Government expenditure for financial support programs saw a sharp decline last year as the state wound down its commitments to interest rate subsidies and non-performing loan (NPL) management. According to the latest figures from the General Accounting Office of the Republic, total payments for these programs fell to €13.4 million in 2025, a significant decrease from the €24.4 million spent in 2024.
This nearly 45% reduction in spending suggests that many of the temporary relief measures introduced during previous periods of high interest rates and economic instability are now maturing or reaching their conclusion.
Interest Rate Subsidies: A 7.9 Million Euro Reduction
The bulk of the state’s financial support was directed toward interest rate subsidies, which cost the government €12.8 million in 2025. This is a substantial drop from the €20.7 million recorded the previous year.
The Bank of Cyprus remained the primary recipient of these state funds, receiving approximately €6.8 million, followed by Hellenic Bank at €3.1 million. Other significant payments were distributed among several local institutions:
| Financial Institution | 2025 Subsidy Received |
| Bank of Cyprus | €6,810,772 |
| Hellenic Bank | €3,106,625 |
| Alpha Bank Cyprus | €773,010 |
| Eurobank Cyprus | €596,309 |
| Housing Finance Org. | €529,389 |
| AstroBank | €513,080 |
Smaller amounts were also allocated to Ancoria Bank, Eurobank Ergasias, and the National Bank of Greece (Cyprus).
NPL Management Costs Plummet
The most dramatic percentage decrease occurred within the NPL Management Plan. State payments for these bad debt schemes fell from €3.7 million in 2024 to just €585,295 in 2025.
The Housing Finance Organization received the majority of this remaining support (€540,049), while Hellenic Bank accounted for the rest. Notably, KEDIPES, which received over €2.1 million in 2024, did not appear in the 2025 expenditure list for this specific category, further driving the total cost down.
Fiscal Impact and Institutional Shifting
The reduction in these payouts reflects a normalizing financial environment. As older subsidy agreements expire and the volume of loans requiring state-backed management plans decreases, the Republic is seeing a significant “fiscal dividend” that can be redirected toward other infrastructure or social projects.
The General Accounting Office notes that these figures represent the final audited grants and donations made under these specific frameworks for the 2025 fiscal year.
Source: Stockwatch.com.cy