Cyprus’ banking system continued to show exceptionally high liquidity in October 2025, with deposits exceeding loans by €30.8 billion, the highest level since comparable records began in 2007.

The latest figures from the Central Bank of Cyprus (CBN) show excess liquidity edging towards €31bn, confirming a trend already noted in recent analyses of the sector’s strong fundamentals,including rising deposits in September.

According to Thursday’s data, total deposits reached €57.6bn in October, while total loans stood at €26.8bn.

The gap remains far from the conditions of 2013, when loans exceeded deposits by roughly €17bn, a reversal that has been repeatedly documented in recent coverage of banking-sector strengthening, such as the overview of broader economic performance published earlier in November.

Confidence began to stabilise in April 2018, when deposits first surpassed loans by €1.9bn.

By the end of 2018 the surplus had risen to €8.7bn, climbing to €15.1bn in 2019 and €16.4bn in 2020.

It continued to expand in the following years, reaching €21.6bn in 2021, €26.3bn in 2022, €27.4bn in 2023 and €30.5bn in 2024, a trend reinforced by the steady rise in corporate and household savings, including the record €12.5bn in corporate deposits reported last August.

Meanwhile, Cypriot banks maintain one of the strongest liquidity positions in the European Union.

The liquidity coverage ratio stands at 335 per cent, more than triple the regulatory minimum of 100 per cent, broadly in line with the high LCR levels highlighted in August’s review of Cypriot and European banks.

For Bank of Cyprus, the Group LCR reached 313 per cent at the end of September 2025, compared with 304 per cent in June and 309 per cent at the end of 2024.

Excess liquidity amounted to €8.5bn in September, up from €8.1bn in June and December, marking a 5 per cent quarterly increase driven by higher deposits, a development consistent with broader assessments of the bank’s strengthened balance sheet and profitability, as noted in late-October reporting.

While the system’s liquidity remains one of the highest in Europe, not all analysts view this as unequivocally positive. A recent column examining the allocation of financial resources argued that a significant share of the liquidity surplus continues to be placed with the European Central Bank rather than channelled into new lending, raising questions about the banking sector’s support to the real economy.

Nonetheless, the combination of robust deposits, high solvency and historically strong liquidity ratios continues to underpin confidence in the stability of Cyprus’ banking system, as reflected in the renewed international interest highlighted at the end of November.