New loans decline continues in February, CBC says

New net loans recorded a 22.8% drop in February 2025, reaching €246.1 million compared to €318.7 million in January, according to data released by the Central Bank of Cyprus (CBC).

This marks the second consecutive month of significant decline in new lending.

The decrease is primarily attributed to a sharp drop in large business loans, while the housing loan market showed a slight improvement.

Overall, new loans, including renegotiated ones, fell to €431.8 million from €544.4 million the previous month.

Consumer loans declined to €21.2 million (€19.3 million in net new loans), from €26.5 million in January (€25.2 million in net new loans). Housing loans increased to €152.1 million (€92.8 million in net new loans) compared to €132.6 million the previous month (€87.6 million in net new loans).

Loans to non-financial corporations up to €1 million reached €55.8 million (€42.0 million in net new loans), up from €53.2 million in January (€38.2 million in net new loans). However, loans to non-financial corporations exceeding €1 million saw a sharp decline to €188.1 million (€92.0 million in net new loans), down from €317.4 million in the previous month (€167.7 million in net new loans).

Lending rates up for households, down for businesses

According to the CBC's February data, the interest rate on consumer loans increased to 7.11% from 6.25% in the previous month.

The interest rate on housing loans rose to 4.56% from 4.47%. The CBC clarified that this increase mainly reflects changes in the loan amounts rather than actual hikes in the interest rates applied by individual Monetary Financial Institutions (MFIs).

The interest rate on loans to non-financial corporations up to €1 million fell to 4.66% from 5.08% the previous month. Similarly, the rate on loans to non-financial corporations exceeding €1 million dropped to 4.48% from 4.90%.

Opposite trend in deposit rates

The interest rate on household term deposits of up to one year increased to 1.51%, compared to 1.34% in the previous month.

In contrast, the interest rate on deposits from non-financial corporations decreased to 1.54% from 1.80%.

(Source: CNA)