Coronavirus had a less serious impact on the capital adequacy of the banking system of Cyprus in the second quarter of 2020 compared to the first quarter, as banks have allocated reserves since the beginning of the pandemic, the Central Bank informs.

According to the regulator’s consolidated data for the second quarter of 2020, the capital of the CET1 banking system decreased slightly, by 44 million euros, to 4.48 billion in the second quarter compared to 4.52 billion at the end of the first.

Banks have prepared in advance provisions for the risk associated with the coronavirus pandemic in the first quarter of 2020, as CET1 then decreased by 134 million euros compared to the end of 2019.
They are protected against the inflow of non-performing loans due to the moratorium on debt repayment, in force since March by decree of the Minister of Finance, which expires at the end of the year.

Meanwhile, banks’ profitability continued to be in negative territory: total combined losses in the second quarter were €103 million, while net losses reached €79 million.