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Cyprus Poverty Risk Holds At 17.1% As Older Population Remains Most Exposed

Overview Of Arope Findings In Cyprus

Around 167,000 people in Cyprus, or 17.1% of the population, were at risk of poverty or social exclusion in 2025, according to data from the Cyprus Statistical Service. The figure is based on the EU’s AROPE indicator and remains broadly stable compared to the previous year.

Disparities Across Gender And Economic Factors

The indicator covers households below the poverty threshold, those facing severe material and social deprivation, and those with very low work intensity. While the overall rate has not changed significantly, differences across groups remain.

Women recorded a higher risk rate at 18.7%, compared to 15.5% for men. At the same time, the poverty risk indicator increased slightly to 14.9% from 14.6%, while the share of households with very low work intensity remained at 4.2%. Severe material and social deprivation declined to 2.2% from 2.5%.

Income Threshold Adjustments And Social Transfers

Income thresholds increased, reaching €13,240 for single-person households and €27,803 for two adults with two children under 14, up 6.8% compared to 2024. Median disposable income for single-person households also rose, from €20,667 to €22,067. Social transfers continue to play a key role. Once pensions and benefits are included, the poverty rate decreases by 18.7 percentage points.

Comparative Analysis With EU And Local Context

The EU average AROPE rate stood at 21% in 2024, placing Cyprus below the EU level overall. Lower risk levels were recorded among younger and working-age populations, with 14.8% for those under 18 and 13.8% for those aged 18 to 64. However, the picture differs for older groups. In Cyprus, 31.5% of people over 64 are at risk, compared to an EU average of 19.2%.

Regional Comparisons And Policy Implications

In Greece, 27.5% of the population was at risk in 2025, an increase of 0.6 percentage points, driven mainly by higher material and social deprivation. The rate among children reached 29.6%. Despite lower income thresholds, social transfers reduced the theoretical poverty rate in Greece from 43.9% to 19.6%.

The Imperative For Targeted Social Policies

The data show that overall poverty risk in Cyprus remains stable but uneven across groups, with older populations facing higher exposure. Addressing early-stage poverty remains a key focus for policymakers, particularly in efforts to reduce long-term vulnerability.

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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