2%.
The small and medium-sized enterprise (SME) segment reported non-performing loans of €303 million out of a total lending figure of €8.47 billion. The NPL ratio for SMEs stood at 3.6%, which is notably higher than the overall banking sector average of 1.6%. Provisions for non-performing SME loans accounted for 71.7% of the total.
In the other financial corporations sector, non-performing loans amounted to €31 million against a total lending figure of €2.94 billion, resulting in an NPL ratio of 1%. This sector recorded the highest coverage ratio at 96%.
The latest data from the CBC reflects ongoing efforts within the Cypriot banking sector to manage and reduce non-performing loans, which have been a significant concern for financial stability. The slight decline in NPLs and improvements in coverage ratios may indicate a positive trend in the management of credit risk, although challenges remain, particularly in the household and SME segments.
As the banking sector continues to navigate these challenges, stakeholders will be closely monitoring future reports from the Central Bank of Cyprus for further insights into the health of the financial system.