Strong Deposit Inflows and Increased Loans in Banks
Household Deposits Increased by €49.7m, Non-Financial Corporations by €480.3m, While Other Domestic Sectors Recorded a Total Increase of €96.2m.
Strong momentum was recorded in Cypriot banking activity in June 2026, as both deposits and loans grew at a faster pace compared to the previous month. According to data from the Central Bank of Cyprus, new deposit inflows exceeded €600m, while loans expanded by nearly €500m, confirming ongoing mobility within the banking system. At the same time, the latest available data for average interest rates, pertaining to May 2026, record mixed trends in deposit yields and borrowing costs.
Total deposits in June recorded a net increase of €601.2m, compared to an increase of €343.8m in May, bringing their total balance to €58.7bn. The annual rate of change for deposits stood at 5.0%, compared to 5.1% in the previous month.
The increase originated primarily from Cyprus residents, whose deposits rose by €626.2m. Household deposits increased by €49.7m, non-financial corporations by €480.3m, while other domestic sectors recorded a total increase of €96.2m.
Total loans also moved upward, increasing by a net €499.4m in June, compared to €260.3m in May. The outstanding loan balance reached €28.6bn, while the annual rate of change formed at 11.6%, down from 12.6% in May.
Loans to Cyprus residents increased by €213.7m. Specifically, loans to households rose by €131.4m, to non-financial corporations by €90.1m, while other domestic sectors recorded a total decrease of €7.8m.
The significant increase in deposits is mainly attributed to the strengthening of corporate liquidity, as the majority of new deposits originated from non-financial corporations. Concurrently, the growth in loans to households and businesses indicates that demand for bank financing remains strong, despite the higher interest rate environment compared to previous years. At the same time, the slight deceleration in the annual growth rate of both deposits and loans suggests that credit expansion continues, but at a more moderate pace.
Regarding average interest rates on new contracts for May 2026, the rate on term deposits with a maturity of up to one year increased to 1.25% for households, up from 1.20% the previous month, and to 1.31% for non-financial corporations, up from 1.23%.
Conversely, the interest rate on consumer loans fell to 6.95% from 7.19%, while the mortgage loan rate increased to 4.06% from 3.73%. For business loans to non-financial corporations up to €1m, the average interest rate increased to 4.27%, whereas for amounts over €1m, it decreased to 3.85% from 4.08% in the previous month.
The significant increase in deposits is primarily attributed to the ongoing reinforcement of corporate liquidity, as nearly 80% of new deposits came from non-financial corporations. At the same time, the increase in loans to households and businesses demonstrates that demand for bank financing remains resilient, despite the higher interest rate environment compared to previous years.
