Nicosia: Cyprus banks reported a significant surge in new lending in December 2025, with pure new loans more than doubling to pound 625.0 million from pound 256.3 million in November, according to statistics released Wednesday by the Central Bank of Cyprus in its Monetary and Financial Statistics.
According to Cyprus News Agency, the most significant development was in lending to non-financial corporations for amounts exceeding pound 1 million, which jumped to pound 406.4 million (from a total of pound 685.0 million) from pound 69.6 million (from a total of pound 320.8 million) the previous month.
New loans for house purchases also rose, reaching pound 135.4 million (from a total of pound 178.1 million) compared with pound 113.4 million (total pound 155.7 million) in November, while pure new consumer credit declined to pound 17.2 million (total pound 18.2 million) from pound 20.4 million (total pound 23.4 million). Pure new corporate loans up to pound 1 million increased to pound 60.3 million (total pound 92.5 million) from pound 48.3 million (total pound 59.6 million).
The Central Bank noted that these figures cover only 'pure' new loans and exclude renegotiated or refinanced contracts.
Regarding interest rates, deposit rates for new business continued to rise modestly. The average rate on household deposits with an agreed maturity of up to one year increased to 1.20% from 1.13%, while the corresponding rate for non-financial corporations increased to 1.27% from 1.17%.
Lending rates showed mixed movements. The interest rate on consumer credit rose to 7.22% from 6.95%. In contrast, the rate on loans for house purchase fell to 3.78% from 3.86%, a decline the Central Bank attributed partly to shifts in the composition of the housing loan portfolio (which includes loans for primary residences, vacation homes, and other property types with varying risk profiles) rather than uniform rate reductions across institutions.
Corporate borrowing costs eased slightly. The rate on new loans up to pound 1 million decreased to 4.32% from 4.39%, and the rate on loans over pound 1 million fell to 4.42% from 4.50%.
Cyprus lending rates remain broadly aligned with euro area medians. For outstanding loan amounts, the spread relative to the eurozone median is zero for households and 0.3 percentage points for non-financial corporations. On new business, the weighted average rate for household house purchase loans stands -0.3 percentage points below the eurozone median, while corporate new lending is 0.6 percentage points above.
Deposit rates in Cyprus, however, remain on the low side compared to the euro area, both for outstanding and new business. The Central Bank linked this to persistently high excess liquidity in the Cypriot banking system-one of the highest in the eurozone-and a relatively narrow banking sector. Indicative of the liquidity position, Cyprus' Liquidity Coverage Ratio (LCR) stood at 319% in December 2025, well above the European Union median of 191% and mean of 161% recorded in September 2025.