Business & economy wrap-up from the day before
The report, prepared by the CBC’s Economic Analysis and Monetary Policy Division, said the move towards longer-term fixed-rate lending, particularly in the mortgage market, reduced the exposure of new borrowers to interest rate fluctuations, narrowed the gap between lending and deposit rates, and altered how monetary policy is transmitted through the Cypriot economy.
According to the central bank, the ECB’s monetary tightening cycle, which ran from July 2022 until September 2023, followed by the subsequent easing phase between June 2024 and June 2025, was accompanied by significant changes in the composition of new lending in Cyprus.
Adjusted net profit reached €776m, up 9.2 per cent year on year, while earnings per share stood at €0.20 and return on tangible book value reached 16.6 per cent.
Eurobank CEO Fokion Karavias said the group continued to deliver strong results despite ongoing geopolitical uncertainty and renewed tensions in the Middle East.
“Despite persistent geopolitical uncertainty and renewed tensions in the Middle East, the economies of our core markets have remained on a solid growth trajectory,” Karavias said.
He added that the Greek economy had remained resilient, supported by investment activity, tourism and continued expansion in business lending.
“In Cyprus and Bulgaria, economic sentiment and growth remain also robust,” Karavias said.
The bank’s non-Greek operations, which include Cyprus and Bulgaria, generated €361m in adjusted net profit, accounting for 46.5 per cent of group profitability.
The surplus was slightly higher than the €416.80m, or 1.1 per cent of GDP, recorded during the corresponding period of 2025.
Total government revenue rose by 4.1 per cent to €7.40 billion between January and June 2026, compared with €7.11 billion in the same period a year earlier.
The statistical service said the increase reflected an additional €290.30m in revenue over the first half of 2025.
Revenue from taxes on income and wealth increased by €101.00m, or 6.3 per cent, reaching €1.69bn compared with €1.59bn a year earlier.
BG Cyprus’ 35 per cent non-operated interest in a Cyprus Offshore block, home to the Aphrodite gas field in the eastern Mediterranean, will be controlled by MOL upon the expected 2027 completion of the deal.
“Our decision to exit is driven by disciplined capital allocation and portfolio choices, as we focus on opportunities that strengthen our integrated LNG value chain,” Shell’s Integrated Gas President Cederic Cremers said in a statement.
Shell has been seeking to expand its LNG portfolio to capitalise on rising global demand for the fuel and on Thursday said it will take a final investment decision on its Canada LNG project phase 2 by the end of 2026.
The January 1 to June 30, 2026 period saw sales of apartments and houses either under construction or at the planning stage reach a combined value of €1.15 billion, reflecting continued activity across the island’s residential property sector.
The average value per transaction stood at €319,618, while the median price was €232,500, with the wide gap between the two figures attributed to a number of particularly high-value property sales.
The analysis highlighted significant differences between Cyprus’ five districts, with each market displaying distinct characteristics depending on buyer demand, property type and price levels.
The exercise, which forms part of the ECB’s broader supervisory focus on geopolitical risks for 2026 to 2028, examined banks’ ability to identify and assess potential threats in an environment of heightened global uncertainty.
The ECB asked banks to design their own plausible geopolitical scenarios based on their individual risk profiles, with each scenario required to result in a 300-basis-point reduction in their Common Equity Tier 1 (CET1) capital ratio.
Unlike traditional stress tests, where banks are assessed against a common scenario, the reverse stress test focused on how effectively banks could analyse the ways geopolitical developments could affect their own business models.
This headline figure reflects a slight cooling from the 4.1 per cent rate recorded in June 2026, although price pressures remain significantly elevated compared to earlier periods.
On a monthly basis, consumer prices in Cyprus rose by 0.3 per cent month-on-month between June 2026 and July 2026.
The latest estimate highlights a dramatic shift when viewed against the 0.1 per cent year-on-year rate registered in July 2025.
Prior to the current level, national price growth had accelerated sharply to 3.5 per cent year-on-year in May 2026 before climbing further the following month.
The committee heard that nine ageing conventional units at Dhekelia and Vasiliko will have to be withdrawn under European environmental protocol, creating a potential shortfall of around 750 megawatts (MW) if natural gas has not arrived and the island’s planned electricity interconnection with Greece (GSI) has not been completed.
Energy Minister Michael Damianos said last week’s outages resulted from high electricity demand combined with failures at conventional units.
He said the immediate situation should improve from next January with the installation of the transmission system operator’s (TSO) first 120MW central storage facility.
The index reached 125.8 units during the month, using 2021 as a base value of 100 points, which represents a 0.3 per cent rise compared to May 2026.
Over the first six months of the year, spanning from January to June 2026, the index showed an overall growth of 0.8 per cent when compared against the corresponding period of 2025.
On a month-on-month basis, output prices in mining and quarrying, manufacturing, and electricity supply all expanded by 0.3 per cent in June 2026 compared to May 2026.
The changes form part of a wider licensing and supervisory strategy for the sector, first announced on December 20, 2024, the central bank said.
A new pre-application exploratory stage will be added before a formal licence application can be submitted.
At this stage, entities seeking authorisation will have to provide specific information that the CBC considers necessary for an initial assessment of the business.
A non-refundable fee of €5,000 will be charged at this stage, the announcement mentioned.
The report showed that household and corporate debt both increased marginally compared with the previous quarter, although debt ratios remained substantially lower than a decade earlier.
According to the CBC, the financial assets of insurance companies amounted to €6.10 billion at the end of March 2026.
Of these assets, 7 per cent were held in cash and deposits, 2 per cent in loans, 29 per cent in debt securities, 45 per cent in shares and 18 per cent in other financial assets.
The financial assets of investment funds totalled €7.60bn, with 4 per cent invested in cash and deposits, 13 per cent in loans and debt securities, 80 per cent in shares and 3 per cent in other financial assets.
This year’s competition has been given a stronger European focus, with the bank issuing an open invitation to startups operating in different markets across the continent to develop innovative solutions addressing key challenges facing the financial services industry.
Artificial intelligence is at the heart of the FinQuest 2026 competition, with applicants invited to submit proposals in one of four thematic areas.
The first category, AI First Banking & Value Transformation, focuses on solutions that use artificial intelligence, automation and advanced analytics to transform banking operations, improve productivity, enhance decision-making and create measurable business value.
Although new machines were installed in remote and mountainous areas during 2025 to improve access to cash for local communities, those gains were more than offset by removals elsewhere, mainly in more central locations.
By the second half of 2025, about 73 per cent of ATMs in Cyprus supported contactless transactions, underlining what the report described as a relatively advanced ATM infrastructure and a strong readiness to meet changing consumer payment preferences.
That put Cyprus well ahead of the euro area as a whole, where only 38 per cent of ATMs accepted contactless transactions, even though the total number of machines also declined marginally, from 252,249 in the second half of 2024 to 248,888 a year later.
Over the past five years, the number of ATMs in both Cyprus and the euro area has fallen by about 13 per cent, a trend linked to the gradual decline in cash use and banks’ efforts to streamline operating costs.
The company said its board of directors approved the consolidated interim financial statements for the six months ended June 30, 2026, at a meeting held on July 30, 2026.
It added that an extract from the interim financial statements will be published in the local press, while hard copies will not be mailed to shareholders.
Revenue increased to €80.39m during the first half of 2026, compared with €77.48m in the corresponding period of 2025.
Presenting the initiative’s progress, Head of the Office of the Deputy Minister to the President Irene Georgalla said that Minds in Cyprus has evolved within a year “from a strategic announcement into a policy delivering tangible results” by strengthening links between the Cypriot diaspora and the country’s economy, labour market and development strategy.
She added that since the initiative was launched, members of the Cypriot diaspora have also submitted more than 300 enquiries, proposals and suggestions through the platform.
The initiative was announced by President Nikos Christodoulides in London in May 2025 and is being implemented jointly by the relevant ministries, Invest Cyprus and Keve, under the coordination of the Presidency.
The CypERC now forecasts Cyprus’ real gross domestic product (GDP) growth at 2.7 per cent in 2026, down from an estimated 3.8 per cent in 2025, before strengthening to 3.1 per cent in 2027.
At the same time, Eurostat reported that seasonally adjusted GDP increased by 0.4 per cent in the euro area and by 0.5 per cent across the European Union during the second quarter of 2026, compared with the previous quarter.
The latest European figures marked an improvement after GDP remained unchanged in the euro area and grew by just 0.1 per cent in the EU during the first quarter of 2026.
Compared with the second quarter of 2025, GDP increased by 1.0 per cent in the euro area and 1.2 per cent in the EU, following annual growth of 0.5 per cent and 0.8 per cent respectively in the previous quarter.
The five-hour seminars, which will all be conducted in English, are primarily intended for certified persons seeking to comply with paragraph 17(2) of the Directive regarding the Certification of Persons and Certification Registers (44 of 2019).
The programme covers market abuse, ethics in financial services, anti-money laundering and the new European Anti-Money Laundering Authority (AMLA), with all sessions taking place on Saturdays.
Aikaterina Gkouma will deliver three seminars on the Market Abuse Regime on September 5, September 26 and October 17.
She will also lead three seminars on Ethics in Financial Services on November 7, November 21 and December 5.
The overall index reached 116.7 units against a base rate of 100 units established in 2021, reflecting a small expansion when compared to May 2025.
Across the broader five-month period running from January 2026 to May 2026, industrial output expanded by 1.5 per cent in comparison to the corresponding period of the previous year.
The core manufacturing sector saw an increase of 0.8 per cent in May 2026 relative to the same month in 2025.
Mining and quarrying operations also registered a positive performance, rising by 0.5 per cent over the same twelve-month comparative window.
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