Interest rates show downward trend in November 2024

Interest rates in Cyprus showed a general downward trend across most categories in November 2024, according to data released by the Central Bank of Cyprus (CBC).

This trend aligns with recent rate cuts by the European Central Bank (ECB). However, significant differences remain among Cypriot financial institutions, with the country continuing to report higher borrowing rates and lower deposit rates compared to the Eurozone average.

In the mortgage lending sector, the average variable interest rate for home purchases in Cyprus dropped slightly to 4.50% in November, compared to 4.62% in October. In contrast, the corresponding rate in the Eurozone fell to 4.27% from 4.37%. For new loan contracts with variable rates or initial fixed periods up to one year, interest rates varied widely among banks. The Bank of Cyprus recorded the highest rate at 5.20%, followed by Astrobank at 4.85% and Eurobank Cyprus at 4.54%. The lowest rates were offered by the Housing Finance Corporation at 3.53% and Ancoria Bank at 3.78%. In loan renegotiations, the Bank of Cyprus again reported the highest rate at 5.48%, while Eurobank Cyprus and Hellenic Bank offered significantly lower rates of 2.35% and 2.57%, respectively.

Corporate loans below €1 million also saw a reduction in interest rates during November. The average rate for these loans in Cyprus fell to 5.01%, down from 5.45% in October, while the Eurozone average decreased to 4.74% from 4.82%. Among Cypriot banks, Banque SBA offered the highest rate for new loans at 7.54%, followed by Societe Generale Bank Cyprus at 6.84% and Eurobank Cyprus at 5.52%. The lowest rates were provided by Hellenic Bank at 4.55% and Ancoria Bank at 4.35%. For renegotiated loans, Societe Generale Bank Cyprus recorded the highest rate at 6.84%, while Hellenic Bank stood out with the lowest rate of 3.42%.

In contrast to the general downward trend, large corporate loans above €1 million saw an increase in variable interest rates. The average rate in Cyprus rose to 4.97% in November from 4.72% in October, diverging from the Eurozone average, which decreased to 4.38% from 4.57%. Banque SBA once again recorded the highest rate for new loans at 7.52%, with Hellenic Bank following at 6.55%. Lower rates were observed at the Bank of Cyprus, which offered 5.07%, and Societe Generale Bank Cyprus, which reported 5.15%. For renegotiated loans, Hellenic Bank had the lowest rate at 3.29%, representing a sharp decline from 4.40% in October, while Eurobank Cyprus maintained a steady rate of 4.86%.

Deposit interest rates also followed a downward trajectory. For household term deposits in euros with a maturity of up to one year, the average rate fell to 1.70% in November from 1.76% in October and 1.98% in September. The Eurozone average also decreased, settling at 2.61% from 2.74%. The highest rates for household deposits in Cyprus were offered by Arab Jordan Investment Bank at 3%, the National Bank of Greece at 2.49%, and Eurobank Cyprus at 2.16%. In contrast, the lowest rates were reported by the Bank of Cyprus at 0.72% and Hellenic Bank at 1.50%.

Corporate deposit rates followed a similar trend, with the average rate for one-year term deposits dropping to 1.99% in November from 2.19% in October. The Eurozone average remained higher at 2.90%. Astrobank offered the highest corporate deposit rate at 2.92%, followed by the National Bank of Greece at 2.54%. The lowest rates were observed at the Housing Finance Corporation, which offered just 0.22%, and Cyprus Development Bank, which recorded a rate of 1.59%.

(Source: CNA)