Cyprus banking sector performance in the first four months of 2026

Total new loans granted by Cypriot banks during the first four months of 2026 fell by 9.3% annually to €1.4 billion, down from €1.5 billion in the same period of 2025. While overall demand remains resilient, businesses have been cautious, leading to a double-digit decline in business loans. Conversely, new household loans increased by 14.8% to €571.8 million, driven by a surge in mortgage lending, which reached its highest level since 2022 at €459.6 million. This growth in mortgages is attributed to the downward trend in interest rates observed since 2024. Consumer loans also experienced a slight decrease to €85.4 million, while household debt restructurings dropped to €181.4 million. Additionally, the European Banking Authority reported that the share of 'Stage 2' loans in Cyprus decreased to 4.9% at the end of March 2026, down from 5% in December 2025 and 5.6% in March 2025. Despite a slowdown observed in April 2026 compared to March, banks maintain that overall demand for credit remains stable.