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NICOSIA, Sept. 22 (Xinhua) -- The total of non-performing loans held by all Cypriot banks decreased by a remarkable 9.6 percent in the first half of 2016, according to data released by the Central Bank of Cyprus (CBC) on Thursday.
CBC said in its latest updated release that non-performing loans dropped to 18.44 billion euros(20.69 billion U.S. dollars) at the end of June as restructuring picked pace.
Non-performing loans are the biggest problem Cypriot banks are faced with since Cyprus was pulled back from the brink of bankruptcy in a 10-billion-euro bailout in March, 2013, which involved a radical resolution of the overgrown banking system.
Non-performing loans soared to over 27 billion euros, or about 50 per cent of the total, immediately after the bailout as a result of a deep recession and unemployment which had reached an unprecedented 17 percent.
CBC said the decrease in non-performing loans was the result of increased payments as the economy picked up and returned to a healthy growth and unemployment fell to 11 percent, completion of loan restructuring, write-offs by the banks and the exchange of loans with immovable property.
"However, there is still a long road towards the resolution of the non-performing loans problem," said CBC's statement.
In its latest bulletin last week, Standard & Poor's rating agency raised Cyprus's credit worthiness by one notch, saying that non-performing loans is the main reason holding it back from assigning an investment grade rating to Cyprus.
An investment grade rating would mean no risk of defaulting on the sovereign debt and would much reduce the cost of borrowing by Cyprus from international markets.
CBC said the pace of restructuring is accelerating with almost 8,000 loans having been restructured in the second quarter of 2016 and 11,500 more restructuring requests (just over 56 per cent of the total) carried forward for restructuring in the next quarter. Enditem
