From January to August 2025, the total volume of net new loans issued by Cypriot banks reached €3.178 billion, marking a 39.7% increase compared to the same period in 2024 (€2.276 billion). Data published by the Central Bank of Cyprus indicate that the country is experiencing the most dynamic credit expansion of the past decade.
The surge in lending reflects a strengthening business climate, rising investment interest, and the stabilization of the financial sector, supported by low interest rates and economic recovery following the inflationary fluctuations of 2023–2024.
Business Loans: Over €2 Billion and a 53.7% Increase
In the first eight months of 2025, net new business loans reached €2.083 billion, up 53.7% from 2024 (€1.355 billion). The majority came from large loans over €1 million, which totaled €1.7079 billion compared to €991.4 million a year earlier.
Loans under €1 million also rose slightly to €375.3 million, driven by the growth of small and medium-sized enterprises (SMEs), especially in the technology, construction, and green investment sectors, which benefit from EU programs and national funding initiatives.
Household Loans: Steady Growth Across All Categories
New household loans reached €1.095 billion from January to August 2025, an 18.9% increase compared to €920 million in 2024. The bulk came from mortgage loans, which totaled €859.1 million versus €700.3 million last year — a clear sign of stable housing demand and a reviving construction market.
Consumer loans also grew to €180 million (from €167.7 million), indicating rising consumer confidence and increased household spending. Other personal loans amounted to €55.7 million.
August 2025: Temporary Slowdown in Lending
Despite the overall growth, new net loans dropped to €245.5 million in August 2025, down from €445.3 million in July. The total new loans, including refinanced ones, amounted to €420.4 million.
This slowdown was largely seasonal and followed the completion of several large corporate transactions earlier in the summer. Analysts expect lending activity to accelerate again in September and October, driven by new mortgage applications and fresh investment programs.
Loan Reviews and Restructuring: Activity on the Rise
Between January and August 2025, the volume of restructured loans climbed to €2.262 billion, a 53% increase from the previous year (€1.474 billion). For households, the total was €563.4 million, while corporate restructurings reached €1.6986 billion.
In particular, large corporate loans over €1 million saw the most activity, rising to €1.501 billion. This trend reflects efforts by banks and businesses to adapt to new market conditions, optimize debt portfolios, and take advantage of more flexible repayment terms.
Outlook: A Sustainable Recovery of the Financial Sector
Experts predict that positive lending momentum will continue through the end of 2025. The main growth drivers are expected to be mortgage and corporate loans, while banks remain focused on asset quality and reducing non-performing loans.
A stable macroeconomic environment, support from the European Investment Bank, and the expansion of digital banking services are creating favorable conditions for continued credit growth and sustainable economic development in Cyprus.