Interest rates on deposits and loans continue to show significant differences between Cyprus and Greece, with Cypriot banks generally offering lower deposit rates than their Greek counterparts. However, loan rates in both countries remain above the eurozone average.

In Cyprus, the two largest banks, particularly the Bank of Cyprus, provide deposit rates below the market average. This indicates that these institutions maintain sufficient liquidity and therefore do not require new deposits unless they come at a minimal cost. The trend is even more pronounced in Greece’s major banks, where the National Bank of Greece offers a deposit interest rate as low as 0.01 per cent, regardless of the deposit amount.
Other major Greek banks also maintain near-zero deposit rates, with the average across the sector falling below 1.67 per cent. Data from the Central Bank of Cyprus shows that corporate deposits follow a similar pattern. The Bank of Cyprus provides an average rate of 1.69 per cent, lower than the market average of 1.94 per cent, whereas Hellenic Bank surpasses the average at 2.14 per cent.
Overall, deposit interest rates in Cyprus remain lower than in Greece and significantly below the eurozone average.
When it comes to housing loan interest rates, several factors influence final rates beyond just loan duration and amount, including the size of the mortgage. The two largest banks in Cyprus offer rates consistent with the market average. In contrast, the four major Greek banks present a broader range of rates, with the upper end of the spectrum roughly matching the national average.
For corporate loans, the Bank of Cyprus tends to set rates slightly above the market average, whereas Hellenic Bank aligns more closely with general market levels. In Greece, loan rates are generally higher, with major banks often exceeding the national average. Historically, borrowing costs in Cyprus have remained above the eurozone average, while Greece has consistently recorded even higher rates.
On January 28, the European Central Bank (ECB) announced its fifth consecutive rate cut, reducing its benchmark rate by 25 basis points (0.25 per cent). This decision is expected to encourage financial institutions across Europe to lower their own rates accordingly.
The Bank of Cyprus has already responded by reducing its reference rate for loans tied to the ECB’s base rate from 3.15 per cent to 2.90 per cent. Analysts widely predict that the ECB will continue to implement rate reductions across the eurozone in the coming months.
By fLEXI tEAM
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