Recent cuts in interest rates by the European Central Bank have spurred interest from borrowers in Cyprus, driving new loan demands to an impressive €1.24 billion in the first quarter of 2025. This surge is reflected in both consumer and business loans, largely orchestrated by the Bank of Cyprus and Hellenic Bank, which dominate 67% of the market.
Despite the dip in interest rates, depositor activity remains robust, indicating a strong trust in the banking sector.
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Insights from the Bank of Cyprus
The latest Bank of Cyprus reports show a 16% quarter-on-quarter and 25% year-on-year increase in new loans. This growth is primarily fueled by large corporates, mortgages, and international business loans.
Understanding Hellenic Bank’s Performance
Hellenic Bank reveals a significant uptick in new loans, reaching €404 million in the first quarter of 2025. Notably, 19% of this pertains to green loans, marking a forward-thinking trend.
Liquidity and Deposits: A Growing Trust
Both banks reflect substantial liquidity accumulation, with their market shares at 72.8%. Bank of Cyprus led with €20.70 billion in deposits, showcasing a strategic balance in terms, savings and current accounts. Hellenic Bank captured €15.9 billion in deposits, underscoring a 1% growth.
Outlook for 2025
Bank executives maintain optimism for 2025, buoyed by economic strength and liquidity. Leaders like Panikos Nikolaou and Michalis Louis reiterate their commitment to supporting domestic economic needs while maximizing shareholder returns.
