Cyprus’s banking sector experienced a significant acceleration in new loan activity in September 2025, primarily fueled by a massive increase in credit to non-financial corporations. Data from the Central Bank of Cyprus (CBC) also indicated a broad stabilization of interest rates across various loan and deposit categories.
New Lending Volume Jumps
The total value of new loans disbursed by Monetary Financial Institutions (MFIs) saw a substantial rise in September.
- Total New Loans: The aggregate volume reached €770.5 million, a sharp increase from the €420.4 million recorded in August 2025.
- Pure New Loans: Lending that excludes renewals and renegotiations (“pure new loans”) more than doubled, climbing to €447.9 million from €245.5 million in the preceding month.
This notable growth signals a strengthening demand for credit, particularly within the corporate sector.
Business Loans Dominate the Surge
Non-financial corporations were the main recipients of the new credit, accounting for the largest portion of the new lending.
- New loans to corporations totaled €492.5 million.
- Within this segment, large loans (over €1 million) made up €246.7 million of the pure new loan volume, with smaller loans (up to €1 million) adding €62.7 million.
Housing loans also contributed positively to the overall increase, with pure new housing loans rising to €112.9 million (from a total of €165.4 million) in September, up from €96.3 million (total €144.1 million) in August. Pure new consumer credit showed a minor growth, reaching €21.2 million (total €22.6 million).
Interest Rates Hold Steady
The CBC figures indicated that lending and deposit interest rates maintained a general level of stability in September, with minor fluctuations observed across different products.
| Loan Category | September 2025 Rate | Change from August 2025 |
| Housing Loans | 3.63% | Eased (from 3.91%) |
| Consumer Credit | 6.46% | Lowered (from 7.09%) |
| Corporate Loans (>€1M) | 3.79% | Stable (down slightly from 4.30%) |
| Corporate Loans (<€1M) | 4.32% | Increased (from 4.19%) |
Deposit rates saw a marginal increase:
- Household deposits (up to one year maturity) rose from 1.08% to 1.10%.
- Non-financial corporate deposits increased slightly from 1.15% to 1.24%.
Cyprus vs. Euro Area Interest Rate Snapshot
A comparison of average interest rates reveals that Cyprus’s loan rates are closely aligned with the median for the Euro Area, while deposit rates remain significantly lower.
| Category | Cyprus Average Rate | Euro Area Median Rate | Differential |
| Household Loans | 3.93% | 3.91% | Near Parity |
| Corporate Loans | 4.22% | 3.80% | Higher in Cyprus |
| Household Deposits | 0.78% | 1.74% | Significantly Lower |
| Corporate Deposits | 1.08% | 1.94% | Significantly Lower |
Source: Stockwatch.com.cy