Panayiotis Rougalas
Cases involving non-performing loans appear to be placing an increasing burden on Cyprus’ already strained court system, even as the net book value of all loans managed by credit-acquiring companies has fallen to €2.8 billion.
An analysis by Kathimerini of first-instance court rulings published on CyLaw found that 77 of the 988 decisions posted in 2025 involved a credit-acquiring company as one of the parties.
The judicial impact of these cases has taken on added importance because of the repeated changes made to the foreclosure framework in recent years.
That represents 7.8% of the sample, or roughly one in every 13 rulings.
The picture is even more pronounced in 2026. Of the 586 decisions examined between January and August, 98 involved a credit-acquiring company. That is 16.7%, or approximately one in six.
It should be noted that the latest legislative changes concerning non-performing loans further expanded borrowers’ right to seek legal recourse.
In absolute terms, the number of relevant decisions issued in the first eight months of 2026 has already exceeded the total identified for the whole of 2025.
The data does not mean that every one of these cases concerns a foreclosure, nor that they arose exclusively because of changes to the legislation. It does, however, reveal the growing judicial footprint of managing loan portfolios transferred out of the banking system in previous years.
Net book value stands at €2.84 billion
The figures become particularly significant when considered alongside the latest data on loans handled by credit-servicing companies.
As of March 31, 2026, the total contractual balance of loans under management stood at €19.607 billion, compared with €19.351 billion at the end of 2025.
Of that amount, €18.527 billion was classified as non-performing, representing 94.5% of all loans under management. At the end of 2025, non-performing loans stood at €18.223 billion, or 94.2%.
The picture is different, however, when the net book value of those portfolios is considered.
The net book value of all loans under management stood at €2.843 billion on March 31, 2026, up from €2.802 billion at the end of 2025.
The gap between the contractual balance and the net book value is important when measuring the true scale of the problem.
The contractual balance reflects the total claims as they have accumulated over time, while the net book value provides a different measure of the portfolios’ actual economic value.
## Legislative changes and the courts
The judicial impact of these cases has taken on added importance because of the repeated changes made in recent years to the rules governing foreclosures and the management of non-performing credit facilities.
Those changes expanded or altered the procedures through which debtors can challenge specific actions, with some of those disputes ultimately ending up in court.
Previous legislative amendments even provided for the creation of a specialised jurisdiction within the courts to speed up the examination of such cases.
Although Parliament approved the provision and incorporated it into law, the specialised jurisdiction has still not been established.
As a result, these disputes continue to be handled by the existing court system.
Civil and commercial cases take 580 days
The growing burden comes at a time when Cyprus continues to rank near the bottom of the European Union for the speed at which justice is delivered.
According to the EU Justice Scoreboard 2026, the estimated time needed to resolve civil and commercial disputes in Cyprus rose from about 520 days in 2023 to nearly 580 days in 2024.
That performance places Cyprus second from last among EU member states. For administrative proceedings, the corresponding figure is close to 800 days.
Despite satisfactory clearance rates for new cases, the accumulated backlog continues to undermine the system’s efficiency.
The problem also has an economic dimension. Delays in resolving civil and commercial disputes can leave capital tied up, restrict liquidity and make it harder to settle outstanding financial matters efficiently.
The EU Justice Scoreboard 2026 also shows that Cyprus remains last among member states in public spending on courts as a share of gross domestic product, despite a small increase in that figure.
Two sides of the same problem
The data ultimately highlights two parallel aspects of the same issue.
On one hand, Cyprus is still dealing with the stock of troubled private debt created largely during the previous financial crisis.
Although the contractual balance of non-performing loans under management remains at €18.5 billion, the net book value of all loans under management now stands at €2.843 billion.
On the other hand, resolving these cases has become a significant part of the courts’ workload.
Within the sample examined, the proportion of decisions involving credit-acquiring companies rose from 7.8% in 2025 to 16.7% during the first eight months of 2026.
These figures bring renewed attention to the provision already passed for a specialised court jurisdiction. Its purpose was precisely to accelerate the handling of these disputes—but it has yet to begin operating.
