The situation in the Middle East region and how it affects both the Bank of Cyprus and the economy more broadly, was commented on by the Bank's CEO, Panicos Nicolaou, who also referred to the messages the organisation receives from tourism stakeholders.
In his statements during the presentation of the Bank's financial results for the first quarter on 11 May, and when asked to say how much the Bank of Cyprus and the economy are expected to be affected by geopolitical developments, Nicolaou said that "no one can know how things will progress. The economy of Cyprus is being affected more broadly, there are indications of higher interest rates, but so far there is resilience."
"To the extent that this will create a recession in Europe or an increase in interest rates, there will be some impact, but for now I don't see it being particularly large. Of course, the impact will also depend on the duration, that is, whether it will continue for three months or six months and at what intensity it will continue. There are things that you certainly cannot evaluate and it is very risky to predict," he stressed.
According to Nicolaou, however, "the most important thing, however, is to monitor developments and have cushions, such as capital and profitability, so that you can make the right decisions at the right time. Therefore, what we all need to do is monitor developments and make decisions for the future based on what we see and the potential of the Cypriot economy."
"But you cannot know how this situation will develop, such as whether oil will go to $150 a barrel or remain at $100 or $90," he said, noting that we must keep in mind what the rating agencies have said, that "the economy of Cyprus is small, flexible, that the growth rate is quite good compared to other countries, that the public debt is low, that we have almost full employment conditions, which are good elements to manage the crisis with the right decisions, if and when such a need arises."
Asked, moreover, to say whether the Bank has received any messages from tourism operators and whether lending has stopped, the CEO of Bank of Cyprus stated that "there is a concern among tourism operators regarding the issue of income and profitability in 2026, but as a bank we have not received any requests, nor are we particularly concerned about our loan portfolio."
"We had two very good years and there are a lot of cushions. It may not be the same year as last year when we had a record, but close to the year before, but since we consider it to be something temporary, even if some people face some problems, the Bank has the liquidity to help them, but for now - I repeat - we have nothing before us. In other words, we do not have any requests," he added.
"It is early of course, but it should be known that over 70% of the country's tourist flow is between the months of May and September. It will be a difficult year for tourism, but for now we do not have anything in front of us," Nicolaou concluded.
(Source: InBusinessNews)
