Cyprus banking sector non-performing loan ratio remains stable in May 2026

The Central Bank of Cyprus (CBC) reported that the non-performing loan (NPL) ratio for the domestic banking sector remained steady at 1.6 percent as of May 31, 2026. This figure, calculated using the European Banking Authority's risk dashboard methodology, indicates that the sector's asset quality continues to perform better than the EU-wide average, which was recorded at 1.98 percent in March 2026.

In addition to the stable NPL ratio, the banking sector saw a marginal improvement in its loss-absorption capacity. The NPL coverage ratio, which represents the proportion of bad loans covered by specific provisions, rose slightly to 63.0 percent in May from 62.9 percent the previous month. Furthermore, total restructured loans in the system amounted to €800 million by the end of May, with €300 million of that total still classified under the category of non-performing loans.

These updated figures, published by the Central Bank on August 13, 2026, confirm that the financial stability metrics of the Cypriot banking sector remain resilient. The data reflects ongoing efforts by the authorities to monitor credit risks and maintain robust provision levels against potential future losses.