Cyprus banks see continued improvement in loan quality

The Cypriot banking sector experienced a further improvement in terms of the volume of non-performing loans across the system, according to a report from the Central Bank of Cyprus (CBC) with a reference date of November 30, 2025.

The data released by the CBC covered aggregate non-performing loan indicators for the entire Cyprus banking sector.

As of the end of November 2025, the non-performing loans ratio excluding central banks and credit institutions declined to 4.0 per cent, compared with 4.2 per cent at the end of October 2025.

This measure reflects loans and advances excluding exposures to central banks and credit institutions across the banking system.

Using the methodology applied in the European Banking Authority Risk Dashboard, which includes loans and advances to central banks and credit institutions, the NPL ratio remained unchanged month-on-month.

Under this broader definition, the NPL ratio stood at 2.1 per cent at the end of November 2025, the same level recorded at the end of October 2025.

The data also showed a slight easing in the coverage ratio of non-performing loans with provisions.

At the end of November 2025, the coverage ratio declined to 70.4 per cent, compared with 70.7 per cent at the end of October 2025.

In addition, the total balance of restructured loans across the Cyprus banking sector amounted to €1.10 billion at the end of November 2025.

Out of this total, €0.50 billion in restructured loans continued to be classified as non-performing.

The figures underline continued stabilisation in Cyprus’ banking sector, as reflected in declining NPL ratios and sustained levels of provisioning.

The updated data provide a snapshot of banking sector risk indicators, highlighting gradual improvements in asset quality while restructuring activity remains significant.