New bank loans up 15%

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New loans granted by Cypriot banks increased by 15.4% in the first eight months to August compared to 2021, pushed upwards by higher demand for household and business loans.

Despite a €182.3 mln drop in August, recording a decrease for the second month in a row, Cyprus banks have so far this year given out more credit compared to 2021.

According to data released by the Central Bank of Cyprus, for January – August, total new lending amounted to €2.11 bln, compared to €1.83 bln in the same period last year, registering an increase of 15.4%.

Compared to 2019, total loans show a decrease of 5.4%.

New credit in August alone decreased by 5.5% compared to the same month last year.

New business loans climbed 18.3% in the first eight months, reaching €1.118 bln, from €945 million in 2021.

Compared to 2019, they recorded a decrease of 19.4%.

New household loans rose 12.2%, to €997.2 mln from €888.5 mln, and increased by 17.5% compared to 2019.

Regarding restructured loans to households, they amounted to €99.5 million from €238.2 million last year and €64.8 million in 2019; for businesses, it was €646.6 million from €1488.7 million and €156.6 million in 2019.

In 2021, €2.9 billion of new loans were issued from €2.4 billion in 2020, an increase of 22.2%.

The Central Bank announced an increase in interest rates, reflecting the effects of the European Central Bank in July to increase interest rates by 50 basis points.

According to new data, the interest rate on consumer loans in August increased to 3.36% from 3.27% the previous month, its highest level since February 2019.

The mortgage interest rate rose to 2.56%, from 2.55% the previous month, the highest level since February 2018.

The interest rate for loans to non-financial companies for under €1 mln increased to 3.85%, from 3.51% the previous month, the highest level since September 2017.

The interest rate regarding loans to non-financial companies for amounts above €1 mln recorded an increase to 3.11%, compared to 3.04% the previous month, the highest since July 2021.