Cyprus Business Now

Cypriot banks see a tightening of lending criteria for the second quarter of 2022, due to the uncertainty related to Russia’s invasion of Ukraine, according to the Q1-22 Bank Lending Survey (BLR) by the Central Bank of Cyprus (CBC).

“According to banks’ expectations for the second quarter of 2022, lending criteria in Cyprus to businesses and households for all loan categories were expected to tighten, possibly due to the uncertain geopolitical situation starting at that time with the invasion of Russia in Ukraine”, the Central Bank said.

According to the CBC, during the first quarter of the year, the criteria for granting loans both to businesses and for all categories of loans to households remained unchanged compared to the previous quarter.

In terms of loan demand, the survey showed that net demand remained unchanged in the first quarter of 2022, both for loans from small and medium-sized enterprises and for loans from large enterprises and mortgages.

However, net loan demand in Cyprus from businesses remained unchanged in the first quarter of 2022 compared to the fourth quarter of 2021, a development that was contrary to expectations expressed in the previous quarter’s survey, where an increase was expected.

According to the CBC, net demand for business loans remained unchanged overall during the reporting quarter, while an increase in business financing needs for inventories and working capital was recorded.

“Potentially, the increase in loan demand for inventory and working capital reflects the disruptions observed in the supply chain as a result of mainly the effects of the pandemic and the war in Ukraine as well as the proactive reaction of businesses in an environment of increased uncertainty,” the CBC said.

The Industrial Production Index for the month of May 2022 reached 136.2 units (base 2015=100), marking an increase of 5.3 per cent year-on-year, according to a report by the Cyprus Statistical Service (Cystat) released on Thursday.

The manufacturing sector saw an increase of 6.3 per cent compared to May 2021.

An increase was also recorded in the mining and quarrying sectors by 13.9 per cent, as well as in water supply and materials recovery by 12.8 per cent.

The electricity supply sector experienced a drop of 1.4 per cent compared to May 2021.

According to the data, in the manufacturing sector, the most significant positive changes compared to May 2021 were in the production of textiles, clothing and leather goods, with an increase of 47 per cent.

Furniture manufacturing and the repair and installation of machinery and equipment rose by 26.7 per cent, while the manufacturing of rubber and plastic products increased by 9.2 per cent.

Conversely, the most significant negative change was observed in the manufacturing of electronic and optical products and electrical equipment with a decrease of 23.5 per cent.

Between January and May 2022, the index showed an increase of 4.5 per cent compared to the corresponding period of the previous year.

For this period, the most significant increases are observed in the economic activities of textile, clothing and leather production, with an increase of 56.7 per cent.

Water collection, treatment and supply increased by 36.4 per cent, while furniture manufacturing and the repair and installation of machinery and equipment rose by 17.1 per cent.

Finally, the segment of electricity supply increased by 12.9 per cent.

The Cyprus Stock Exchange (CSE) ended Thursday, July 28 with profits.

The general Cyprus Stock Market Index was at 67.86 points at 13:33 during the day, reflecting a rise of 0.09 per cent over the previous day of trading.

The FTSE / CySE 20 Index was at 40.62 points, which represents an increase of 0.07 per cent.

The total value of transactions came up to €340,305.

In terms of the sub-indexes, the main and alternative indexes rose by 0.07 per cent and 0.11 per cent respectively. The hotel and investment firm indexes remained stable.

The biggest investment interest was attracted by the Bank of Cyprus (no change), the Cyprus Cement Company (+0.81 per cent), Logicom (no change), Hellenic Bank (+0.23 per cent) and Woolworth Cyprus Properties Plc (no change).