New bank loans up 22% in 2021

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Total new bank loans in Cyprus increased by 22.2% in 2021 compared to the previous year, coming close to the levels of pre-coronavirus 2019, with deposits also taking off.

According to the Central Bank of Cyprus (CBC) data, new loans in 2021 reached €2.9 bln, up from €2.4 bln in 2020, an increase of 22.2%.

Compared to 2019, total loans show a small decrease of 1.5%.

Total loans extended by banks to households and businesses, excluding restructuring, amounted to €2.939 bln from €2.4 bln in 2020 and €2.984 bln in 2019.

New business loans show an increase of 16.1%.

They amounted to €1.5 bln from €1.3 bln in 2020.

Compared to 2019, business loans dropped by 12.5%.

New loans to households increased by 29.8% compared to 2020, amounting to €1.39 bln from €1.07 bln.

New loans to households increased by 14.4% compared to 2019.

Some €326.2 mln worth of household loans were restructured in 2021 from €217.4 mln in 2020 and €156.4 mln in 2019.

Banks restructured business loans worth €1.99 bln, compared to €536.5 mln in 2020 and €419.9 mln in 2019.

Meanwhile, Cyprus banks’ lending balances have decreased due to increased deposits amid the improved macroeconomic environment, particularly low lending rates.

This means that banks now have excess liquidity in their coffers that exceeds €20 bln, as customer deposits increase.

According to CBC data, Cyprus banks have excess liquidity of €21.7 bln, with deposits having increased in 2021 by €3.13 bln.

In December 2021, deposits recorded a net increase of €331.2 mln, from a net increase of €480.8 mln in November.

Household deposits at the end of December increased by €514.5 mln, while last month there was a decrease of €14.1 mln.

Business deposits for the first time in 2021 decreased in December to €200.7 mln. In November, the increase was €277.4 mln.

Deposits of insurance companies and pension funds fell by €45 mln in December, and outflows were €9 mln in November.

Regarding other financial intermediaries, there was an increase in deposits of €84.6 mln in December, while in November, the increase was €232.4 mln.

In November, general government deposits decreased by €22.2 mln, dropping to €5.5 mln.