Opens in a new tab

Breaking news

Cyprus Loan Servicing Portfolio Grows To €19.61 Billion In First Quarter

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.

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.

Cyprus Company Registration: Two To Four Days, Unless Security Checks Intervene

Cyprus aims to register companies within two to four working days when applicants submit complete documentation. However, regulatory approvals, sanctions checks, foreign ownership and national security considerations can extend the process or prevent registration.

Energy, Commerce and Industry Minister Michael Damianou outlined the timeframe in a written response to MP Efrem Christou, who asked about company formation procedures and the checks required before approval.

Fast Registration Depends On Complete Documentation

Damianou said authorities seek to process complete applications within two to four working days, regardless of a company’s structural complexity. The timeframe also depends on whether applicants pay an additional fee for expedited processing.

According to the official incorporation requirements, the standard registration fee is €165, rising to €235 for companies without share capital. Expedited processing costs an additional €100.

Applicants must submit an approved company name, a memorandum and articles of association, and forms HE1, HE2 and HE3. Public companies must also provide form HE5.

Regulated Businesses Require Additional Approval

Companies operating in certain sectors must obtain prior clearance from the relevant authorities or professional bodies. These include medical and dental businesses, law firms, insurance and reinsurance companies, and firms supervised by the Cyprus Securities and Exchange Commission.

The Central Bank of Cyprus must also approve company names associated with payment institutions, electronic money and foreign exchange services. Additional restrictions apply to educational institutions using terms such as “university” or “college”, casino operators, broadcasters and wine producers.

Non-profit organisations seeking to register without “Limited” or “Ltd” in their names also require ministerial authorisation.

Sanctions And Foreign Ownership Trigger Extra Checks

Applications involving shareholders, directors or company secretaries subject to EU, UN or US sanctions receive additional scrutiny. Registration can proceed only if the competent sanctions authority does not prohibit it. Damianou noted that US sanctions are considered indirectly but have not been incorporated into Cyprus legislation in the same way as EU and UN restrictions.

Applications involving Turkish interests are also subject to additional review. Under procedures introduced around 20 years ago, the registrar must consult national security services before proceeding with registrations involving Turkish interests or businesses that could threaten the Republic’s security.

Damianou distinguished these cases from applications submitted by Turkish Cypriots, saying there is “no substantial difference” in how their registration documents are examined. Applications may nevertheless be refused if classified information raises concerns about national interests or national security.

Public Servants Face Separate Restrictions

Under Article 65 of the public service law, government employees cannot act as directors, company secretaries or shareholders in private or public companies without prior special permission from the finance minister.

Proposed Law Would Expand Registrar’s Powers

The government is also seeking to strengthen the Registrar of Companies’ authority to address potential security risks. An amendment to the companies law, submitted to Parliament on September 17, would allow the registrar to reject applications, refuse company filings or remove existing businesses from the register on grounds including national security, public order, public interest and the protection of state sovereignty.

The proposal, approved by the Council of Ministers on August 6, remains before the House commerce committee. It would allow authorities to withhold detailed justifications where disclosure could reveal sensitive information, while informing affected companies of the general grounds for decisions.

The bill follows parliamentary discussions about companies controlled by non-EU nationals, particularly those with Turkish ultimate beneficial owners, and possible implications for property ownership through foreign-controlled businesses. Further details are available in the proposed amendment and earlier parliamentary reporting.

Balancing Investment And Oversight

Cyprus is seeking to maintain an efficient company registration process while strengthening checks on ownership, sanctions compliance and potential security risks.

The two-to-four-day target supports the country’s appeal to entrepreneurs and international investors, but the actual timeline depends on the nature of the business, the documentation submitted and any additional regulatory or security reviews required.

Aretilaw firm
eCredo
Uol
The Future Forbes Realty Global Properties

Become a Speaker

Become a Speaker

Become a Partner

Subscribe for our weekly newsletter