The Cypriot banking sector’s non-performing loan (NPL) ratio remained stable at 5.5 per cent at the end of August 2025, according to the Central Bank of Cyprus (CBC), confirming the financial system’s continued stability despite geopolitical upheaval.

However, the NPL ratio, applying the European Banking Authority’s (EBA) Risk Dashboard methodology which includes loans and advances to Central Banks and Credit Institutions, saw a decline, dropping to 2.8 per cent at the end of August 2025, down from 2.9 per cent recorded at the end of July 2025.

The coverage ratio of non-performing loans with provisions showed an increase, reaching 62.6 per cent at the end of August 2025, compared with 62.2 per cent recorded at the end of July 2025.

Furthermore, total restructured loans stood at €1.2 billion at the close of August 2025.

Of this total, loans amounting to €0.6 billion continue to be categorised as non-performing loans.

The CBC recently also reported that net new loans in Cyprus fell by €18.5 million in October to €429.4 million, primarily due to a slowdown in corporate lending, according to the Central Bank of Cyprus (CBC).

Despite the decline in overall net lending, housing loans continued to rise to €117.5 million, and consumer loans also strengthened.

New lending to non-financial companies, across both small and large contracts, eased significantly.

Meanwhile, interest rates rose for most categories, including mortgages (up to 3.73 per cent) and consumer loans (up to 6.88 per cent).

Although Cypriot lending rates align with the Eurozone median, deposit rates remain the lowest in the Eurozone.

The CBC attributed this gap to the exceptional liquidity of Cypriot banks, with the liquidity coverage ratio at a high 329 per cent.