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Cyprus Leads European Retail Sales With Robust Growth In September 2025

Cyprus has established itself as a European frontrunner by reporting a double-digit surge in retail sales for foods, beverages, and tobacco in September 2025. This robust performance has not only reinforced consumer confidence across the island but has also marked the most significant retail volume increase (10.4%) among key European markets. Notably, the dynamic return of Cypriot consumers contrasts sharply with more modest gains recorded across the European Union.

Data Insights And Consumer Resurgence

According to recent figures released by Eurostat, the retail volume index for the food, beverages, and tobacco sector has risen by 0.5% across the European Union compared to the same month last year, with a more pronounced increase of 1.0% within the eurozone. Moreover, 15 out of 25 EU nations with available data showed an annual uplift in retail sales for these products during September 2025. This indicator, which adjusts for inflation to highlight genuine sector activity, effectively demonstrates shifts in the quantity of goods sold irrespective of price changes.

Comparative Market Trends Across Europe

Breaking down the performance across various EU countries, the index climbed by 4.5% in Spain, 4.4% in Malta, and 3.8% in Luxembourg, among others. In contrast, several nations experienced declines, with Estonia posting a drop of 4.8% and Romania by 4.5%. These diversified trends underline the unique drivers behind Cyprus’s standout performance, particularly given that retail trade contributes approximately 5% of the overall value added within European economies.

Historical Recovery And Post-Crisis Trends

Eurostat’s analysis further reveals that after the slow but steady recovery following the 2008–2009 financial crisis, retail trading in the EU began rebounding noticeably as economic pressures eased. The unprecedented downturn during the initial pandemic months of March and April 2020 was counterbalanced by a swift recovery starting in May 2020, with pre-crisis levels restored by late summer. Although the subsequent quarters of 2020 and early 2021 saw modest dips, these changes were less severe than the initial COVID-19 impact.

Shifts In Food And Non-Food Sales

Noteworthy is the resilience observed in the food, beverage, and tobacco sector, which weathered the COVID-19 crisis more favorably than non-food retail segments. While sales volumes for foods remained relatively stable from 2022 through 2025, fuel sales did record a recovery during the summer and autumn seasons, albeit without fully returning to pre-crisis benchmarks. Conversely, non-food goods trading has gradually trended upward in recent years, signaling a cautious yet consistent market revival.

Bank of Cyprus Upgrade Signals Fresh Optimism For Greek And Cypriot Banks

Regional Banks Enter A More Favorable Cycle

Bank of Cyprus and Eurobank are well positioned to benefit from a renewed re-rating of Greek and Cypriot bank stocks, according to Cyprus-based investment firm Roemer Capital, which upgraded Bank of Cyprus to a buy rating and reaffirmed its positive view on Eurobank.

The firm cited easing geopolitical tensions, resilient economic growth in Greece and Cyprus, lower funding costs and Greece’s expected transition to developed-market status as the main factors supporting the sector.

Roemer Capital also lowered its cost of equity assumptions, updated its forecasts following first-quarter 2026 results and extended its valuation horizon to the end of 2027, raising target prices across its banking coverage.

Bank Of Cyprus Gets The Largest Upgrade

Bank of Cyprus received the biggest revision, with Roemer Capital upgrading the stock from hold to buy and setting a target price of €11.10, implying potential total upside of 27%.

The firm highlighted the bank’s strong capital generation, profitability and projected 100% dividend payout, describing it as the strongest capital-return story among the banks under coverage. Roemer Capital maintained its buy rating on Eurobank, assigning a target price of €4.90 and forecasting potential upside of 28%. The report said the bank is well placed to benefit from loan growth, improving operating performance and merger-and-acquisition synergies.

National Bank of Greece and Piraeus Bank also retained buy ratings, with expected returns ranging from 25% to 36%. Optima Bank was upgraded to buy, while Alpha Bank remained at hold on valuation grounds.

Why Growth Still Sets The Region Apart

According to Roemer Capital, Greek and Cypriot banks continue to benefit from stronger economic fundamentals than many western European peers. The report pointed to faster economic growth, healthier balance sheets, low levels of non-performing exposures, capital ratios approaching 20% and strong customer deposit bases.

Analysts expect performing loans across the sector to grow at a compound annual rate of 6% to 8% through 2028, supported by private investment, digitalisation, green manufacturing, supply-chain expansion and a gradual recovery in household lending.

The report also said the conclusion of lending under the EU Recovery and Resilience Facility is unlikely to materially affect credit growth, as banks have already shifted back towards traditional commercial lending. Roemer Capital expects Euribor to remain between 2.2% and 2.5%, a level it believes should support both lending activity and net interest margins.

Geopolitics, Valuation And Market Structure Support The Case

The report said improving geopolitical conditions have strengthened the investment outlook, noting that Brent crude prices have largely returned to pre-war levels while Greek government bond yields have stabilised at around 3.5%. Although geopolitical risks remain, Roemer Capital believes the likelihood of a major inflationary shock or significant pressure on bank profitability has eased.

Another important catalyst identified by the firm is Greece’s expected promotion to developed-market status by FTSE Russell, STOXX and MSCI over the coming months.

According to the report, the reclassification should improve liquidity and attract a broader base of international investors. Roemer Capital also said Euronext’s acquisition of the Athens Exchange is expected to strengthen market infrastructure and increase international visibility, particularly for Bank of Cyprus and Optima Bank.

The firm noted that Bank of Cyprus has already benefited from its Athens listing, with average daily trading value increasing from less than €400,000 before its September 2024 move to nearly €6 million afterwards.

Economic Momentum Remains A Core Tailwind

Roemer Capital said both Greece and Cyprus have moved beyond post-crisis recovery and are now supported by private-sector-led growth. For Cyprus, the report highlighted recent tax reform and efforts to simplify the legal and regulatory framework, while also noting that limited foreign banking competition continues to support domestic lenders.

Overall, Roemer Capital expects Greek and Cypriot banks to remain well-positioned for profitable loan growth over the coming years.

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