Newsroom / CNA
Non-performing exposures (NPEs) in the Cyprus banking system jumped up by €1.5 billion in January, as International Financial Reporting Standard 9 entered in to force.
According to data published by the Central Bank of Cyprus, NPEs as of January 31 amounted to €22.11 billion compared to €20.57 bln at the end of December 2017. - recording an increase of 7.48%.
The NPE to total loans ratio reached 45.7% compared with 43.7% on December 31, 2017.
“The increase in total facilities, non-performing facilities and accumulated impairment (provisions) at 31 January 2018 is mainly due to the implementation of the new International Financial Reporting Standard (IFRS) 9 as from 1 January 2018,” the Central Bank said.
The IFRS 9 replaces IFRS 39 and requires banks to recognise impairment sooner and estimate lifetime expected losses against a wider spectrum of assets.
As result, accumulated impairment against NPEs increased to €11.65 billion from €9.63 bln.
As a percentage of NPEs accumulated impairments amounted to 52.7% compared with 46.8% in December 2017.
On January 31, total loans increased 2.82% to €48.41 billion from €47.08 billion, the CBC added.
Total restructured loans amounted to €12.08 billion from €11.82 bln.
Restructured facilities that are still classified as non-performing exposures amounted to €8.86 billion from €8.46 bln on 31 December 2017.
Under the European Banking Authority NPE definition, a restructured loan is classified as non-performing for a period of at least one year.