Cyprus Records Surge in Deposits and Loans in June 2023

Deposits in the Cypriot banking system witnessed a notable surge in June 2023, reaching a total of €52.3 billion, marking the second consecutive month of net increase. Liquidity, measured as the difference between deposits and loans, amounted to €27.2 billion during the same period.

Data released by the Central Bank of Cyprus revealed that total deposits recorded a net increase of €399.2 million, excluding changes resulting from reclassifications, foreign exchange, and other adjustments. This substantial increase comes in comparison to a net rise of €164.8 million in May 2023. On an annual basis, the rate of change in deposits reached 2.7 per cent in June, slightly higher than the 2.6 per cent recorded in the previous month.

The key contributors to the rise in deposits were other financial intermediaries, non-financial corporations, and households, which experienced net changes of €241.8 million, €156.9 million, and €23.9 million, respectively. In contrast, insurance companies saw a decrease of €42.1 million in deposits during the same period.

Moving on to loans, the data showed that total loans recorded a net increase of €123.2 million in June 2023, compared to a net increase of €90.6 million in May 2023. Unlike deposits, the annual rate of change in loans reached -1.2 per cent in June, a slight improvement from the -1.3 per cent recorded in May 2023.

The total balance of loans in June 2023 amounted to €25.1 billion. Among the main contributors to the net change in loans were non-financial corporations, which saw a net increase of €78.4 million, and households, with a net increase of €42.8 million. Notably, housing loans accounted for €29.4 million of the increase in household loans during this period.

The data suggests a positive trend in the Cypriot banking system, with growing deposits and a notable increase in loans. However, the modest annual rate of change in loans indicates a cautious approach to borrowing and lending, which could be influenced by various economic factors. The Central Bank of Cyprus will likely continue to closely monitor these developments to assess the overall health and stability of the country's financial sector.

By fLEXI tEAM