The value of loans managed outside Cyprus’ traditional banking sector continued to increase in the first quarter of 2026, highlighting the scale of the island’s loan servicing market and the continued burden of distressed debt on households and businesses.
Loan Portfolio Expands By €256 Million
According to figures released by the Central Bank of Cyprus (CBC), the contractual balance of loans managed by Credit Acquiring Companies and Credit Servicing Companies reached €19.61 billion as of March 31, 2026. That was €256 million, or 1.3%, higher than the €19.35 billion recorded at the end of 2025.
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Growth was driven primarily by larger household and non-financial corporate portfolios, which accounted for most of the quarterly increase.
Households And Businesses Carry The Largest Burden
Household loans under management totalled €9.67 billion, including €662 million in performing loans and €9.01 billion classified as non-performing. Those exposures related to 55,044 households.
Loans to non-financial corporations amounted to €9.24 billion, comprising €403 million in performing exposures and €8.83 billion in non-performing loans across 9,261 companies.
Compared with the end of December 2025, non-performing balances increased in both the household and corporate segments, while performing loans declined in each. Taken together, the figures suggest that asset quality remains under pressure even as the overall portfolio continues to expand.
Other Financial Corporations Show Modest Improvement
A more positive trend emerged among other financial corporations. Performing loans in that segment increased to €15 million from €6 million at the end of 2025, while non-performing balances edged down to €689 million from €691 million.
Overall, the segment covers 76 financial corporations.
Net Carrying Amount Highlights Recovery Expectations
Although the contractual value of the managed portfolio stood at €19.61 billion, its net carrying amount was significantly lower at €2.84 billion as of March 31, 2026.
This gap reflects the way acquired loan portfolios are valued on the balance sheets of Credit Acquiring Companies. While the contractual balance represents the full amount owed under loan agreements, including accrued interest, the net carrying amount reflects expected future cash flows after taking impairment losses and anticipated recoveries into account.
Overall, the latest data underline the continued importance of Cyprus’ loan servicing industry. While the managed portfolio continued to expand during the first quarter, the predominance of non-performing loans across both household and corporate borrowers shows that legacy debt remains a significant feature of the country’s financial landscape.
