Cyprus Deposit Rates Continue to Trail Eurozone Averages, Central Bank Reports

The Central Bank of Cyprus (CBC) has indicated that deposit rates in Cyprus remain below those observed across the eurozone, even as lending rates present a more mixed picture across different categories.

According to the CBC’s latest data, the average interest rate for new housing loans in Cyprus stood at 3.04 per cent in February, compared with a higher eurozone average of 3.41 per cent. For household deposits with a maturity of up to one year, the average rate reached 1.19 per cent, still significantly below the eurozone’s 1.78 per cent.

The central bank reported that the lowest interest rate for new mortgage agreements, irrespective of the initial rate fixation period, was offered by the National Bank of Greece at 2.01 per cent. At the opposite end of the spectrum, Societe Generale recorded the highest rate for new housing loans at 5.14 per cent, underscoring considerable variation among financial institutions.

The second highest rate in this category was 3.41 per cent, offered by the Housing Finance Corporation, further highlighting disparities within the domestic market.

For existing housing loans, the average interest rate in Cyprus stood at 3.50 per cent, notably higher than the eurozone average of 2.46 per cent. Differences among banks in this segment were less pronounced, with the Bank of Cyprus recording the highest rate at 3.73 per cent, while the lowest rate of 2.96 per cent was offered by the Housing Finance Corporation.

In the business lending sector, the average interest rate for new loans of up to €1 million reached 4.06 per cent. Eurobank provided the lowest rate at 3.76 per cent, whereas Banque SBA recorded the highest at 6.34 per cent. For new business loans exceeding €1 million, the average rate stood slightly lower at 3.85 per cent. The Bank of Cyprus offered the most competitive rate at 2.89 per cent, while the Cyprus Development Company posted the highest rate at 4.50 per cent.

Regarding existing business loans with maturities exceeding five years, the average interest rate in Cyprus was 4.06 per cent, compared with 3.08 per cent across the eurozone. Societe Generale reported the highest rate in this category at 4.91 per cent, while Eurobank offered the lowest at 3.79 per cent.

On the deposit side, the CBC reiterated that interest rates in Cyprus consistently lag behind those in the eurozone. For new household term deposits of up to one year, the average rate was 1.19 per cent, compared with 1.78 per cent in the eurozone. The highest rate for household deposits was offered by the National Bank of Greece at 1.61 per cent, while the Bank of Cyprus recorded the lowest at 0.81 per cent.

The gap widens further for existing household term deposits of up to two years. In Cyprus, the average rate stood at 0.76 per cent, significantly below the eurozone average of 1.73 per cent.

The Bank of Cyprus offered the lowest rate in this category at 0.48 per cent, while the highest rate reached 1.65 per cent from Jordan Kuwait Bank, reflecting notable variation across institutions.

For non-financial corporations, the average interest rate for new term deposits of up to one year stood at 1.19 per cent, again trailing the eurozone level of 1.90 per cent. The Housing Finance Corporation offered the lowest rate at 0.95 per cent, while the National Bank of Greece provided the highest at 1.61 per cent.

Finally, in the category of existing corporate term deposits with maturities of up to two years, the average rate in Cyprus stood at 1.05 per cent, compared with 2.01 per cent in the eurozone. Societe Generale offered the lowest rate at 0.82 per cent, while the highest rate was recorded at 1.45 per cent by the National Bank of Greece, concluding the central bank’s overview of lending and deposit trends.

By fLEXI tEAM