The Cypriot banking sector witnessed a significant expansion in February 2026, characterized by a double-digit surge in borrowing and a healthy recovery in deposit levels. According to the latest monetary report released by the Central Bank of Cyprus (CBC) on Thursday, total loans jumped by 12.3% annually, while deposits maintained a steady growth rate of 4.7%.
The data suggests a robust appetite for credit among both families and businesses, signaling continued confidence in the island’s economic trajectory.
The Loan Boom: A €27.3 Billion Portfolio
Borrowing activity accelerated sharply in February, with the annual growth rate climbing to 12.3%—up from 11.2% in the previous month. Total outstanding credit across the system has now reached €27.3 billion.
A Closer Look at the New Credit:
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Net Monthly Increase: The system saw a net injection of €326.2 million in new loans during February alone.
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Corporate Demand: Non-financial corporations led the charge with a €60.7 million increase in their debt portfolios.
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Household Borrowing: Resident families added €54.9 million in new loans, likely driven by the ongoing demand in the housing and consumer sectors.
Savings Rebound: Deposits Hit €57.2 Billion
After a sharp decline in January, the island’s savings landscape stabilized significantly in February. The banking system recorded a net increase of €202.2 million in deposits, contrasting sharply with the €851.2 million withdrawal seen at the start of the year.
Who is saving?
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Local Residents: Total deposits from Cyprus residents rose by €250 million.
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Families: Households were the primary savers, contributing €104.1 million to the monthly increase.
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Corporate Shifts: In contrast, non-financial corporations reduced their cash holdings by €32.2 million, likely reallocating those funds toward investments or loan repayments.
Liquidity and Stability
With total deposits (€57.2 billion) still more than double the amount of outstanding loans (€27.3 billion), the Cypriot banking system remains highly liquid. The 4.7% annual growth in deposits indicates that despite inflationary pressures, residents are still finding ways to bolster their “rainy day” funds.
The Central Bank’s figures highlight a banking environment that is successfully balancing the needs of a credit-hungry market with a stable and growing deposit base, providing a solid foundation for the remainder of the 2026 fiscal year.
Source: Stockwatch.com.cy