New bank loans up 22% in 2021
Total new bank loans in Cyprus increased by 22.2% in 2021 compared to the previous year, coming close to the levels of pre-coronavirus 2019, with deposits also taking off.
According to the Central Bank of Cyprus (CBC) data, new loans in 2021 reached EUR 2.9 bln, up from EUR 2.4 bln in 2020, an increase of 22.2%.
Compared to 2019, total loans show a small decrease of 1.5%.
Total loans extended by banks to households and businesses, excluding restructuring, amounted to EUR 2.939 bln from EUR 2.4 bln in 2020 and EUR 2.984 bln in 2019. New business loans show an increase of 16.1%.
They amounted to EUR 1.5 bln from EUR 1.3 bln in 2020. Compared to 2019, business loans dropped by 12.5%. New loans to households increased by 29.8% compared to
2020, amounting to EUR 1.39 bln from EUR 1.07 bln.
New loans to households increased by 14.4% compared to 2019. Some EUR 326.2 mln worth of household loans were restructured in 2021 from EUR 217.4 mln in 2020 and EUR 156.4 mln in 2019.
Banks restructured business loans worth EUR 1.99 bln, compared to EUR 536.5 mln in 2020 and EUR 419.9 mln in 2019.
Meanwhile, Cyprus banks’ lending balances have decreased due to increased deposits amid the improved macroeconomic environment, particularly low lending rates.
This means that banks now have excess liquidity in their coffers that exceeds EUR 20 bln, as customer deposits increase.
According to CBC data, Cyprus banks have excess liquidity of EUR 21.7 bln, with deposits having increased in 2021 by EUR 3.13 bln.
In December 2021, deposits recorded a net increase of EUR 331.2 mln, from a net increase of EUR 480.8 mln in November.
Household deposits at the end of December increased by EUR 514.5 mln, while last month there was a decrease of EUR 14.1 mln.
Business deposits for the first time in 2021 decreased in December to EUR 200.7 mln. In November, the increase was EUR 277.4 mln. Deposits of insurance companies and pension funds fell by EUR 45 mln in December, and outflows were EUR 9 mln in November.
Regarding other financial intermediaries, there was an increase in deposits of EUR 84.6 mln in December, while in November, the increase was EUR 232.4 mln.