CYPRUS: Loans on the rise as interest rates drop

Cyprus banks issued 65.4% more loans in December compared to the previous month while lending and deposit rates dropped further. According to figures published by the Central Bank of Cyprus on Friday, total new loans rose to Euros 407.6 mln, compared to Euros 246.4 mln in the previous month.

Loans to non-financial corporations for over Euros 1 mln recorded the largest increase, to Euros 216.9 mln, compared to Euros 91.0 mln in the previous month. Of these, Euros 195.6 mln were new loans and Euros 21.3 mln are restructured loans.

New housing loans rose to Euros 101.6 mln, compared with Euros 82.8 mln the previous month. Of these, Euros 96.3 mln concerned new loans and Euros 5.3 mln were restructured.

New loans to non-financial corporations for amounts up to Euros 1 mln recorded an increase to Euros 56.1 mln, compared to Euros 1.8 mln in the previous month, of which Euros 53.5 mln were new loans.

New loans for consumption decreased to Euros 12.8 mln, compared to Euros 13.3 mln in the previous month.

Meanwhile, interest rate on consumer credit in December 2018 saw a decrease to 2.92%, compared with 3.49% in the previous month. Cyprus had the fourth lowest interest rate for consumer loans in the Eurozone after Luxembourg, Spain and Belgium, while the Eurozone average was 4.92%.

The interest rate on housing loans fell to 2.13%, compared to 2.29% in the previous month, while the Eurozone average stood at 1.61%.

The interest rate on loans to non-financial corporations for amounts up to Euros 1 mln decreased to 3.41%, compared to 3.53% in November, while the Eurozone average was 1.97%.

The interest rate on loans to non-financial corporations for amounts over Euros 1 mln rose to 3.40%, compared to 3.12% in the previous month, and is the third highest Eurozone interest rate in this category after Malta and Greece. The Eurozone average was 1.26%.

The interest rate on household deposits with an agreed maturity of up to one year dropped to 0.40%, compared with 0.54% in the previous month, while the Eurozone average was 0.31%.

The corresponding interest rate on non-financial corporations deposits recorded a marginal decrease to 0.45%, compared to 0.46% in the previous month and is the third highest in the Eurozone after Greece and Italy. The average Eurozone rate for this category was 0.06%.

Source: Financial Mirror