Newsroom
The net new loans (excluding restructurings) in Cyprus amounted to €1.73 billion in the first half of 2023, showing a slight annual increase of 1.26%. The continuous interest rate hikes by the European Central Bank significantly slowed down the granting of housing loans.
However, based on the data from the Central Bank of Cyprus (CBC), new loans in June saw a significant decline, dropping to €240 million from €536 million in May. This significant monthly drop is attributed to a high volume of new business loans, amounting to over €1 billion, which accounted for €351 million.
The breakdown for June:
- Housing loans accounted for the majority of the new loans in June, totaling €84.4 million, compared to €104.7 million in the previous month.
- Business loans, which traditionally comprise the largest share of new loans, were limited to €61.2 million in June, down from €351 million in the previous month. This might be due to loan application delays at banks during the Easter holidays in April, causing new loans to be shifted to May and increasing the total for that month.
- Business loans up to €1 million amounted to €42.6 million in June, compared to €48.6 million in the previous month. Other new loans saw a significant increase, reaching €30.1 million from €9.6 million in the previous month.
- New consumer loans remained roughly at the same levels, amounting to €21.5 million in June, down slightly from €22.7 million in the previous month.
Serious slowing down in housing loans:
Based on the CBC data, the continuous interest rate hikes by the ECB, along with an increase in construction costs, hurt housing loan grants in the first half of this year, which totaled €491 million, showing a 29.1% decrease on an annual basis.
On the contrary, corporate loans above €1 million showed an upward trend, amounting to €817.8 million compared to €626.1 million in the corresponding period last year, representing a percentage increase of 30.6%.
Net new corporate loans up to €1 million experienced a 6.8% decrease, totaling €256 million in the first half of 2023, compared to €274.6 million in the same period last year.
Consumer loans saw a 39% increase on an annual basis, amounting to €108 million in comparison to €77.8 million in the corresponding period last year. Additionally, other net new loans from January to June showed a 51.3% increase, reaching €61.3 million, compared to €40.5 million in the same period last year.
