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Half the businesses in Cyprus are failing to repay their loans, with the construction sector being the worst offender as non-performing loans reached 72 percent in June according to the Central Bank.

NON-PERFORMING LOANS (NPLs) in the Cyprus banking system swelled by €317 million at the end of June 2014 compared with the previous month, despite a reduction in the total amount of loans, according to data released by the Central Bank of Cyprus on Monday.

At the end of June NPLs amounted to €27.81 billion or 46.5% of total loans amounting to €59.80 billion, compared with 45.55% or €27.49 billion on 31 May 2014, when total loans amounted to €60.34 billion.

According to the latest figures released by the Central Bank, NPLs in the banking sector in June 2014 amounted to €20.78 billion or 44.65% of total loans amounting to €46.54 billion, compared with €20.51 billion or 44.59% in the previous month. At the end of June, NPLs in the Cooperative Sector amounted to €13.26 billion or 53.02% of the total loans amounting to €7.03 billion, compared with €6.98 billion, or 52.62% in May 2014.

Commercial bank loans 

In the Cyprus commercial banks, corporate loans stood at €29.15 billion in June, of which 49.62% were classified as non-performing, compared with 48.31% in the previous month.

Loans to individuals and households rose to €13.96 billion in June, of which 45.22% were non-performing, compared with 44.70% in the previous month. NPLs in the construction sector jumped to 72.05% of a total of €7.15 billion, compared to 70.12% in May 2014 when the total loans were €7.19 billion.

NPLs in real estate amounted to 54.54% of a total of €4.19 billion, compared with 52.52% in the previous month.

Cooperative sector loans 

The majority of loans in the Cooperative sector were granted to individuals and households. These amounted to €10.38 billion in June, of which 55.10% were non-performing, compared to 54.82% in May 2014. Regarding loans for the purchase of real estate, the total loan facilities amounted to €5.11 billion in June, of which 46.77% were classified as non-performing, compared with 46.55% in the previous month. Consumer loans in June stood at €4.29 billion, of which 62.93% were non-performing, compared to 62.64% in May 2014.

Foreclosures bill 

Meanwhile it is anticipated that a revised version of the contentious foreclosures bill will be placed before an extraordinary plenary session of parliament for voting this Friday together with a number of other pieces of legislation. Costas Melas, the head of the association for the protection of borrowers, has called lawmakers to pass the bill saying that “The consequences from its implementation and how they can be tackled is another matter” following a meeting with President Anastasiades.