Cyprus Lawmakers Back Small Business Banking Reform

House Vote Reinforces Legislative Intent

Cyprus parliament rejected President Nikos Christodoulides’ referral of a law on small business bank accounts, with 22 votes against and 20 in favor. That outcome confirms parliamentary support for reforms targeting banking access for very small enterprises.

Legislative Overhaul For Economic Inclusivity

The law addresses fees on payment accounts for very small businesses and introduces measures to simplify switching between banks. It applies to a segment representing about 95% of businesses in Cyprus. Measures aim to improve access to basic banking services and reduce administrative barriers. Changes are designed to support small business activity.

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Balancing Consumer Protections And Legal Boundaries

Legal advisors said the bill extends consumer-type protections to very small businesses through simplified procedures and clearer terms. This approach seeks to align banking access rules with existing consumer standards. Concerns were raised about potential legal issues related to differences between consumers and business entities under EU law. These distinctions may affect how the law is implemented.

Sector Concerns And Industry Implications

The Association of Cyprus Banks said expanding consumer definitions to include businesses and self-employed individuals could create legal and competitive challenges. The group warned of possible conflicts with EU directives. Industry representatives added that such changes could affect the position of Cypriot banks relative to other EU markets. The issue remains under discussion.

Path Forward

Kyriacos Hadjiyiannis, chairman of the House trade committee, said the legislation must be applied in a proportionate manner. Following rejection of the presidential referral, the law will proceed without changes. Additional amendments related to consumer protection are expected to be reviewed separately based on committee recommendations.

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Greek And Cypriot Banks Propel Economic Growth With Aggressive Credit Expansion

by THEFUTURE.TEAM

May 25, 2026

Robust Q1 Growth Sets The Stage

Banks in Greece and Cyprus are accelerating lending activity, with total credit expansion projected to approach or exceed €15 billion in 2026. The increase is reinforcing the banking sector’s role in supporting profitability and broader economic growth across the region.

Targeted Lending Initiatives And Sector Performance

According to reports by Greek business outlet Newmoney, banks are increasingly relying on credit expansion to sustain earnings growth as interest rate dynamics shift across Europe. First-quarter results already point to strong momentum in lending activity.

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Eurobank has set a target of €3.8 billion in credit expansion this year. National Bank of Greece and Piraeus Bank are each targeting €3 billion, while Alpha Bank aims for €3.5 billion. Smaller lenders are also expanding aggressively, with CrediaBank targeting €1.2 billion and Optima Bank aiming for €1.1 billion.

Notable Banking Results Across Markets

First-quarter results underline the scale of the lending rebound. Banks that have reported Q1 figures recorded cumulative credit expansion of €4.7 billion. Piraeus Bank increased its loan portfolio to €38.6 billion, while net credit expansion reached €1.3 billion across major business segments. At National Bank of Greece, new loan disbursements rose 50%, contributing to net credit expansion of €500 million.

Meanwhile, Eurobank reported a 9.8% increase in net credit expansion to €1.1 billion. In Cyprus, Bank of Cyprus recorded Q1 lending of €829 million, up 9% compared with the end of 2025, while Optima Bank posted a 27% year-on-year increase in loan disbursements to €1 billion.

Sectoral Dynamics And Asset Quality Improvements

A recent report from UBS showed that business lending remained the strongest growth driver in March, increasing 10.9% year-on-year. Consumer lending rose 7.7%, while housing loans increased 1.1%. Asset quality also continued to improve. Non-performing loans declined to 3.3% in Q4 2025, down 30 basis points from the previous quarter, reflecting the sector’s ongoing balance-sheet clean-up.

Despite the strong lending momentum, profitability remained broadly stable in the first quarter. Combined net profits at major banks, including National Bank of Greece, Piraeus Bank, Eurobank, Optima Bank and Bank of Cyprus, totaled €1.12 billion, representing a marginal year-on-year decline of 0.27%.

Profitability And Revenue Breakdown

Profit trends varied across institutions during the quarter. Net profit at National Bank of Greece declined 9.9%, while Piraeus Bank reported a 1.42% decrease. By contrast, Eurobank increased profitability by 5.3%. In Cyprus, Bank of Cyprus reported a 3% increase in profit, while Optima Bank posted a 22% rise. Across the sector, net interest income increased 1.4% to €1.93 billion, although performance differed among individual banks. Fee income recorded stronger growth, rising 20% year-on-year to €590 million.

Long-Term Trends And Strategic Impact

Over the past year, listed banks in Greece and Cyprus generated combined post-tax profits of €5.458 billion, up 15.4% from the previous year. During the same period, net interest income declined 4.2% to €9.307 billion, reflecting pressure from changing rate conditions.

Balance-sheet quality continued to strengthen as non-performing loans fell to €5.7 billion, down 5.2% compared with December 2024. Since March 2016, banks in the two markets have reduced non-performing exposures by an estimated €101.5 billion, equivalent to a cumulative decline of 94.7%.

The sustained improvement in asset quality, combined with expanding loan portfolios, is reinforcing the sector’s role in financing business activity and economic recovery across Greece and Cyprus.

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