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Cyprus Banks Enter New Growth Phase As Lending Picks Up

Major banks in Cyprus and Greece remained highly profitable in the first half of 2026, even as interest rates continued to decline. The four major Greek banks generated around €2.5 billion in combined profit, while including Bank of Cyprus brings the total to roughly €2.8 billion.

The results point to a changing environment for the sector. As interest rates become less supportive, stronger lending, fee income, international operations and improved efficiency are playing a bigger role in earnings.

Strong Results Across The Sector

Eurobank reported €738 million in first-half net profit, rising to €776 million on an adjusted basis, with return on tangible equity at 16.6%. Its Cyprus operations contributed €231 million, although that was 7.7% below the previous year.

Bank of Cyprus posted €252 million in after-tax profit, up 7% year-on-year, while return on tangible equity reached 18.8%. Net interest income remained broadly stable at €369 million despite lower rates, supported by loan and deposit growth, lower funding costs and hedging.

The bank’s performing loan portfolio reached about €11.4 billion. It also announced an interim dividend of €0.24 per share, worth approximately €105 million.

Greek Banks Keep Lending

National Bank of Greece reported €661 million in profit, up 3%, with adjusted return on tangible equity at 15.5%. Strong lending and higher fee income supported upgrades to several 2026 targets.

Piraeus recorded a record €617 million in first-half profit, while its loan portfolio expanded by €1.8 billion.

Alpha Bank reported €497 million in profit, with normalised earnings of around €500 million. Fee income was a particularly strong contributor, while lending growth supported net interest income.

A Shift Beyond Interest Income

With rates moving lower, banks are increasingly relying on credit expansion and fee-generating businesses to maintain profitability. Business lending is becoming a key growth driver, while services such as investment products, cards and insurance are providing additional revenue.

Strong capital positions are also allowing banks to increase shareholder distributions. Bank of Cyprus plans to distribute 70% of its 2026 profit and has indicated there could be room for an additional payout. Its interim dividend is 20% higher than a year earlier.

AI Is Everywhere, But Consumers Are Growing More Skeptical

AI is advancing rapidly, but public enthusiasm is moving in the opposite direction. Recent surveys show that more Americans are becoming concerned about the technology, while growing opposition to data centers is turning AI’s social acceptance into a business and political challenge.

A Pew Research study found that 52% of Americans are now “more concerned than excited” about the growing use of AI in daily life, up from 37% in 2021. A May Economist/YouGov poll also found that more than 70% believe AI is developing too quickly.

The political backlash is becoming harder to ignore. Axios reported that the National Republican Senatorial Committee warned major AI companies that data center projects could hurt Republican candidates in a key Ohio election.

AI’s Growing Reputation Problem

Public concern is also showing up among younger Americans. A CNBC poll found that most respondents aged 18 to 34 did not trust nine leading AI executives to act responsibly on AI.

For many consumers, AI is increasingly associated with chatbots, AI-powered search and features appearing inside everyday products, rather than with major improvements to their lives. Google has transformed Search with AI, while companies are adding AI to products ranging from email to televisions.

At the same time, people are hearing about AI being used by students to cheat, while companies face disputes over copyrighted material used to train models and generate art, music, video and writing.

That combination is creating a difficult perception: consumers are being asked to accept the disruption caused by AI without necessarily seeing enough personal benefit in return.

Data Centers Add To The Backlash

The problem extends beyond software. Tech companies are spending enormous sums building AI data centers, but communities are increasingly pushing back over issues including electricity demand, water use and infrastructure.

According to The Wall Street Journal, companies are responding with additional incentives such as employment commitments and investments in local infrastructure. One Louisiana project even included $50,000 bonuses for teachers.

Meanwhile, some consumers are gravitating toward technology that feels deliberately less connected. Young people are showing renewed interest in dumbphones, point-and-shoot cameras, cassette players and CD players. AI-free classic iPods are also attracting attention, while offline hobbies and in-person activities are gaining popularity.

The Industry Is Starting To Take Notice

Some technology executives believe the backlash is partly a communication problem. Others are increasingly acknowledging that consumers may understand AI perfectly well but simply don’t consider its current benefits worth the trade-offs.

Airbnb CEO Brian Chesky recently said on a podcast that the industry needs to build products that ordinary people genuinely value, rather than focusing primarily on AI itself.

Anthropic CEO Dario Amodei similarly described negative perceptions of AI as a “big problem” and a “crisis of trust” in a post on X. In his view, the strongest response would be for AI companies to actually deliver on their biggest promises, including breakthroughs that could significantly improve people’s lives.

For an industry that has attracted hundreds of billions of dollars on the expectation that AI will transform everyday life, technological progress alone may no longer be enough. The bigger challenge could be convincing people that they are actually better off because of it.

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