The Central Bank of Cyprus has released updated aggregate data for the domestic banking sector, showing a decline in profitability in 2025, even as total assets expanded and capital buffers strengthened.
According to the data, sector-wide profits fell by €165 million, or 13.9%, to €1.024 billion in 2025, down from €1.189 billion a year earlier. The CBC attributed the drop primarily to a reduction in net interest income (NII), reflecting changing financial conditions and pressure on core banking revenues.
Despite weaker earnings, the sector’s balance sheet continued to grow. Total assets increased by €4.357 billion, or 6.6%, reaching €69.961 billion at the end of December 2025, compared with €65.604 billion in the previous year. The expansion was mainly driven by higher volumes of loans and advances, as well as increased holdings of debt securities.
Capital adequacy indicators showed further improvement. The Common Equity Tier 1 (CET1) ratio rose by 1.1 percentage points to 25.8% in December 2025, up from 24.7% a year earlier. The increase was supported by higher CET1 capital alongside a reduction in total risk exposure.
(Source: CNA)
