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After a tense voting session last week, when the bill to tax bank profits narrowly failed to pass in Parliament, the Bank of Cyprus seems to be stepping up with measures aimed at helping vulnerable communities across the island. While some might wonder if the looming possibility of a tax on profits gave the bank an extra push to implement these support measures, one thing is clear: the bank’s new initiatives are geared toward easing financial burdens for individuals and businesses.
The Bank of Cyprus announced several measures this week, designed to assist customers through interest rate reductions, rewards for consistent borrowers, and special loan schemes. Let’s break down what’s on offer:
Interest Rate Reductions and Rewards for Prudent Borrowers
First up, the Bank of Cyprus is reducing its interest rates in response to the European Central Bank’s (ECB) recent rate cuts. Starting June 2024, the bank will lower its benchmark interest rate by 1.35%, from 4.50% to 3.15%. This reduction means more than 10,000 mortgage borrowers whose loans are linked to the ECB Base Rate will see their monthly payments go down immediately. In addition, 8,000 borrowers whose mortgages are tied to the Euribor rate have already started to benefit from lower rates.
The bank is also rewarding borrowers who have maintained consistent and timely payments. Those with mortgages based on the ECB Base Rate or Euribor, taken before September 2022, will receive a reward equivalent to 0.5% off their interest rate from June to December 2024. Borrowers can choose to receive this reward in either reward points or cash, which will be credited to their bank accounts.
In another effort to assist homeowners, the bank is offering personal loans of up to €5,000 at a low, fixed interest rate of 3% for those looking to improve the energy efficiency of their homes, such as installing solar panels or upgrading equipment.
Support for Young People and Small Businesses
For young people, the bank is launching a new mortgage scheme offering up to €100 million in loans for first-time homebuyers. These loans, with fixed interest rates between 2.85% and 2.90%, will be available for homes worth up to €350,000, with the attractive terms lasting for the first three years of the loan.
Additionally, there’s a 1% interest rate subsidy for young couples and individuals under 41 years of age who benefit from the government's Housing Subsidy Scheme. The same subsidy applies to borrowers in mountain or disadvantaged areas.
Small businesses aren’t left out either. The bank is offering up to 5,000 business loans of up to €5,000 for digital or energy upgrades at a low, fixed interest rate of 3%, helping businesses stay competitive and eco-friendly.
Special Offers for Older Customers
The Bank of Cyprus is also offering several services aimed at making life easier for senior customers (aged 65+). These include free standing bank orders, free cash withdrawals with debit cards, and zero fees for utility bill payments. In the first quarter of 2025, the bank will also waive fees for checkbook issuance and extend free withdrawals from ATMs to older customers.
Support for Young Adults
For young adults (18-25), the bank is enhancing its youth account offering by introducing a new Quick Account product, which will be available via online channels starting in Q1 2025. This account will come with no management fees, a free debit card, and free cash withdrawals worldwide, even in foreign currencies. It’s designed to help young people manage their finances more easily, with no added costs.
Expanding Accessibility in Rural Areas
In a bid to improve accessibility, the bank is working with the government to install more ATMs in rural areas, ensuring that people outside major cities have access to banking services. These new ATMs will be available in select rural areas by the first quarter of 2025.
With these wide-ranging measures, the Bank of Cyprus is making it clear that it is committed to supporting both individuals and businesses during challenging times. Through reduced interest rates, favorable loan terms, and community-focused initiatives, the bank is providing substantial relief to its customers.
It's worth noting that with the anticipated reduction of ECB benchmark and Euribor rates, the total interest rate reductions for Bank of Cyprus customers could exceed €40 million per year. Furthermore, the bank continues to contribute to important social causes, such as supporting the Bank of Cyprus Oncology Centre and various community initiatives, including the IDEA start-up center.
As the Bank of Cyprus demonstrates, it is not just about offering loans and services; it’s about actively participating in the economic and social welfare of Cyprus. Let’s see if these measures help create a positive shift for both individuals and businesses in the coming year.
