New loans drop to €318.7m in January, down from €592m the month before

Net new loans declined significantly in January 2025, falling to €318.7 million from €592 million the previous month.

The drop was mainly attributed to a decrease in business loans, while consumer and housing loans showed mixed trends. At the same time, most interest rates, including housing loans and business loans, also recorded a decline.

According to data released by the Central Bank of Cyprus (CBC), net new consumer loans increased to €25.2 million, up from €16.9 million in December. Net new housing loans dropped to €87.6 million, compared to €95.5 million in the previous month. Net new loans to non-financial corporations for amounts up to €1 million fell to €38.2 million, down from €77.6 million. Meanwhile, net new loans to non-financial corporations for amounts exceeding €1 million declined to €167.7 million, from €401.9 million in December.

Total new lending

Total new lending, including loan renegotiations, decreased to €544.4 million, from €736.2 million in the previous month. New consumer loans increased to €26.5 million, compared to €17.9 million in December. Housing loans also rose to €132.6 million, from €120.7 million in the previous month. However, new loans to non-financial corporations for amounts up to €1 million fell to €53.2 million, from €90.6 million. Similarly, new loans to non-financial corporations for amounts exceeding €1 million declined to €317.4 million, from €499.8 million in the previous month.

Decline in household loan rates, increase for large businesses

Lending rates for households showed a downward trend in January 2025, whereas rates for large businesses saw a slight increase. The interest rate on consumer loans dropped to 6.25%, from 7.20% in the previous month. The housing loan interest rate decreased to 4.47%, compared to 4.75% in December.

For businesses, the interest rate on loans to non-financial corporations for amounts up to €1 million decreased slightly to 5.08%, from 5.11%. Conversely, the rate on business loans exceeding €1 million rose to 4.90%, from 4.82%.

In the deposit sector, the interest rate for household term deposits of up to one year decreased to 1.34%, from 1.79% in the previous month. Meanwhile, the corresponding rate for deposits by non-financial corporations increased to 1.80%, compared to 1.73% in December.

(Source: CBC)