Surge in New Corporate Loans Drives Total New Loans in Cyprus

According to the Central Bank of Cyprus (CBC), there was a significant surge in new corporate loans exceeding €1 million in May 2023, reaching a total of €599.1 million. This robust growth contributed to the overall increase in new loans in Cyprus, which totaled €1.07 billion compared to €473.9 million in the previous month.

The CBC's report revealed that new consumer loans also experienced an upswing, reaching €29.2 million compared to €18.0 million in the previous month. Furthermore, new housing loans saw a notable rise, reaching €170.9 million from €118.9 million previously.

New loans to non-financial corporations for amounts up to €1 million witnessed an increase to €89.5 million, compared to €60.1 million in the previous month. In addition, new loans to non-financial corporations exceeding €1 million demonstrated substantial growth, amounting to €753.4 million, up from €269.3 million.

The CBC's report also highlighted the main developments in interest rates for new deposit and loan contracts. The interest rate for household deposits with a maturity of up to one year increased to 0.79% from 0.41% in the previous month. Similarly, the corresponding interest rate for non-financial corporations' deposits rose to 1.19% from 0.73% previously.

On the loan side, the interest rate for consumer loans experienced a slight increase to 4.97% from 4.85% in the previous month. However, the interest rate for housing loans decreased to 4.21% from 4.45%. As for loans to non-financial corporations for amounts up to €1 million, the interest rate rose to 5.37% from 5.31% in the previous month. In contrast, loans to non-financial corporations exceeding €1 million saw an increase in the interest rate to 6.35% from 5.41%.

The notable growth in new loans to companies reflects increased economic activity and business expansion in Cyprus. Companies are taking advantage of financing opportunities to pursue their growth plans. This surge in lending activity bodes well for the Cypriot economy, indicating growing confidence among businesses and a positive outlook for economic development in the country.

By fLEXI tEAM