New lending by Cypriot banks saw a significant rise in January 2024, primarily driven by large corporate loans exceeding €1 million, according to data released by the Central Bank of Cyprus (CBC).

Pure new loans (excluding renegotiations) for January 2024 totaled €220 million, marking a 47% increase compared to €149 million in January of the previous year.

This substantial annual growth is attributed to a low base of new corporate loans over €1 million in January last year, which amounted to just €17.4 million. In contrast, these loans surged to €83.3 million in January this year, registering an annual increase of 379%. In Cyprus, large corporate lending traditionally represents the largest portion of new lending.

Housing loans, representing the second-largest share of new lending, experienced a 6% annual decrease to €72 million in January 2024, down from €76 million in January 2023.

Corporate new lending up to €1 million also rose, increasing by 5% to €41 million in January 2024, compared to €38 million in the same period last year.

New consumer lending reached €20 million, indicating a significant annual increase of 65% compared to €12 million in January 2023. However, new "other" loans decreased by 17% to €4.4 million in January 2024, down from €5.3 million in the corresponding period last year.

Deposit interest rates fell in January, while lending rates generally rose, except for consumer lending interest rates, as reported by the CBC.

The interest rate provided by banks on household deposits with an agreed maturity of up to one year declined to 2.6%, compared with 2.29% in the previous month.

Interest rates on deposits from non-financial corporations saw a decrease to 2.11%, compared with 2.19% in December 2023.

According to the CBC, the interest rate on consumer credit decreased to 5.64%, from 5.88% in the previous month. In contrast, lending rates on house loans rose to 5.26%, up from 5.16% in the previous month.

The interest rate on loans to non-financial corporations for amounts up to €1 million increased slightly to 5.65%, compared with 5.62% in the previous month. Meanwhile, the interest rate on loans to non-financial corporations for amounts over €1 million climbed to 6.02%, up from 5.73% in the previous month.