The Cyprus NPL (none performing loans) issue is a result of the 2013 financial crisis was an economic crisis in Cyprus that involved the exposure of the Cypriot banks to over-leveraged local property companies, the Greek Government debt crisis, the downgrading of the Cypriot government’s bond credit rating and ultimately the haircut of bank accounts with amounts over Eur. 100.000.
Cyprus NPL Reality
The systemic nature of the banks and overzealous borrowing from Cyprus business led to a disproportionate amount of NPLs being present with the banks. With the European Central Bank calling the Cyprus government to reduce existing levels of Cyprus NPLs in the coming years focusing on this will be very interesting.
The bank, on the one hand, would like the loans to be performing as agreed; whereas, on the other hand, the borrowers went from one difficulty to the next.
Local laws have been amended with an aim to allow for the sale of NPL portfolios as well as the auction of assets securing the loans and on the counter side, a whole lot of defence litigation is taking place.
I hope you enjoy reading about these interesting topics and let me know what you think!
Cease-Auction, Cyprus NPL
Cypriot NPL at 34.1% compared with the EU average of 3.1% of total loans. Why is the Cypriot parliament then passing laws to reduce effectivness of current legislative process and will the president revert the law for a second reading