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Cyprus’ Banking Sector Drives Major Gains In Nonperforming Loan Recovery

by THEFUTURE.TEAM

November 15, 2024

A recent analysis from Morningstar DBRS Ratings highlights a positive trajectory for Cyprus’ nonperforming loan (NPL) market, outperforming initial expectations and showcasing resilience against broader economic pressures. According to the report, Cyprus’ NPL sector maintained a steady upward trend throughout 2024, aided by strong performance from key projects such as Hestia Financing, Titan Financing, and Capella Financing.

Key Findings on Cypriot NPL Transactions

The report underscores significant improvements in Cyprus’ NPL transactions, where projects Hestia, Titan, and Capella surpassed prior projections in terms of collections. Capella achieved a notable 5.8% increase in its annual collection rate (CCR), with Titan and Hestia also registering growth at 1.7% and 3.8%, respectively. These results reflect an improved outlook for Cyprus’ NPL market, despite some initial underperformance relative to business plans.

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The upgrades follow Cyprus’ ongoing progress in reducing its nonperforming loan ratios, particularly in the mortgage sector, which saw a reduction of 254 basis points (bps)—one of the most significant declines in Europe. DBRS attributes this improvement to proactive deleveraging strategies and the strengthened quality of collateral backing NPL portfolios.

Market Resilience Amid Economic Pressures

Even as the European Central Bank’s (ECB) stringent monetary policy added pressure, the Cypriot NPL market benefited from high demand for foreign labour and a more favourable interest rate environment, helping mitigate the adverse effects. This buoyancy in the real estate sector has encouraged rating agencies to upgrade their outlooks, switching Hestia and Capella’s trends from negative to positive.

The Morningstar DBRS commentary suggests that if these stabilization trends continue, Cyprus’ NPL sector could see further positive adjustments in credit ratings. However, the report does caution that certain projects, such as Titan Financing, face potential risks related to the relatively lower collateralization of senior securities, which could become problematic if collection rates fall short of expectations.

Outlook for Cyprus’ NPL Market

The Cypriot NPL market’s upward trajectory is an encouraging sign of recovery within a traditionally volatile sector. Analysts believe that continued strength in the country’s banking and real estate sectors will be crucial for sustaining these improvements while emphasizing the importance of monitoring collateral levels in individual projects.

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Cyprus Emerges As A Leading Household Consumer In The European Union

by THEFUTURE.TEAM

June 30, 2025

Overview Of Eurostat Findings

A recent Eurostat survey, which adjusts real consumption per capita using purchasing power standards (PPS), has positioned Cyprus among the highest household consumers in the European Union. In 2024, Cyprus recorded a per capita expenditure of 21,879 PPS, a figure that underscores the country’s robust material well-being relative to other member states.

Comparative Consumption Analysis

Luxembourg claimed the top spot with an impressive 28,731 PPS per inhabitant. Trailing closely were Ireland (23,534 PPS), Belgium (23,437 PPS), Germany (23,333 PPS), Austria (23,094 PPS), the Netherlands (22,805 PPS), Denmark (22,078 PPS), and Italy (21,986 PPS), with Cyprus rounding out this elite group at 21,879 PPS. These figures not only highlight the high expenditure across these nations but also reflect differences in purchasing power and living standards across the region.

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Contrasting Trends In Household Spending

The survey also shed light on countries with lower household spending levels. Hungary and Bulgaria reported the smallest average expenditures, at 14,621 PPS and 15,025 PPS respectively. Meanwhile, Greece and Portugal recorded 18,752 PPS and 19,328 PPS, respectively. Noteworthy figures from France (20,462 PPS), Finland (20,158 PPS), Lithuania (19,261 PPS), Malta (19,622 PPS), Slovenia (18,269 PPS), Slovakia (17,233 PPS), Latvia (16,461 PPS), Estonia (16,209 PPS), and the Czech Republic (16,757 PPS) further illustrate the disparate economic landscapes within the EU. Spain’s figure, however, was an outlier at 10,899 PPS, suggesting the need for further data clarification.

Growth Trends And Economic Implications

Eurostat’s longitudinal analysis from 2019 to 2024 revealed that Croatia, Bulgaria, and Romania experienced the fastest annual increases in real consumer spending, each growing by at least 3.8%. In contrast, five member states, with the Czech Republic experiencing the largest drop at an average annual decline of 1.3%, indicate a varied economic recovery narrative across the continent.

This comprehensive survey not only provides valuable insights into current household consumption patterns but also offers a robust framework for policymakers and business leaders to understand economic shifts across the EU. Such data is integral for strategic decision-making in markets that are increasingly defined by evolving consumer behavior and regional economic resilience.