The Cypriot banking sector is experiencing impressive growth in lending activity. In the first six months of 2025, banks granted €2.5 billion in new loans to individuals and companies (excluding restructuring), which is 48.9% more than in the same period of 2024. For comparison, the market showed negative dynamics in the first half of 2024, declining by 3.7%.
According to the Central Bank of Cyprus, the main driver of this growth was the revival of business activity and investment demand amid lower base rates set by the European Central Bank. This enabled companies and households to make more active use of bank financing, particularly for capital investments and real estate purchases.
A sharp jump in business lending and growth in mortgage loans
Business loans have become a key element of growth. The total amount of new loans to companies in the first half of 2025 reached €1.7 billion — a 70.5% increase from €981 million in the first half of 2024, which is a record high. This is the highest figure since 2005, when the Central Bank began publishing these statistics.
Households also increased their borrowing activity; new loans to individuals reached €814 million, an 18.2% year-on-year increase. Notably, this figure exceeded the 2022 record high of €812 million.
Debt restructuring: A new wave
The number of refinanced and restructured loans is growing as well. In the first half of 2025, the volume of such transactions for individuals amounted to €435.6 million, compared to €264.2 million a year earlier. A similar trend is evident among companies, with €1.4 billion in 2025 compared to €823.5 million in 2024. This indicates that borrowers are seeking to adapt their credit burden to the new financing conditions.
June: peak activity thanks to major business deals
June was a particularly successful month for the Cypriot credit sector. Net new lending reached €642.8 million, up from €297.8 million in May. Total lending, including restructuring, exceeded €959 million. A significant portion of the increase was due to large loans of over €1 million to non-financial companies. Their volume increased from €82.6 million in May to an impressive €420.6 million in June.
Demand recovery: a trend seen for the first time since 2021
According to the Central Bank's latest report, net demand for corporate loans has grown steadily for the first time since late 2021. Reasons for this growth include lower interest rates, increased interest in real estate investment, and business expansion. Demand for loans, both from businesses and in the mortgage segment, is expected to continue growing in the second quarter of 2025. Meanwhile, demand for consumer and other loans from the population is expected to remain stable.
This lending boom highlights the return of confidence in Cyprus's financial system and the revitalization of economic processes. Banks, investors, and borrowers are optimistic, which makes the market more attractive for new investments and project development in the coming months.