A decade -long record is recorded by credit in Cyprus by financial institutions as interest rates cuts by the European Central Bank on the one hand and the needs to finance investment on the other lead to new lending.
The increase in new business loans is 57.8% annually in the seven months of 2025, while a double -digit increase of 18.1% is also recorded in household loans.
According to central bank data announced on Wednesday, which was processed by “P”, all of the loans that banks were channeled to households and businesses, except for restructuring, stood in the seven months of 2025 at € 2.9 billion from € 2.1 billion in 20%. In the seven months of 2024, there was a 3.2%increase.
New business loans reached € 2 billion in the first seven months of 2025 from € 1.2 billion in the corresponding period of 2024. This is the highest level since 2005 data available.
At the highest levels of the last decade, new loans to households are up to € 971 million from € 822 million in the seven months of 2024.
In terms of loan restructuring, households amount to € 509.7 million in the seven months of 2025 from € 306.1 million last year and businesses to € 1.6 billion from € 982.9 million in the seven months of 2024.
Reduced loans in July
As for July, net new loans decreased to € 445.3 million (from a total of € 743.5 million new loans) compared to € 642.8 million (from a total of € 959.5 million new loans) last month.
Net new consumer loans increased to € 24.9 million (from a total of € 26.8 million new loans), compared to € 23.2 million last month (from a total of € 24.7 million new loans).
Net new loans to buy a home decreased to € 125.1 million (from a total of € 185.9 million new loans), compared to € 131.4 million last month (from a total of € 186.6 million new loans).
Net new loans to non -financial companies for up to € 1 million declined to € 57.3 million (from a total of € 86.9 million), compared to € 61.9 million last month (from a total of € 90.3 million new loans).
Net new loans to non -financial companies for amounts of more than € 1 million recorded a decrease to € 230.9 million (from a total of € 425.4 million), compared to € 420.6 million last month (from a total of € 643.6 million new loans).
Support from strong liquidity
As the Central Bank has pointed out in the June 2025 financial report, the remarkable increase in new lending is recorded despite the fact that banks continue to apply strict criteria in the approval of loans, maintaining their consistently careful attitude towards credit risks.
The strong liquidity of banks supports funding for households and businesses, indicating, contributing positively to the economic growth and positive course of GDP.
Increase for the first time from 2021
Regarding the demand for loans in the first quarter of 2025, according to the latest survey of the CB of bank lending, net demand for business loans has increased, for the first time since the fourth quarter of 2021, supported by general interest rates and increased demand for funding.
The net demand for household mortgage loans remained unchanged compared to the previous quarter. On the contrary, a further decrease in net demand for consumer and other household loans that, according to research, to reduced costs for the purchase of constant consumer goods and the use of alternative funding, namely borrowing from other banking institutions, was recorded.
According to banks’ expectations for the second quarter of 2025, net demand for businesses and home loans from households is expected to increase further while net demand for consumer and other loans to households is expected to remain unchanged in relation to the previous quarter.