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.
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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.
