Cyprus’ financial sector continues to demonstrate steady growth. According to new data from the Central Bank, both deposits and lending increased in June 2026 compared with May. This indicates continued strong business activity, growing depositor confidence, and sustained demand for financing from households and businesses. Experts note that, against the backdrop of gradually declining interest rates in the eurozone and the resilience of the Cypriot economy, the banking system remains one of the most stable in the region.
Deposits
By the end of June 2026, total deposits in Cyprus’ banking system had increased by €601.2 million. By comparison, the net increase in May amounted to €343.8 million. The annual growth rate of deposits edged down slightly to 5%, from 5.1% a month earlier, while the total amount held in accounts reached €58.7 billion. Cyprus residents made the largest contribution to the increase:
- total deposits by residents increased by €626.2 million;
- household deposits rose by €49.7 million;
- deposits by non-financial companies increased by €480.3 million;
- other domestic sectors placed an additional €96.2 million in banks.
The increase in deposits indicates that liquidity in the banking system remains high. It also creates favourable conditions for further lending to the economy.
Loans
Cypriot banks also significantly increased lending in June. The total volume of new loans rose by €499.4 million, compared with an increase of €260.3 million in May. At the same time, the annual growth rate of the loan portfolio stood at 11.6%, down from 12.6% a month earlier. Despite the slight slowdown, the total volume of outstanding loans reached €28.6 billion. Among Cyprus residents:
- total lending increased by €213.7 million;
- loans to households rose by €131.4 million;
- financing for non-financial companies increased by €90.1 million;
- lending to other domestic sectors decreased by €7.8 million.
What the Increase in Deposits and Loans Means
A simultaneous increase in deposits and lending is generally considered a positive signal for the economy. Households continue to actively place funds in banks, while businesses and private borrowers maintain demand for financing. In recent months, mortgage and corporate lending in Cyprus has been supported by the gradual decline in borrowing costs following changes in the European Central Bank’s monetary policy. At the same time, the banking system continues to maintain high levels of capitalisation and liquidity, allowing credit institutions to finance the economy more actively.
According to analysts, deposits and lending may continue to grow moderately during the second half of 2026. However, future trends will depend on the European Central Bank’s interest-rate decisions, inflation in the eurozone, activity in Cyprus’ property market, and the overall economic situation in the region.