Credit growth continues at fast pace

…but non residents withdraw deposits

Advances and loans given by the local banks surged by CYP 171.22 mln to CYP 10.31 bln end of March 2006 on the back of a strong increase in construction related and personal loans, used mostly to finance consumer loans, but deposits fell sharply by CYP 54 mln to CYP 16.3 bln as foreigners withdrew their funds.

Personal loans surged by CYP 82 mln to CYP 4.95 bln, while construction loans made by banks increased to CYP 1.84 bln for a CYP 50 mln increase compared to February 2006, the Monetary Survey of the Central Bank showed according to Financial Mirror calculations.

Of the total CYP 10.31 bln in loans made by banks by end of March 2006, CYP 8.5 bln were in local currency, which increased by CYP 105 mln and CYP 1.84 bln in foreign currency, which were up by CYP 65 mln.

The Central Bank figures also showed that the Cooperative Credit Societies lost business to the banks as their total advances to customers showed a very moderate increase of CYP 16 mln in March to CYP 3.6 bln.

Non residents withdraw

The Central Bank figures compiled by the Financial Mirror show that total deposits end of March 2006 fell by CYP 54 mln to CYP 16.37 bln mostly as a result of the decline in non resident deposits.

Non resident deposits fell by CYP 62.5 mln to CYP 6.75 bln as foreign currency deposits fell to CYP 6.16 bln.

Total deposits by residents showed a mild increase of CYP 8 mln in March to CYP 9.61 bln, but the increase was not enough to cover the shortfall from the decline in non resident depositors.

The Central Bank figures showed that total deposits with Cooperative Credit Societies increased by CYP 43.5 mln to CYP 4.75 bln, bucking the declining trend seen with the commercial banks as the Coops have no exposure to foreign depositors.