The profitability of Cyprus’ banking sector fell by 23.6 per cent during the first quarter of 2026, according to updated aggregate figures by the Central Bank of Cyprus (CBC).

The Central Bank of Cyprus (CBC) published updated aggregate data for the Cypriot banking sector on Friday, covering profitability, balance sheets and capital adequacy, with a reference date of March 31, 2026.

According to the figures, banking sector profitability declined by €62 million, a drop of 23.6 per cent, to €202 million during the first quarter of 2026, compared with €264 million recorded in March 2025.

The CBC said that the decline was mainly driven by a reduction in net interest income (NII) and by losses arising from foreign exchange differences.

At the same time, the total assets of the banking sector increased by €274m, a rise of 0.4 per cent, during the first quarter of 2026.

As a result, total banking sector assets reached €70.23 billion, up from €69.96 billion at the end of December 2025.

According to the CBC, this increase was primarily due to higher levels of loans and advances, as well as an increase in debt securities holdings.

The Common Equity Tier 1 (CET1) ratio of the banking sector declined by 0.7 percentage points at the end of March 2026.

The ratio stood at 25.1 per cent, compared with 25.8 per cent at the end of December 2025.

The CBC explained that this decrease was mainly the result of an increase in the total risk exposure amount, which offset the rise recorded in Common Equity Tier 1 capital.

The central bank concluded that the increase in risk-weighted exposures outweighed the positive impact from the strengthening of CET1 capital, leading to the lower capital ratio.