Lending rates fall for 12,000 BoC clients

The Bank of Cyprus on Friday announced a fresh reduction in its reference interest rate for loans linked to the European Central Bank’s (ECB) base rate, in direct response to the ECB’s latest monetary easing.

The bank will lower its rate from 2.40 per cent to 2.15 per cent, with the change taking effect from June 11, 2025.

“This is a 0.25 percentage point cut that will once again have a significantly positive impact on our clients, especially in the amount of their monthly loan instalments,” the bank said in an official statement.

An estimated 12,000 borrowers whose loans are tied to the ECB base rate will benefit from an immediate reduction in their monthly payments.

The bank also pointed out that since the ECB began cutting rates in June 2024, the cumulative decrease has now reached 2.35 percentage points, down from 4.50 per cent to 2.15 per cent.

The Bank of Cyprus also stated that interest rates for another 15,800 borrowers with loans linked to the Euribor benchmark have been on the decline for some time.

As an example, Euribor peaked at 4.14 per cent in October 2023 but has since fallen steadily to its current level of 2.05 per cent.

“The Bank of Cyprus continues to support the real economy of the country, households, and businesses by offering products that meet all needs with competitive interest rates and attractive financing terms,” the bank said.

It should be mentioned that the ECB’s latest rate cut, delivered on June 6, was widely anticipated and marks the eighth reduction in borrowing costs since June 2024, totalling a two percentage point drop.

The move is part of a broader effort to bolster the eurozone economy, which has faced persistent weakness, exacerbated by global uncertainty and trade tensions, particularly linked to United States policies.

With inflation now in line with the ECB’s two per cent target, the central bank’s tone has shifted from action to caution.

“The Governing Council is not pre-committing to a particular rate path,” the ECB said.

“Interest rate decisions will be based on its assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation and the strength of monetary policy transmission,” it added.

The ECB did not indicate whether further rate cuts would follow soon, suggesting that decisions would continue on a meeting-by-meeting basis.

Market participants expect the central bank to pause in July, with some officials urging a break to evaluate the impacts of previous easing measures.

Although inflation could dip temporarily, even below target, the ECB said that it remains alert to longer-term risks, including higher public spending, rising trade barriers, and structural pressures such as demographic shifts and the cost of green transition policies.

While another cut later in 2025 remains on the table, the bank’s future moves will depend heavily on data and developments in global trade and domestic fiscal policy.

Bank of Cyprus continues share buyback programme

In other Bank of Cyprus news, the bank on Friday also announced the repurchase of a total of 346,230 of its own ordinary shares between May 30 and June 5, 2025.

The shares, each with a nominal value of €0.10, were acquired on both the Cyprus Stock Exchange and the Main Market of the Regulated Securities Market of the Athens Stock Exchange.

The repurchases were conducted through the company’s broker, the Cyprus Investment and Securities Corporation Limited, known as CISCO.

Of the total, 69,900 shares were purchased on the Cyprus Stock Exchange and 276,330 shares on the Athens Stock Exchange.

The highest price paid per share was €6.26 on the Cyprus exchange and €6.28 on the Athens exchange.

Moreover, the lowest price paid on both exchanges was €5.98. The volume weighted average price paid was €6.05 in Cyprus and €6.11 in Athens.

According to the company, these transactions form part of its broader share buyback programme, which aims to repurchase up to €30 million worth of shares as previously announced on February 18, 2025.

The acquired shares are scheduled to be cancelled towards the end of the buyback programme.