Despite recent narrowing, the gap between banking rates in Cyprus and the broader eurozone remains distinct, with local savers receiving less on their deposits while certain long-term borrowers continue to pay more.

Overview of Interest Rate Discrepancies

A noticeable difference continues to be recorded between the interest rates, for both on deposits and loans, offered by banks in Cyprus compared with the corresponding rates at banking institutions in the eurozone. According to data published on Monday by the Central Bank of Cyprus, although the gap has begun to narrow to a considerable extent, differences still remain.

Deposit Interest Rates

Specifically, for new household deposits with a maturity of up to one year, the average interest rate stands at 1.20%, compared with 1.89% in the eurozone. The highest rate for household deposits is offered by National Bank of Greece at 1.57%, while the lowest is offered by Bank of Cyprus at 0.82%.

For new deposits by non-financial corporations with a maturity of up to one year, the average interest rate stands at 1.23%, down from the previous month (1.39%) and also lower than the eurozone average (1.98%). The highest rate in this category is offered by Ancoria Bank (1.64%), while the lowest is offered by the Housing Finance Corporation at 0.78%.

For existing household term deposits with a maturity of up to two years, the average interest rate is only 0.77%, unchanged from the previous two months (0.76%) and significantly below the eurozone average (1.72%). The highest rate is offered by Jordan Kuwait Bank at 1.56%, while the lowest is offered by Bank of Cyprus at 0.51%, excluding Central Cooperative Bank and First Investment Bank, which offer a zero interest rate.

For existing term deposits by non-financial corporations with a maturity of up to two years, the average interest rate stands at 1.16%, up from 1.05% in February but slightly down from 1.19% in March. The average rate remains significantly below the eurozone equivalent (2.04%). The highest rate for this type of deposit is offered by National Bank of Greece at 1.48%, while the lowest is offered by Societe Generale at 0.75%.

Loan Interest Rates

For new housing loans, regardless of the initial rate fixation period, the average interest rate in April stood at 3.10%, slightly higher than in the previous two months (February: 3.04%, March: 3.09%), while the corresponding eurozone rate was 3.45%. The lowest rate in this category is offered by the Cyprus Development Bank at 2.00%, while the highest is offered by Ancoria Bank at 3.44%.

For new loans to non-financial corporations of up to €1 million, regardless of the initial rate fixation period, the average interest rate stands at 4.17%. The lowest rate is offered by Ancoria Bank at 3.15%, while the highest is offered by Banque SBA at 6.80%.

For new loans to non-financial corporations exceeding €1 million, regardless of the initial rate fixation period, the average interest rate stands at 3.83%. The lowest rate is offered by Alpha Bank at 3.52%, while the highest is offered by Bank of Cyprus at 4.40%.

For existing housing loans with a maturity of more than five years, the average interest rate stands at 3.48%, slightly lower than in the previous two months (February: 3.50%, March: 3.48%), but still significantly higher than the eurozone average (2.46%). The lowest rate is offered by the Housing Finance Corporation at 2.91%, while the highest is offered by Bank of Cyprus at 3.71%.

The average interest rate on existing loans to non-financial corporations with a maturity of more than five years stands at 4.07%, remaining broadly unchanged since February (February: 4.06%, March: 4.05%). By comparison, the corresponding eurozone rate is 3.09%. The lowest rate is offered by Eurobank at 3.83%, while the highest in this category is offered by Société Générale at 4.99%.

Source: CNA(ΚΥΠΕ)