Both deposits and loans in the Cypriot banking system experienced a decrease last month, according to the August 2023 edition of ‘Monetary and Financial Statistics,’ published this week by the Central Bank of Cyprus (CBC).
Total deposits in July 2023 witnessed a net decrease of €301.1 million, compared with a net increase of €399.2 million in June 2023. This shift was primarily due to a net reduction of €227.9 million in domestic resident deposits. Meanwhile, household deposits recorded a decline of €74.7 million.
On the contrary, there was an uptick of €184.3 million in deposits held by the General Government, mitigating the overall reduction in deposits.
The annual growth rate stood at 2.4%, compared with 2.7% in June 2023. The outstanding amount of deposits in July 2023 stood at €51.9 billion.
Total loans last month saw a net decrease of €100.3 million, compared with a net increase of €123.2 million in June 2023. The decrease in loans can primarily be attributed to a decrease in domestic resident loans by €109.9 million. An increase of €9.2 million was recorded in loans to residents of other EU member states.
The annual growth rate stood at -1%, compared with -1.2% in June 2023. The outstanding amount of total loans reached €25 billion in July 2023.
Τhe term “net decrease/increase” represents the term “transactions”, i.e. it does not include the changes resulting from reclassifications, exchange rate and other adjustments, CBC noted.
Cypriot banks’ credit profiles have improved in the past year due to de-risking and restructuring, Fitch Ratings says in report last month. Fitch has taken positive rating actions on all Greek and Cypriot banks in the past twelve months. The banks’ non-performing exposures (NPEs) have fallen significantly since 2020. The credit rating agency expects aggregate NPEs to fall further