The financial landscape in Cyprus is witnessing a pivotal shift as banks gear up to relax lending criteria for the first time since the global financial crisis of 2009. According to a Central Bank survey, there is an anticipated surge in credit demand as lending terms become more accommodating.
An Economic Revival?
With the service sector showing booming growth in 2024, the January 2025 Bank Lending Survey points towards a more lax approach in borrower assessments. This marks a significant change from the previously stringent conditions that have persisted since 2017 for household loans and even earlier for business loans.
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The fourth quarter of 2024 observed a decline in interest rates and reduced bank margins across various loan types. This trend aligns with banks’ perceptions of diminished risk within the economy, leading to competitive lending strategies particularly for business and mortgage loans.
Mixed Signals For Loan Applicants
Interestingly, while rejections of business loan applications fell—for both small-to-medium enterprises and large corporations—the rejection rate for household loans inched upwards, despite an overall easing of lending terms.
For past accolades in the banking sector, check out how the Bank of Cyprus was honored with JP Morgan’s Quality Recognition Award for its exceptional service.
