CYPRUS: Bank deposits decline ‘stable’ at 4-5% monthly

The decline in bank deposits in Cyprus seems to have stabilised at an average rate of just under 5% in the past four months, far less than the 20% declines seen a year ago, but still a long way to go to convince savers to return.

With the justification provided in previous months being that local depositors were using their savings to pay down personal loans, the decline in that category seems to be the shallowest, with a bigger number of EU and non-EU nationals withdrawing their deposits.
The Central Bank of Cyprus said deposits declined by €212.9 mln to €45.7 bln in October, a 4.9% year-on-year fall, compared with a drop of 4.5% seen in September, -4.3% in August and -4.6% in July.
Monthly withdrawals in September had reached €850.6 mln.
Local residents’ deposits declined by €62.8 mln to €31.9 bln, while non-EU residents’ deposits declined by €144.1 mln to €11.67 bln. Euro area residents’ – except Cyprus – declined marginally by €6.0 mln to €2.07 bln.
Household deposits declined by €85.6 mln to €21.9 bln, while corporate deposits rose by €31.7 mln to €5.79 bln.
On the other hand, total loans saw a net reduction of €263.8 mln in October, compared to a net reduction of €157.1 in September, with the national loanbook reduced to €59.5 bln due to loan repayments by EU residents, while recoveries of non-performing loans also gets underway.
The annual reduction of loans stood at 2.3% in October compared to 2.8% in September 2014.