Interest Rates for Loans and Deposits Diverge
In the heart of the Mediterranean, Cyprus' credit market is experiencing one of its busiest years in more than a decade. New lending activity surged in 2025, with €2.9 billion issued in fresh loans between January and July.
Corporate loan demand picked up in early 2025, driven by investment activity. Corporate lending showed mixed movements in July, with business lending increasing by 57.8% year-on-year to €2 billion. However, corporate loan rates stood at 4.31% in July 2025, higher than the eurozone's 3.79%. Loans over €1 million in corporate lending climbed to the same level from 4.04% in July 2025, while loans under €1 million fell to 4.29%. Notably, housing loans and large corporate lending contracted sharply in July.
On the household front, household lending climbed by 18.1% to €971 million. Household term deposits up to one year dropped to 1.08% in July 2025. Household loan rates eased slightly to 3.87% in July 2025, but consumer loan rates increased to 7.40% during the same period. Net new loans fell to €445 million in July, down from €643 million in June. Consumer lending posted a modest monthly rise to €24.9 million in July.
Restructured loans were a significant part of the picture. For households, they amounted to €510 million in the first seven months of 2025, while for businesses, they totaled €1.6 billion over the same period.
Despite the contraction in housing loan rates, they still averaged 4.05% in July 2025, higher than the eurozone's 3.96%. The search results do not provide specific information about which entity granted the most loans to companies in Cyprus between January and July 2025.
Corporate deposits in Cyprus ticked up to 1.21% in July 2025, and total deposits stood at €56.6 billion in July 2025. As the year progresses, the credit market in Cyprus continues to demonstrate resilience and adaptability, reflecting the broader economic trends in the region.
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