16 Apr 2017 Why are SME bad loans rising?

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Banks made good progress during 2016 in cutting bad loans. By the end of the year, the stricter category of non-performing exposures (NPEs) had fallen year on year by €3.1bn to €24.2bn, while non-performing loans (NPLs) on a more than 90 days past due (90+ DPD) basis had declined by an even larger €3.8bn. This produced an NPE ratio of 46.2% and an NPL ratio (90+ DPD) of 33.9%.

Under rules set by the Central Bank of Cyprus, banks are now implementing a range of measures to work out bad loans and prevent new ones from appearing. However, hidden behind this overall positive trend is something a little puzzling, namely that bad loans among small-and medium-sized enterprises (SMEs) have been rising. NPEs rose year on year in December by €812m to €9.97bn. Read full article here.

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