CLOSE
Loading...
12° Nicosia,
18 July, 2024
 

Profits soared in Cyprus banking sector in 2023

Higher interest rates and cost-cutting measures were the catalysts for financial success in 2023

Newsroom

The Cyprus banking sector experienced a significant surge in profitability by the end of 2023, as indicated by key financial indicators from the Central Bank of Cyprus (CBC).

Impressive return on equity

The Return on Equity (RoE) ratio for Cyprus banks jumped to 24.6% in 2023, a stark increase from 4.8% in the previous year. This dramatic rise was primarily driven by higher interest rates resulting from the European Central Bank’s restrictive monetary policy.

Increased profits

Total profits after tax and discontinued operations also saw a substantial increase, reaching 2% of total assets by the end of 2023, compared to just 0.3% in December 2022.

Strong capital ratios

The Core Tier 1 capital ratio, which measures a bank's core equity capital compared with its total risk-weighted assets, rose to 21.3% at the end of 2023, up from 17.8% the previous year. Additionally, the overall solvency ratio climbed to 25.5% from 21.3% during the same period.

Cash balances and cost efficiency

Cash and cash balances with Central Banks accounted for 37.8% of total assets at the end of 2023, slightly down from 38.9% in December 2022. This decrease mainly reflects the repayment of Targeted Long-Term Refinancing Operations (TLTROs).

The cost-to-income ratio, a key measure of banking efficiency, improved significantly to 32.7% in December 2023, down from 69.1% at the end of 2022. This improvement was due to both increased net interest income and cost-cutting measures, including reduced staff expenses, which fell to 52.9% of total operating expenses from 55.8% in December 2022.

Comprehensive data coverage

The CBC’s data includes all domestically and foreign-controlled credit institutions, excluding banking branches, providing a comprehensive overview of the sector's performance.

The end-2023 financial results highlight a robust performance for the Cyprus banking sector, indicating strong profitability and improved efficiency.

TAGS
Cyprus  |  banks  |  profits

Business: Latest Articles

X