Cyprus Banks Beat EU Benchmarks As NPL Ratio Drops

by THEFUTURE.TEAM

February 18, 2026

The Central Bank of Cyprus has unveiled compelling improvements in the nation’s banking sector. As of December 31, 2025, the non-performing loans (NPL) ratio has fallen below the European Union average for the first time since 2014, marking a pivotal shift in asset quality management.

Asset Quality Convergence With European Peers

Excluding loans and advances to central banks and credit institutions, the NPL ratio declined sharply from 4.5% at the end of September 2025 to 3.2% by December. Under the European Banking Authority Risk Dashboard methodology, which incorporates these specialized exposures, the ratio likewise fell to 1.6% from 2.3%, reinforcing the sector’s progress toward aligning with EU standards.

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Strategic Adjustments And Provisioning Dynamics

Despite the overall improvement, the coverage ratio for non-performing loans with provisions dropped from 68.5% in September 2025 to 62.3% by December 2025. This adjustment reflects a recalibration in provisioning levels as banks streamline their balance sheets. Additionally, total restructured loans amounted to €0.8 billion by the end of December, with €0.3 billion remaining classified as non-performing, illustrating both the successes and ongoing challenges in asset management.

Implications For Sectoral Stability

This achievement is a significant milestone, indicative of the banking sector’s enhanced risk management practices and improved asset quality. By narrowing the gap with European peers, the CBC underscores a commitment to maintaining financial stability and bolstering investor confidence in the region’s banking system.

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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.

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