Cyprus banking sector updates for September 2026

In September 2026, the Central Bank of Cyprus reported an increase in deposit interest rates alongside a decrease in interest rates for consumer and housing loans. Household term deposit rates rose to 1.62% from 1.35% in August, while rates for non-financial corporations climbed to 1.70% from 1.56%. Conversely, consumer loan interest rates dropped to 6.45% from 7.12%, and mortgage rates decreased to 3.88% from 4.16%. Despite the rise, the Central Bank noted that Cypriot deposit rates remain among the lowest in the Eurozone, attributing this to high banking liquidity and the limited scope of the domestic market.

Data released by the Central Bank on November 3, 2026, highlighted a significant trend of loan restructurings within the banking market. Total banking contract activity reached €896.8 million, with €596.2 million in new loans and €300.6 million in restructurings. Consequently, approximately 33.5% of total banking activity involved renegotiating existing terms to improve borrower sustainability. While new borrowing increased, a significant portion of banking activity remains focused on modifying existing debt to help households and businesses manage the ongoing costs of borrowing.