Rising Loan Demand Amid Stable Lending Conditions: Insights from the Cyprus Central Bank Survey

by THEFUTURE.TEAM

September 19, 2025

Increasing Demand Drives Loan Growth

The second quarter of 2025 witnessed a notable increase in net loan demand, spurred by both business and household sectors, according to the latest survey by the Central Bank of Cyprus. This surge is particularly evident in mortgage and consumer loan segments, reflecting a strong appetite across multiple financial channels.

Stable Lending Criteria Amid Competitive Pressures

Despite the rising demand, banks maintained unchanged lending criteria for both businesses and households compared to the previous quarter. The survey details that while the overall terms for new loans—including mortgages, consumer, and other household credit—remained stable, interest rates and bank margins experienced downward pressure. For businesses, lower interest rates on new loans were driven by increased competition and a perception of reduced risk, while similar competitive forces influenced the mortgage segment for households.

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Market Insights and Future Prospects

In the context of ongoing market dynamics, banks anticipate that lending terms for businesses will tighten in the third quarter, even as household lending standards are expected to remain unchanged. This forecast aligns with evolving economic conditions, where sustained loan demand for mortgages and consumer loans is underpinned by favorable interest rates, renewed consumer confidence, and improved housing market outlooks.

Drivers Behind the Demand

The survey highlights that increased business loan demand stems from financing requirements associated with inventory replenishment, working capital, and fixed investments. For households, emerging market trends, including attractive interest rates and a buoyant housing market, are key factors driving the rise in mortgage loan applications. Both segments have witnessed a strong correlation between market sentiment and loan uptake.

Conclusion

As the banking sector navigates a competitive landscape, the findings from the Central Bank of Cyprus underline a robust and stable lending environment in the second quarter of 2025. Businesses and households alike continue to pursue financing opportunities, positioning the market for further expansion as banks adjust their policies in response to shifting economic signals.

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Mercedes-Benz Posts Higher Profit Despite China Slowdown

by THEFUTURE.TEAM

July 29, 2026

Mercedes-Benz reported stronger-than-expected second-quarter results, lifting its shares on Tuesday despite mounting pressure from Chinese automakers and a weaker outlook for sales and revenue.

The earnings provided a boost for Europe’s auto sector, where manufacturers continue to grapple with tariffs, softer demand and intensifying competition from Chinese rivals. Volkswagen, Mercedes-Benz and BMW have all accelerated restructuring efforts in response.

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Cost Discipline Lifts Quarterly Profit

Mercedes-Benz shares rose as much as 5.9% following the results before trimming gains to trade 3.5% higher by 1118 GMT. The company reaffirmed its profit margin guidance for its core passenger car business after reporting an adjusted return on sales of 4.0% for the second quarter, above market expectations and within its 3% to 5% target range.

“In an environment where some automakers are ringing alarm bells on their competitive positioning, Mercedes delivered a clear and confident message,” Morningstar analyst Rella Suskin said.

Second-quarter operating profit increased 22% to €1.5 billion ($1.7 billion), despite a 3% decline in revenue. Lower administrative and research and development costs, together with strong performances from the financial services and vans divisions, supported earnings, while the results also included a €131 million gain related to the planned sale of leasing subsidiary Athlon.

China Remains The Key Pressure Point

Despite stronger profitability, Mercedes continues to face a challenging market environment. Sales in China fell 30% during the second quarter, prompting the company to abandon earlier expectations for stable car sales and group revenue. It now expects both to decline slightly from a year earlier.

BMW also lowered its outlook in June following a deeper-than-expected slowdown in China, highlighting the pressure facing Germany’s premium carmakers. At the same time, Mercedes said Chinese manufacturers are increasingly expanding into European markets, although Chief Executive Ola Kaellenius said their focus remains on higher-volume segments rather than the premium market.

“But that is not a reason to sit back and be relaxed,” he said.

Manufacturing Shift Continues

Mercedes is also reshaping its manufacturing footprint. The company said its German factories will undergo a more aggressive push toward leaner production, although it declined to provide further details while talks with labour representatives continue. Production is also being expanded in lower-cost Eastern European locations, including Hungary, where the company is increasing capacity at its Kecskemet plant, as well as in Poland.

Chief Financial Officer Harald Wilhelm said the full-year margin for the passenger car division is expected to come in at the lower end of the company’s guidance range, reflecting a higher share of electric vehicle sales in Europe, which remain more expensive to produce and continue to weigh on profitability.

“We must continue to work flat out to reduce costs so that we can remain competitive on the prices of our products,” Kaellenius said.

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