**Loans Managed Outside Cyprus Banking System Rise by €256 Million**
The Central Bank of Cyprus (CBC) has reported a notable increase in the value of loans managed outside the country's banking system, which rose by €256 million in the first quarter of 2026. This growth is primarily attributed to rising balances in household and business loans, reflecting broader trends in the financial landscape of Cyprus.
As of March 31, 2026, the total value of loans managed by Credit Acquiring Companies and Credit Servicing Companies reached €19.61 billion, marking a 1.3% increase from €19.35 billion at the end of 2025. This upward trend indicates a significant shift in the management of loans, with the CBC highlighting that both households and non-financial corporations contributed to this growth.
Specifically, household loans under management totaled €9.67 billion, which includes €662 million classified as performing loans and a substantial €9.01 billion categorized as non-performing loans. These loans are associated with a total of 55,044 households, indicating a widespread impact on personal finances across the region.
In parallel, loans extended to non-financial corporations amounted to €9.24 billion. Within this category, €403 million were performing loans, while the remaining €8.83 billion were non-performing. The loans to non-financial corporations relate to 9,261 entities, showcasing the significant role of businesses in the overall loan management landscape.
Despite the overall increase in loan balances, the CBC noted a concerning trend regarding non-performing loans. Both households and non-financial corporations experienced an uptick in non-performing loans compared to the end of December 2025. In contrast, performing loans in these categories saw a decline, suggesting that while more loans are being managed, the quality of those loans may be deteriorating.
On a more positive note, the category of other financial corporations demonstrated an improvement in loan performance. Performing loans in this sector increased to €15 million from €6 million at the end of 2025. Meanwhile, non-performing loans in this category slightly decreased to €689 million from €691 million, indicating a modest recovery among these financial entities.
The CBC also provided insights into the net carrying amount of the managed loan portfolio, which stood at €2.84 billion as of the same date. This figure represents the value of loans as recorded on the balance sheets of Credit Acquiring Companies, adjusted for expected future cash flows and any impairment losses. In contrast, the contractual balance reflects the total outstanding principal owed by borrowers, inclusive of accrued interest, without accounting for potential recoveries or provisions.
The increase in loans managed outside the traditional banking system underscores a significant shift in how credit is being managed in Cyprus. As the financial landscape continues to evolve, stakeholders will be closely monitoring these trends to assess their implications for both households and businesses in the region.
The CBC's findings highlight the ongoing challenges and opportunities within Cyprus's financial sector, particularly in the context of non-performing loans and the overall health of the economy. As the country moves further into 2026, the management of these loans will be critical in shaping the future of financial stability and growth in Cyprus.