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Cypriot Banks Demonstrate Continued Improvement In Asset Quality And Provisioning

by THEFUTURE.TEAM

January 23, 2026

Improving Credit Quality In Cyprus

The Central Bank of Cyprus (CBC) reported significant progress in the nation’s banking sector. As of the end of October 2025, the non-performing loans ratio—excluding loans to central banks and credit institutions—declined to 4.2 percent from 4.5 percent at the end of September 2025, underscoring a steady month-on-month improvement in credit quality.

Enhanced Buffer Against Credit Losses

Further refinement in asset quality was observed under the European Banking Authority Risk Dashboard methodology, where the non-performing loans ratio fell to 2.1 percent from 2.3 percent over the same period. Enhanced provisioning measures were also reported, with the coverage ratio of non-performing loans rising to 70.7 percent from 68.5 percent a month earlier. This bolstering of credit loss buffers reinforces the system’s resilience amid ongoing challenges.

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Restructured Loan Portfolio And Sector Dynamics

At the conclusion of October 2025, the sector’s total restructured loans amounted to €1.1 billion. Of this, €0.5 billion remained classified as non-performing, indicating that a substantial portion of restructured exposures has yet to achieve full normalization. These improvements are in line with broader trends across the euro area, where similar declines and enhancements have been underpinned by both diminishing bad loan stocks and growing loan volumes.

Pan-European Context And Future Outlook

European Central Bank data further reflects this positive trajectory with the euro area’s non-performing loans ratio—excluding cash balances at central banks—declining to 2.22 percent in the second quarter of 2025. Specific segments such as household and corporate lending continue to reflect overall stability, though challenges persist for small and medium-sized enterprises where the ratio exhibited a moderate uptick.

Collectively, these figures affirm that Cypriot banks are on track with systemic asset quality improvements that echo wider euro area trends. Strategic provisioning and declining non-performing loan ratios are critical steps in sustaining the resilience of the banking system in these dynamic economic conditions.

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Cyprus Introduces €200 Million Support Measures To Cut Energy And Food Costs

by THEFUTURE.TEAM

March 27, 2026

Comprehensive Relief Measures For A Resilient Economy

The government of Cyprus introduced support measures exceeding €200 million to reduce household expenses and support key sectors. The package targets energy costs, food prices, tourism and agriculture. Measures come in response to rising costs and supply pressures. Implementation begins in April and May 2026.

Energy And Fiscal Reforms

The government will reduce VAT on electricity for households to 5% from May 1, 2026, to March 31, 2027. The measure is expected to lower energy bills. Special consumption tax on transport fuels will decrease by 8.33 cents per liter between April and June 2026. Policy targets fuel-related costs.

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Broadening The Zero VAT Initiative

Authorities will expand the list of products with zero VAT. Meat, poultry and fish will be included from April 1 to September 30, 2026. Existing zero-VAT categories already include fruits and vegetables. The government also decided not to introduce a green tax on fuels, avoiding an additional cost of about 9 cents per liter.

Sector-Specific Supports

The package includes a 30% wage subsidy for hotel employees for April 2026. Measure supports tourism businesses during the early season. Support for airlines aims to maintain connectivity with key destinations. The agriculture sector will receive subsidies covering 15% of costs for fertilizers and supplies in April and May.

Economic Stability, National Security

President Nikos Christodoulidis said economic stability remains a priority for the government. He noted that growth, fiscal balance and inflation trends support current policy decisions. Statement links economic policy with broader national priorities. The government continues to monitor external risks.

Ensuring Consumer Protection

Furthermore, the government has mandated rigorous market oversight and intensified inspections to prevent exploitative pricing during this period of economic intervention. This proactive stance ensures that the benefits of the measures directly serve the citizens without unintended inflationary impacts.