Central Bank of Cyprus Reports Decline in Deposit and Lending Rates, Surge in Large Corporate Loans

The Central Bank of Cyprus (CBC) announced on Tuesday a decrease in most deposit and lending rates for November, with the notable exception of loans to non-financial corporations exceeding €1 million, which saw a rate increase.

For household time deposits with durations of up to one year, the interest rate dropped to 1.70 per cent in November, compared to 1.76 per cent in October. Similarly, deposit rates for non-financial corporations fell to 1.99 per cent, down from 2.19 per cent in the previous month.

On the lending side, consumer loan interest rates experienced a sharp decline, falling to 6.99 per cent in November from 8.00 per cent in October. Home loan rates also decreased, reaching 4.50 per cent, compared to 4.62 per cent in the preceding month.

For loans granted to non-financial corporations in amounts up to €1 million, the interest rate dropped to 5.01 per cent, a reduction from October’s 5.45 per cent. In contrast, rates for loans to corporations exceeding €1 million rose to 4.97 per cent, an increase from 4.72 per cent in the previous month.

Total new loans in November demonstrated a significant increase, climbing to €635.7 million from €533.8 million recorded in October. Among these, new consumer loans rose to €25.3 million, with €22.3 million categorized as net new loans, surpassing October’s figures of €21.3 million and €20.2 million, respectively.

Loans for home purchases also recorded growth, reaching €129.5 million in November, with €98.5 million in net new loans. These numbers marked an increase from the €115.7 million and €96.1 million registered in October.

Loans extended to non-financial corporations for amounts up to €1 million totalled €73.5 million, with net new loans contributing €57.8 million. These figures were higher than October’s totals of €57.3 million and €41.8 million, respectively.

The most notable rise was seen in loans exceeding €1 million for non-financial corporations, which surged to €398.2 million in November. Of this amount, €154.5 million were net new loans, a significant jump from October’s €333.9 million and €201.8 million.

The CBC’s data highlights evolving trends in Cyprus’s financial sector, with declining rates for smaller loans and deposits and increased lending activity, particularly among larger corporate borrowers.

By fLEXI tEAM