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Cypriot banks are starting 2025 on a high note, collecting credit upgrades from major international rating agencies and setting the stage for wider economic benefits that could reach the average citizen.
According to Kathimerini's Panayiotis Rougalas, the latest upgrade came just this week when Moody’s raised the Bank of Cyprus’ long-term deposit rating to A3. That follows similar nods from Fitch and S&P in recent months, marking a powerful shift in how the international financial world views Cyprus and its banking system.
And it’s not just Bank of Cyprus in the spotlight. Hellenic Bank also earned a boost in March, moving up in Moody’s and Fitch rankings as well. The trend is clear: confidence in Cyprus’ banks and its economy is growing fast.
Why this matters to the rest of us
At first glance, credit ratings might sound like dry financial jargon. But they play a big role in everyday life. As Fanos Vladimirou, Senior Investment Specialist at Athlos Capital, put it, “When a bank gets upgraded, it means the world’s top analysts believe it’s on solid ground financially. That makes investors more willing to trust it with their money and gives the bank access to cheaper borrowing.”
Cheaper borrowing for banks could mean lower interest rates for businesses and individuals. That means more affordable loans, easier financing for new projects, and a stronger push for economic growth. It could also mean banks are more willing to lend, fueling everything from homeownership to small business expansion.
“There’s a ripple effect,” says Vladimirou. “Better ratings boost trust. More trust means more liquidity. And more liquidity helps the real economy, new jobs, new investments, and a healthier financial system overall.”
A boost 13 years in the making
These upgrades didn’t come out of nowhere. In fact, Cyprus has been slowly but steadily rebuilding its financial reputation since the 2013 financial crisis. The country’s own credit rating was recently bumped back into the ‘A’ category after nearly 13 years, an achievement that set the stage for the banks to follow.
During 2024, only five Eurozone countries saw rating upgrades from major agencies. Cyprus was one of them.
That’s no small feat.
According to analysts, these upgrades show the international community sees Cyprus as a safer, more attractive place to invest. That brings in foreign capital, helps modernize infrastructure, and makes it easier for local institutions, like banks, to thrive.
What’s next?
May is expected to be another key month. S&P will reassess Cyprus’ national rating on May 16, followed by Moody’s and Fitch a week later. If the trend continues, Cyprus could solidify its standing as one of the Eurozone’s comeback stories.
For now, the country’s top banks are already feeling the momentum, and so might the rest of us, in the form of lower loan rates and a more active economy.
In other words, what’s good for the banks might soon be good for your wallet, too.
