THURSDAY, 26 NOV 2020

 

CONNECT

Facebook Linked In Twitter
GAP Vassilopoulos
GloriaJeans_266x90px
IMH LTD

Ursula von der Leyen: The First Europeans Could Be Vaccinated By The End Of The Year

Petrides: Our Goal Is A Cyprus Settlement And Not Sanctions Against Turkey

IMH LTD

ECONOMY

Moody’s: Cyprus' High Loan Payment Deferrals Reflects Strain On Economy

Moody’s: Cyprus' High Loan Payment Deferrals Reflects Strain On Economy

In their bi-weekly outlook report, Moody’s analysis on the payment deferrals for borrowers will reduce the probability of acute asset quality stress for banks this year, it still presents a high percentage that asset quality deterioration will very likely happen next year.

 

Moody’s analysis came after the Central Bank of Cyprus published data showing around one-third of Cyprus bank’s gross loans had payment deferrals as of June 5.   

 

“The deferrals will reduce the extent of any deterioration, but their ultimate effect will depend on the depth and duration of the economic downturn,” the credit agency published.  

 

The tourism sector will take significantly longer to recover, the analysis went on. “We expect Cyprus' economy to contract by 7.5% this year before recovering in 2021, when we expect it to grow by 6.0%.”

 

High private sector debt is exacerbating the strain on borrowers and Moody’s expect the policy response measures by the relevant authorities to alleviate the immediate strain on creditworthy borrowers' cash flow and increase the likelihood of the recovery and longer-term viability of their loans. The measures include a broad loan payment throughout 2020 available to all borrowers with previously performing obligations who request it.

 

“With total loans with deferrals of €11.4 billion as of 5 June, we estimate banking system loans with deferred payments at around a third of gross banking system loans. Loans with payment deferrals are in addition to nonperforming loans, which comprised 28% of system-wide gross loans at the end of 2019. We estimate that loan deferrals make up almost half of the banking system's performing loans,” the report stated.

 

The high level of loan deferrals mirrors the strains on Cyprus' economy, but also the broad and protracted payment deferral framework. Deferrals for tourism-related loans account for 81% of gross loans and 89% of performing loans.  “Other confidence-sensitive sectors such as real estate and the troubled construction sector also have high percentages of deferred loans. Combined, the three sectors account for more than 60% of loan deferrals for nonfinancial companies,” the report ended.

MORE ON ECONOMY

Cost Of Electricity To Be Reduced In 2022, RES Fee Must Be Revised, Pilides Says

The cost of electricity is expected to be reduced in 2022, as the market opens to ...

Stocks Rise As Biden Transition, Vaccine progress Lift Confidence

Asian shares climbed on Tuesday as news U.S. President-elect Joe Biden was given the ...

Cyprus' Proposals For EU Recovery And Resilience Facility To Be Finalised Next Week

Cyprus’ plan of proposals to receive about €968 million of funding from the ...

FROM AROUND GOLDNEWS

   

Ursula von der Leyen: The First Europeans Could Be Vaccinated By The End Of The Year

European Commission President Ursula von der Leyen said Wednesday that the first European citizens might be vaccinated before the end of December. ...
   

Petrides: Our Goal Is A Cyprus Settlement And Not Sanctions Against Turkey

Cyprus Defence Minister, Charalambos Petrides, has said that what is sought is a settlement of the Cyprus problem on the basis of the agreed framework and the ...
   

Investigating State-level Corruption At The 3rd Cyprus Anti-Fraud Conference

Bank of Cyprus is presenting the digital “3rd Cyprus Anti-fraud Conference” on Tuesday, 15 December 2020. This year’s event will welcome a ...
   

Turnover Of Retail Trade Down In September And In First Nine Months Of 2020

The value and volume of retail trade except of motor vehicles declined in September 2020 and the first nine months of the year, according to provisional ...
   

HRVP Borrell: The European Union Also On Behalf Of Its Member States Stands By Cyprus

During his deuterology the High Representative noted the tension in some of the MEPs` positions and stressed that he understands the reasons, but clarified ...
   

Emirates Crowned Best Airline And Best Long-Haul Airline At Leading UK Travel Awards 2020

Emirates has been recognised as the Best Airline for 2020 at The Sun Travel Awards, and the Best Long-Haul Airline at The Times and The Sunday Times Travel ...
   

Celestyal Cruises Launches Early “Black Friday” Discount Offer And Special “Hero’s Discount”

With the ongoing Covid-19 global pandemic having put travel on pause for many this year –  including those heroes on the frontline of fighting ...
   

Europe On Way To Recovery, Say Leading Industrialists

The heads of Europe’s greatest industrial corporations have declared the bloc is on its approach to restoration, displaying a pointy rebound in ...
 

YOUR COMMENTS

HEADLINES

MOST POPULAR

Gold_November_300x250px
Invest_Cyprus_12/10-12/12

IMH LTD