Cyprus Banking Rates: Steady Household Deposits and Shifting Mortgage And Business Loan Trends

by THEFUTURE.TEAM

October 16, 2025

Overview Of August Developments

The Central Bank of Cyprus (CBC) has released its August 2025 report outlining the performance of deposit and loan interest rates across all credit institutions. Notably, household deposit rates have remained constant while business deposit rates experienced a decline. Meanwhile, the average mortgage rate increased and business loan rates saw a modest reduction, signaling evolving conditions in the financial sector.

Mortgage Loan Rates Rise Amid Competitive Dynamics

The CBC data indicates that the average interest rate for housing loans to Euro area residents increased from 3.90% in July 2025 to 4.01% in August 2025. The Bank of Cyprus recorded the highest rate of 4.64%, although this figure marked a decrease from 4.96% in the previous month. In contrast, Alpha Bank Cyprus offered the most competitive rate at 2.27%, down from 3.29%. Other key players, including the Housing Finance Corporation and Hellenic Bank, reported rates of 3.67%, while Ancoria Bank’s average rate shifted from 3.22% to 3.63%.

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Business Loan Rates Experience A Subtle Decline

The report also highlights a marginal drop in the average rate on new business loans up to €1 million, decreasing from 4.46% in July 2025 to 4.44% in August 2025. Despite this overall reduction, institution-specific variations were evident. Astrobank, for instance, posted a peak rate of 6.45%, an increase from 5.75%, whereas Hellenic Bank maintained competitive lending with a rate of 3.72%, down from 3.88%. Banque SBA and Societe Generale also displayed mixed trends, while the Bank of Cyprus showed a modest decrease from 4.96% to 4.91%.

Household And Business Deposits: Divergent Movements

In the deposit sector, the average interest rate on household time deposits with maturities up to one year remained steady at 1.08% in August 2025, aligning closely with the broader euro area average of 1.71%. The National Bank of Greece (Cyprus) led with a rate of 1.47%, whereas the Housing Finance Corporation continued to offer the lowest rate at 0.75%.

For business deposits, the average rate decreased by six basis points to 1.15%, compared to 1.21% in the previous month. Alpha Bank remained at the forefront with a rate of 1.41%, while the Housing Finance Corporation again reported the lowest rate, now at 0.21%. Hellenic Bank and Ancoria Bank both registered a rate of 1.30%, with additional institutions like Astrobank, Eurobank, the Cyprus Development Bank, and the Bank of Cyprus reflecting consistent adjustments in their rates.

Conclusion

The CBC’s August report illustrates a nuanced financial landscape in Cyprus. With household deposit rates holding steady and mortgage rates experiencing a rise, financial institutions continue to navigate competitive pressures and customer demands. As business loan and deposit rates adjust, stakeholders should remain attentive to these trends, which may influence broader economic decisions and investor sentiment.

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Bank of Cyprus Upgrade Signals Fresh Optimism For Greek And Cypriot Banks

by THEFUTURE.TEAM

June 26, 2026

Regional Banks Enter A More Favorable Cycle

Bank of Cyprus and Eurobank are well positioned to benefit from a renewed re-rating of Greek and Cypriot bank stocks, according to Cyprus-based investment firm Roemer Capital, which upgraded Bank of Cyprus to a buy rating and reaffirmed its positive view on Eurobank.

The firm cited easing geopolitical tensions, resilient economic growth in Greece and Cyprus, lower funding costs and Greece’s expected transition to developed-market status as the main factors supporting the sector.

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Roemer Capital also lowered its cost of equity assumptions, updated its forecasts following first-quarter 2026 results and extended its valuation horizon to the end of 2027, raising target prices across its banking coverage.

Bank Of Cyprus Gets The Largest Upgrade

Bank of Cyprus received the biggest revision, with Roemer Capital upgrading the stock from hold to buy and setting a target price of €11.10, implying potential total upside of 27%.

The firm highlighted the bank’s strong capital generation, profitability and projected 100% dividend payout, describing it as the strongest capital-return story among the banks under coverage. Roemer Capital maintained its buy rating on Eurobank, assigning a target price of €4.90 and forecasting potential upside of 28%. The report said the bank is well placed to benefit from loan growth, improving operating performance and merger-and-acquisition synergies.

National Bank of Greece and Piraeus Bank also retained buy ratings, with expected returns ranging from 25% to 36%. Optima Bank was upgraded to buy, while Alpha Bank remained at hold on valuation grounds.

Why Growth Still Sets The Region Apart

According to Roemer Capital, Greek and Cypriot banks continue to benefit from stronger economic fundamentals than many western European peers. The report pointed to faster economic growth, healthier balance sheets, low levels of non-performing exposures, capital ratios approaching 20% and strong customer deposit bases.

Analysts expect performing loans across the sector to grow at a compound annual rate of 6% to 8% through 2028, supported by private investment, digitalisation, green manufacturing, supply-chain expansion and a gradual recovery in household lending.

The report also said the conclusion of lending under the EU Recovery and Resilience Facility is unlikely to materially affect credit growth, as banks have already shifted back towards traditional commercial lending. Roemer Capital expects Euribor to remain between 2.2% and 2.5%, a level it believes should support both lending activity and net interest margins.

Geopolitics, Valuation And Market Structure Support The Case

The report said improving geopolitical conditions have strengthened the investment outlook, noting that Brent crude prices have largely returned to pre-war levels while Greek government bond yields have stabilised at around 3.5%. Although geopolitical risks remain, Roemer Capital believes the likelihood of a major inflationary shock or significant pressure on bank profitability has eased.

Another important catalyst identified by the firm is Greece’s expected promotion to developed-market status by FTSE Russell, STOXX and MSCI over the coming months.

According to the report, the reclassification should improve liquidity and attract a broader base of international investors. Roemer Capital also said Euronext’s acquisition of the Athens Exchange is expected to strengthen market infrastructure and increase international visibility, particularly for Bank of Cyprus and Optima Bank.

The firm noted that Bank of Cyprus has already benefited from its Athens listing, with average daily trading value increasing from less than €400,000 before its September 2024 move to nearly €6 million afterwards.

Economic Momentum Remains A Core Tailwind

Roemer Capital said both Greece and Cyprus have moved beyond post-crisis recovery and are now supported by private-sector-led growth. For Cyprus, the report highlighted recent tax reform and efforts to simplify the legal and regulatory framework, while also noting that limited foreign banking competition continues to support domestic lenders.

Overall, Roemer Capital expects Greek and Cypriot banks to remain well-positioned for profitable loan growth over the coming years.

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