Profitability in Cyprus’ banking sector declined by 23.6% in the first quarter of 2026, according to consolidated data released by the Central Bank of Cyprus. The figures, covering the period to March 31, 2026, provide an overview of the sector’s earnings, balance sheet developments and capital adequacy.
Net profit fell by €62 million to €202 million, compared with €264 million in the corresponding period of 2025. According to the Central Bank, the decline primarily reflects lower net interest income and losses related to foreign exchange movements.
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Increase In Total Assets
Balance sheet size continued to expand during the quarter. Total assets increased by €274 million, or 0.4%, to €70.235 billion, compared with €69.961 billion at the end of December 2025. Growth in assets was mainly driven by increases in loans and advances, as well as holdings of debt securities.
Decline In CET1 Ratio
The sector’s Common Equity Tier 1 (CET1) ratio declined by 0.7 percentage points to 25.1% at the end of March 2026, from 25.8% three months earlier. Rising risk exposure offset improvements in capital levels, contributing to the decrease in the ratio. Despite lower profitability, capital buffers remained strong. A CET1 ratio of 25.1% indicates that Cyprus’ banking sector continues to maintain high levels of capital adequacy.
