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Cyprus Development Bank Net Income Falls 25% In 2025

Financial Performance Overview

The Cyprus Development Bank Group reported total net income of €17.2 million for 2025, a 25% decline compared with €22.8 million in 2024. The earnings drop was largely attributed to a significant decrease in net interest income driven by lower interest rates and a slight contraction in interest-earning assets.

Declines In Interest Income And Expense

Net interest income fell 28% year-on-year to €13.8 million from €19.1 million, as interest income declined 31% to €17.5 million. At the same time, interest expenses decreased 39% to €3.8 million, largely driven by lower deposit-related costs, while interest paid on client deposits dropped 34%. Expenses linked to loan capital also declined following the non-payment of the perpetual unsecured subordinated note.

Asset Quality And Revenue Mix

The bank’s net interest margin narrowed to 2.54% from 3.44%, while average interest-earning assets decreased 1.3% to €548 million. Non-interest income also declined 6% to €3.5 million, although operating expenses were reduced by 5%, mainly due to lower staffing costs. Staff expenses fell 10% following the absence of one-off costs recorded in the previous year, despite salary increases and a slight reduction in headcount.

Balance Sheet And Liquidity Strength

Total assets decreased 3% to €602 million, primarily reflecting lower loans and advances. Despite the decline, the group maintained strong liquidity levels, with the liquidity coverage ratio standing at 296%, significantly above the regulatory minimum requirement of 100%, although lower than the 348% recorded in 2024. Meanwhile, the net stable funding ratio remained at 236%, while liquid assets increased slightly to €407 million, representing 68% of total assets.

Loan Portfolio And Risk Management

Gross loans and advances declined 11% to €190 million as customer repayments continued exceeding new lending activity. New lending fell 60% to €13.5 million, while performing loans declined 10% to €158 million. The group also reported improvements in non-performing exposure metrics, with the NPE ratio decreasing from 17.7% to 16.9%, while net NPEs declined to €17.9 million and the NPE coverage ratio increased to 44.1%.

Capital Adequacy And Regulatory Compliance

The bank maintained a CET1 ratio of 21.93% and an overall capital adequacy ratio of 27.12%, both remaining comfortably above regulatory requirements. CET1 capital declined 3.58% to €45.6 million, partly due to supervisory adjustments related to legacy non-performing exposures and real estate assets, although the impact was partially offset by lower risk-weighted assets following updated regulatory rules.

Outlook And Strategic Priorities

The group confirmed that its financial statements continue to be prepared on a going concern basis, supported by strong liquidity and capital buffers. Management also pointed to the agreement signed in March with Bank of Cyprus regarding the sale of substantially all performing loans and deposits.

According to the bank, capital and liquidity requirements are expected to remain compliant through 2028, while no dividend will be paid for 2025 as the group continues focusing on strengthening balance sheet resilience, improving asset quality, diversifying income streams and reducing non-performing exposures.

Cyprus Company Registration: Two To Four Days, Unless Security Checks Intervene

Cyprus aims to register companies within two to four working days when applicants submit complete documentation. However, regulatory approvals, sanctions checks, foreign ownership and national security considerations can extend the process or prevent registration.

Energy, Commerce and Industry Minister Michael Damianou outlined the timeframe in a written response to MP Efrem Christou, who asked about company formation procedures and the checks required before approval.

Fast Registration Depends On Complete Documentation

Damianou said authorities seek to process complete applications within two to four working days, regardless of a company’s structural complexity. The timeframe also depends on whether applicants pay an additional fee for expedited processing.

According to the official incorporation requirements, the standard registration fee is €165, rising to €235 for companies without share capital. Expedited processing costs an additional €100.

Applicants must submit an approved company name, a memorandum and articles of association, and forms HE1, HE2 and HE3. Public companies must also provide form HE5.

Regulated Businesses Require Additional Approval

Companies operating in certain sectors must obtain prior clearance from the relevant authorities or professional bodies. These include medical and dental businesses, law firms, insurance and reinsurance companies, and firms supervised by the Cyprus Securities and Exchange Commission.

The Central Bank of Cyprus must also approve company names associated with payment institutions, electronic money and foreign exchange services. Additional restrictions apply to educational institutions using terms such as “university” or “college”, casino operators, broadcasters and wine producers.

Non-profit organisations seeking to register without “Limited” or “Ltd” in their names also require ministerial authorisation.

Sanctions And Foreign Ownership Trigger Extra Checks

Applications involving shareholders, directors or company secretaries subject to EU, UN or US sanctions receive additional scrutiny. Registration can proceed only if the competent sanctions authority does not prohibit it. Damianou noted that US sanctions are considered indirectly but have not been incorporated into Cyprus legislation in the same way as EU and UN restrictions.

Applications involving Turkish interests are also subject to additional review. Under procedures introduced around 20 years ago, the registrar must consult national security services before proceeding with registrations involving Turkish interests or businesses that could threaten the Republic’s security.

Damianou distinguished these cases from applications submitted by Turkish Cypriots, saying there is “no substantial difference” in how their registration documents are examined. Applications may nevertheless be refused if classified information raises concerns about national interests or national security.

Public Servants Face Separate Restrictions

Under Article 65 of the public service law, government employees cannot act as directors, company secretaries or shareholders in private or public companies without prior special permission from the finance minister.

Proposed Law Would Expand Registrar’s Powers

The government is also seeking to strengthen the Registrar of Companies’ authority to address potential security risks. An amendment to the companies law, submitted to Parliament on September 17, would allow the registrar to reject applications, refuse company filings or remove existing businesses from the register on grounds including national security, public order, public interest and the protection of state sovereignty.

The proposal, approved by the Council of Ministers on August 6, remains before the House commerce committee. It would allow authorities to withhold detailed justifications where disclosure could reveal sensitive information, while informing affected companies of the general grounds for decisions.

The bill follows parliamentary discussions about companies controlled by non-EU nationals, particularly those with Turkish ultimate beneficial owners, and possible implications for property ownership through foreign-controlled businesses. Further details are available in the proposed amendment and earlier parliamentary reporting.

Balancing Investment And Oversight

Cyprus is seeking to maintain an efficient company registration process while strengthening checks on ownership, sanctions compliance and potential security risks.

The two-to-four-day target supports the country’s appeal to entrepreneurs and international investors, but the actual timeline depends on the nature of the business, the documentation submitted and any additional regulatory or security reviews required.

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