Bank of Cyprus CEO Panicos Nicolaou announced today that borrowers will begin seeing reductions in their loan instalments, with the downward trend already underway, during the presentation of the bank’s nine-month results for 2024.
According to the bank’s data, approximately one-quarter of the group’s loan portfolio is linked to the bank’s base rate, which acts as a natural hedge against deposit costs.
Nicolaou and Charis Pouangare, deputy CEO and head of business banking, explained that unlike abroad, where fixed-rate loans are in high demand, Cypriot customers generally do not prefer fixed-rate loans. The most popular product at Bank of Cyprus remains the mortgage loan with a three or five-year fixed rate period.
New lending in the third quarter of 2024 comprised €180 million in corporate loans, €188 million in retail banking (including €117 million in mortgages), €48 million in SME loans, and €65 million in shipping and international operations. Total new lending for the nine months ended 30 September 2024 reached €1.708 billion, up 9% year-on-year, primarily driven by increased corporate loan demand.
Nicolaou explicitly stated that the bank does not finance high-rise developments and therefore has no exposure to developers in this sector.
The group’s total deposits approach €20 billion, with Russian deposits accounting for less than 1%. Nicolaou emphasised that these figures demonstrate the bank has no significant relationship with Russian deposits.
The ECB’s supervisory approval requirement for dividend payments is expected to be lifted in January 2025, which Nicolaou said demonstrates the bank’s continued strong financial and operational performance as it transitions to a lower interest rate environment.
“Our loan portfolio quality remains healthy, as evidenced by our NPL ratio of 2.4% and NPL coverage ratio exceeding 95%”, he concluded.
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