Spike in renegotiated bank loans over €1 mln

A surge in renegotiated corporate loans over EUR 1 mln pushed new loan contracts in March 2021 to a 91% increase compared with February, Central Bank of Cyprus data show.

Pure new loans in the Cyprus banking system registered an increase of 23.8% in March from February, amounting to EUR 255 mln.

According to the CBC, housing loans rose to EUR 85.6 mln in March, accounting for one-third of pure new credit for the month.

Housing loans are buoyed by a government scheme subsidizing new mortgage loans to reduce the impact of the covid pandemic.

New credit to companies over EUR 1 mln amounted to EUR 81.7 mln in March, while new corporate credit to companies up to EUR 1 mln reached EUR 57 mln.

Pure consumer credit in March reached EUR 14.2 mln while other pure loans were EUR 16.4 mln.

Total restructured loans were EUR 356.6 mln with renegotiated corporate loans over EUR 1 mln at EUR 295 mln, accounting for 82% of renegotiated loans.

Renegotiated loans up to EUR 1 mln amounted to EUR 34 mln, renegotiated mortgages rose to EUR 19 mln, while renegotiated consumer and other loans were EUR 4 mln and EUR 4.5 mln, respectively.

Moreover, deposit interest rates remained at historic low levels.

The interest rate on deposits from households with an agreed maturity of up to one year remained unchanged at 0.08% in March. The corresponding interest rate on deposits from non-financial corporations registered a decline to 0.08%, from 0.13% in the previous month.

The interest rate on consumer credit decreased to 2.92%, from 3.11% the previous month, the interest rate on mortgages rose to 2.17% from 2.15% in February.

The interest rate on loans to non-financial corporations for amounts up to EUR 1 mln increased to 3.34%, from 3.19%.

Loan rates to non-financial corporations for amounts over EUR 1 mln rose to 3.37%, compared with 2.48% the previous month.