Bank of Cyprus Receives Notable Ratings Upgrade By Fitch

by News Editor

March 18, 2025

In a remarkable financial development, Fitch Ratings has elevated the ratings of the Bank of Cyprus Public Company Limited (BoC) from ‘BB+’ to ‘BBB-‘, indicating a strong positive outlook. This upgrade underscores the bank’s enhanced asset quality and robust capitalization.

The rating improvement is largely attributed to the bank’s strategic reduction in problematic legacy assets, such as non-performing exposures (NPEs) and net foreclosed properties. This has enabled a healthier capital structure with reduced encumbrance by unresolved problem assets.

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Fitch notes that despite lowering interest rates, BoC’s profitability remains solid thanks to its competence as the largest domestic bank in Cyprus. With consistent deleveraging, it is poised for ongoing financial stability.

Prospective Economic Growth For Cypriot Banks

The favorable outlook anticipates better business and financial prospects amidst Cyprus’s economic growth, with decreasing unemployment and lower private sector debt. BoC’s plans to expand into wealth management and insurance activities stand to gain from these economic trends.

Expectations are that the ratio of BoC’s problem assets will drop below 5% within two years, thanks to diminishing NPE portfolios and active disposals of foreclosed assets. Last year, the bank’s operating profit/risk-weighted assets (RWA) ratio was a robust 5.4%, indicating a sustainable path forward.

Financial Strength And Stability

By the end of 2024, BoC boasted a common equity Tier 1 (CET1) ratio of 19.2%, with a notable buffer over regulatory demands. The bank’s CET1 encumbrance by problem assets fell significantly owing to further disposals.

Supported by a strong Cypriot deposit base, BoC maintains excellent liquidity. Looking ahead, while a downgrade is improbable, Fitch warns that any economic downturn in Cyprus could impact ratings. However, further elevation of the operating environment for Cypriot banks could enhance BoC’s business profile.

If you’re curious about technological advancements in Cyprus, read AI At Work: Cyprus Among Europe’s Most AI-Skeptical Nations.

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Cyprus Trade Deficit Widens To €4.68 Billion As Imports Rise In 2026

by News Editor

August 27, 2026

Cyprus’ trade deficit widened 15.4% in the first half of 2026 as imports increased and exports declined, even as trade with countries outside the EU expanded during the second quarter. Imports reached €7.30 billion between January and June, up 8.8% from a year earlier, while exports fell 1.2% to €2.62 billion, according to the Cyprus Statistical Service (Cystat).

EU Trade Expands In Second Quarter

Extra-EU imports rose 9.9% in the second quarter from the previous three months to €701.8 billion, while exports increased 5.4% to €680 billion. Year on year, imports were up 11.7% and exports rose 4.5%.

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China remained the EU’s largest source of imports at €153.6 billion, or 21.9% of the total, followed by the United States at €98.7 billion and the United Kingdom at €43.4 billion. The United States was also the largest export market at €127.7 billion, ahead of the United Kingdom and Switzerland.

Cyprus Records Sharp Deficit In June

June brought another significant deterioration in Cyprus’ trade balance. Imports rose 11.9% year on year to €1.29 billion, while exports fell 9.9% to €463 million, producing a monthly deficit of about €826.3 million, almost 30% higher than in June 2025.

Imports from EU countries increased to €730.7 million from €615.1 million, while non-EU imports rose to €558.6 million. Exports to EU markets increased to €212 million, but shipments outside the bloc fell sharply to €251 million from €365.1 million.

May Exports Rebound

May provided a stronger export result, with total exports jumping 59.2% year on year to €521.6 million. Domestic exports rose 63.9% to €348.1 million, while exports of foreign products increased 50.5% to €173.5 million.

Industrial products accounted for €334.7 million of domestic exports, while agricultural exports fell to €12.2 million.

Mineral Fuels Lead Domestic Exports

Mineral fuels and oils remained Cyprus’ largest domestic export category during the first five months of 2026, generating €743.6 million, or 55.5% of the total. Cystat said these products were imported, processed in Cyprus and subsequently re-exported.

Halloumi accounted for €167.5 million, or 12.5%, while pharmaceutical products generated €144.2 million, or 10.8%.

Import Dependence Remains High

Cyprus imported €13.87 billion worth of goods and exported €5.58 billion in 2025, highlighting the country’s persistent trade imbalance.

Cystat said the June figures remain provisional, while several earlier monthly figures have been revised. The first-half data show that Cyprus’ reliance on imports remains significant despite stronger trade flows across the wider European economy.

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