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Cypriot Banks Demonstrate Continued Improvement In Asset Quality And Provisioning

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.

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.

Cyprus Food Costs In Focus: Which Products Exceed EU Averages?

Food prices in Cyprus continue to vary significantly by category, according to Eurostat data for 2025. While some everyday products remain more expensive than the European Union average, others are priced more competitively, highlighting notable differences across the country’s grocery basket.

Dairy Remains One Of The Costliest Categories

Among the categories surveyed, milk, cheese, and eggs remain the most expensive relative to the EU average. Cyprus recorded a price index of 127.1, compared with the EU benchmark of 99.9, placing prices nearly 29% higher than the bloc average.

Only a handful of countries reported similar levels, including Greece at 129.9 and Bulgaria at 126.2. By contrast, several large European markets remained below or close to the EU average, including Spain (95.3), Poland (92.7), Germany (96.1), the Czech Republic (97.2), the Netherlands (99.3), and Belgium (100.3).

Oils And Fats Also Rank Above Average

A similar trend can be seen in oils and fats. Cyprus posted a price index of 113.4, exceeding the EU average of 98.9 by more than 14%. Price differences across Europe remain substantial. Spain recorded the lowest index at 73.2, while Latvia ranked highest at 145.1. Estonia also reported elevated prices at 127.2, whereas Greece stood at 107.5, Poland at 94.3, and Portugal at 95.9.

Bread And Cereals Are Close To The European Average

Prices for bread and cereals remain broadly aligned with European levels. Cyprus recorded an index of 104.2, only slightly above the EU average of 103.3.

Across the bloc, however, differences remain pronounced. Bulgaria reported an index of 81.4, while Denmark reached 136.1. Luxembourg stood at 128.8 and Austria at 120.4, compared with 89.9 in the Netherlands, 94.0 in Spain, 88.9 in Poland, and 87.1 in the Czech Republic. Greece recorded the same level as Cyprus at 104.2.

Produce Offers Clearer Value

Fresh produce remains one of the areas where Cyprus compares more favourably with the rest of Europe.

In the fruit and nuts category, the country’s price index reached 95.0, below the EU average of 104.2. Cyprus therefore, ranks among the more affordable markets, particularly when compared with Luxembourg (124.3), France (125.1), Germany (107.7), and Italy (107.2). Lower prices were recorded in Slovenia (83.4) and Greece (84.9).

Vegetables follow a similar pattern. Cyprus posted an index of 90.6 against an EU average of 101.9. Comparable figures include 93.3 in Croatia, 101.4 in Portugal, 103.2 in Lithuania, 89.8 in Slovenia, 93.2 in Greece, 100.1 in Italy, and 103.1 in Germany.

Meat Is Cheaper, While Fish Sits Near The Average

Meat prices in Cyprus remain well below the European average. The category recorded an index of 85.5, compared with 106.0 across the EU. Several neighbouring and European markets reported higher levels, including Greece at 95.2, Germany at 112.3, and Luxembourg at 137.0. Portugal was closer to Cyprus at 87.9.

Fish prices, meanwhile, remain broadly in line with the European benchmark. Cyprus recorded an index of 103.2, compared with an EU average of 100.7. Greece stood at 112.7, Denmark at 103.5, Austria at 123.5, and Portugal at 95.4.

What The Wider European Picture Shows

The broader European landscape reveals significant differences between member states. Denmark ranks among the most expensive countries across several food categories, while Poland frequently appears among the most affordable. Spain recorded the lowest prices for oils and fats, while Romania reported the lowest price levels for both fruit and nuts and vegetables.

For Cyprus, the data point to a mixed picture rather than a consistent pricing trend. Dairy products and oils remain comparatively expensive, while fruit, vegetables, and meat are generally more affordable relative to the European average. The figures illustrate how food inflation and pricing pressures continue to affect product categories differently across both Cyprus and the wider European market.

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