Cyprus banks reported a significant surge in new lending in December 2025, with pure new loans more than doubling to €625.0 million from €256.3 million in November, according to statistics released by the Central Bank of Cyprus in its Monetary and Financial Statistics.
The most significant development was in lending to non-financial corporations for amounts exceeding €1 million, which jumped to €406.4 million (from a total of €685.0 million) from €69.6 million (from a total of €320.8 million) the previous month.
New loans for house purchases also rose, reaching €135.4 million (from a total of €178.1 million) compared with €113.4 million (total €155.7 million) in November, while pure new consumer credit declined to €17.2 million (total €18.2 million) from €20.4 million (total €23.4 million). Pure new corporate loans up to €1 million increased to €60.3 million (total €92.5 million) from €48.3 million (total €59.6 million).
The Central Bank noted that these figures cover only “pure” new loans and exclude renegotiated or refinanced contracts.
Deposit rates up, mixed trends in lending rates
Regarding interest rates, deposit rates for new business continued to rise modestly. The average rate on household deposits with an agreed maturity of up to one year increased to 1.20% from 1.13%, while the corresponding rate for non-financial corporations increased to 1.27% from 1.17%.
Lending rates showed mixed movements. The interest rate on consumer credit rose to 7.22% from 6.95%. In contrast, the rate on loans for house purchase fell to 3.78% from 3.86%, a decline the Central Bank attributed partly to shifts in the composition of the housing loan portfolio (which includes loans for primary residences, vacation homes, and other property types with varying risk profiles) rather than uniform rate reductions across institutions.
Corporate borrowing costs eased slightly. The rate on new loans up to €1 million decreased to 4.32% from 4.39%, and the rate on loans over €1 million fell to 4.42% from 4.50%.
Cyprus lending rates remain broadly aligned with euro area medians. For outstanding loan amounts, the spread relative to the eurozone median is zero for households and 0.3 percentage points for non-financial corporations. On new business, the weighted average rate for household house purchase loans stands -0.3 percentage points below the eurozone median, while corporate new lending is 0.6 percentage points above.
Deposit rates in Cyprus, however, remain on the low side compared to the euro area, both for outstanding and new business. The Central Bank linked this to persistently high excess liquidity in the Cypriot banking system—one of the highest in the eurozone—and a relatively narrow banking sector. Indicative of the liquidity position, Cyprus’ Liquidity Coverage Ratio (LCR) stood at 319% in December 2025, well above the European Union median of 191% and mean of 161% recorded in September 2025.
(Source: CNA)
