UNDER pressure from the slowdown in the Cyprus property sector, it is expected that the commercial banks will be called on to cover their big lending exposures the sector next year. In its latest economic bulletin the Central Bank of Cyprus refers to the credit risks that the banks have undertaken over the past few years as being a result of their increased lending to property developers and real estate agents.
In September 2007, loans to companies actively involved in the property construction and management sectors amounted to 15.8% of all loans to Cypriots. This represents an increase of 22% over the year which, according to calculations carried out by StockWatch, corresponds to an increase of €4.1 billion. A year ago the banks’ exposure stood at €5.1 billion a year ago; today it exceeds €9.2 billion.
