Moody’s warning on non-performing loans in the Cypriot Banking sector

Moody’s bi-weekly Credit Outlook acknowledged the reduction of non-performing loans in Cyprus since 2013 and the efforts are taken for restructuration so far; however, it also underlined the need to keep the efforts and not to reduce the pace as this would affect reaching the committed targets from 2013.

Potential mergers and acquisitions apparently are playing an important role as is shifting the focus needed, from restructuration to retail as the restructured loan balance declined to its lowest since 2014. This could derive in further additional capital provisions which would erode the bank’s capital.