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Cypriot Banking Stability: Ongoing Resilience Amid Geopolitical Uncertainty

by THEFUTURE.TEAM

Stable Non-performing Loan Ratio Under Pressure

The Central Bank of Cyprus confirmed a steady non-performing loan ratio of 5.5% as of the end of August 2025. This stability comes despite a backdrop of significant geopolitical disruptions, underscoring the sector’s robust financial foundation.

Improved Provision Coverage and Enhanced Credit Quality

By applying the European Banking Authority’s Risk Dashboard methodology, which encompasses loans and advances to Central Banks and Credit Institutions, the NPL ratio showed signs of improvement, declining to 2.8% from 2.9% over the previous month. Additionally, the coverage ratio of non-performing loans with provisions increased to 62.6%, up from 62.2% in July, illustrating a cautious yet proactive approach to risk management.

Diversified Lending Practices Amid Market Shifts

Total restructured loans reached €1.2 billion at the close of August 2025, with half of this sum (€0.6 billion) categorized as non-performing. In parallel, net new loans in Cyprus experienced a modest decline, as highlighted by the Central Bank of Cyprus. In a recent report, new loans in Cyprus fell by €18.5 million in October, primarily due to a deceleration in corporate credit activity. Nevertheless, housing and consumer loans have shown resilience, with housing lending reaching €117.5 million and consumer loans also gaining momentum.

Rising Interest Rates And Liquidity Advantages

Interest rates saw increases across key segments, with mortgage rates climbing to 3.73% and consumer loans to 6.88%. While Cyprus’s lending rates are in line with the Eurozone median, deposit rates remain comparatively low. The Central Bank of Cyprus attributes this discrepancy to the exceptional liquidity position of Cypriot banks, as evidenced by a liquidity coverage ratio of 329%—a competitive advantage in today’s challenging market environment.

Rolls-Royce Raises Guidance As Defense And Power Systems Drive Growth

by THEFUTURE.TEAM

Rolls-Royce raised its full-year profit and cash flow guidance after reporting stronger-than-expected first-half results, supported by growth across its civil aerospace, defense and power systems businesses.

Underlying operating profit rose 46% year on year to £2.5 billion ($3.3 billion) in the first six months of 2026, while revenue increased more than 24% to £11.3 billion.

The company now expects full-year underlying operating profit of £4.7 billion to £4.9 billion, up from previous guidance of £4 billion to £4.2 billion. It also raised its free cash flow forecast to £3.8 billion to £4 billion, compared with £3.6 billion to £3.8 billion previously.

Shares rose as much as 6% in early trading before paring gains to trade about 4% higher.

Data Center Demand Supports Power Systems

Chief Financial Officer Helen McCabe told CNBC that orders in Rolls-Royce’s data center power business increased by more than 50% in the first half as operators invested in backup and on-site power systems.

The company has benefited from growing demand for power infrastructure as data center operators expand capacity.

Defense Spending Provides Additional Support

McCabe also said Rolls-Royce expects to benefit from higher defense spending in the U.K. and across NATO countries. She cited the U.K.’s long-term defense investment plan, which provides funding visibility through 2030 and beyond.

“We’ve had very positive initial conversations with the new government,” McCabe said, adding that the company supports its focus on growth, defense and industrial manufacturing.

Turnaround Continues

Chief Executive Tufan Erginbilgic said the company’s transformation strategy continued to deliver results. “Our transformation continues to deliver,” he said in a statement. “We have unlocked new growth opportunities across the Group.”

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