Cypriot banking sector sees surge in new loans and interest rate shifts in June 2026

In June 2026, the Cypriot banking sector recorded a significant rise in net new loans, which reached €626.2 million compared to €361.9 million in May. This surge was primarily driven by corporate loans exceeding €1 million, which more than tripled to €387.5 million. Meanwhile, mortgage lending remained a key driver of market activity, rising to €152.1 million from €145.5 million in May, while consumer loans increased slightly to €25.1 million.

Despite the rise in lending, deposit interest rates in Cyprus remain among the lowest in the Eurozone, with the average household deposit rate at 1.42% in June compared to the Eurozone average of 2.03%. The Central Bank of Cyprus attributed this to the high liquidity of local banks, noting a Liquidity Coverage Ratio of 310%. There is significant disparity between individual banks, with Ancoria Bank offering the highest deposit rates at 1.66%, while the Bank of Cyprus and the Housing Finance Organization offered lower rates of 0.96% and 0.84% respectively.

Bank of Cyprus reported €1.64 billion in new lending for the first half of 2026, a 2% increase year-on-year. Total new loans across the sector for the half-year reached €2.4 billion, reflecting a 3.9% annual decline despite the strong performance of the mortgage market.