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The IMF says “progress has been slow” on Cypriot efforts to tackle the non-performing loans (NPLs) that riddle its banking sector. Unless Cyprus passes a law facilitating loan foreclosure the ‘Troika’ (comprising the IMF and the European authorities) will not release the fifth tranche of the island’s €10bn bailout program – originally agreed in March last year.
Completion of the fifth review, which would take total payments to €6.2bn, is slated for September but “if the [foreclosure] law is not passed, the review will not be concluded,” IMF Mission Chief Delia Velculescu told a 30 July conference call.
Over 50% of the Cypriot banking sector’s loan book is non-performing, the equivalent of 140% of GDP, the IMF says. For the largest lender Bank of Cyprus (BoC) alone the figure is 48.6% (€12.7bn).
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