Total new loans granted by Cypriot banks fell by 9% in the first four months of 2026, with April showing a slowdown across all lending categories compared with March. The broader climate of uncertainty appears to have put businesses and households in a wait-and-see mode. However, banks do not see a reversal of the trend, with demand remaining resilient.
According to data from the Central Bank processed by Politis, total new loans in the first four months of 2026 declined by 9.3% year-on-year to €1.4 billion from €1.5 billion.
Total new loans to households reached €571.8 million compared with €498.3 million in the corresponding period of 2025, recording an annual increase of 14.8%, the highest four-month level since 2022. Household loan restructurings fell to €181.4 million from €282.7 million last year.
New mortgage loans reached €459.6 million in the first four months of 2026, up from €382.3 million in the same period of 2025 – the highest level since 2022. The increase is also supported by the decline in interest rates since 2024.
New consumer loans fell slightly to €85.4 million from €87.9 million last year. Other loans declined to €26.8 million from €28.1 million.
Business loans
New business lending recorded a sharp decline of 21%, mainly due to a drop in loans exceeding €1 million. Total new business loans fell to €830.8 million from €1 billion in the same period last year.
Loans up to €1 million increased to €181.7 million from €158.3 million, while loans above €1 million fell significantly to €649.1 million from €890 million.
Restructurings of business loans declined to €612.7 million from €772.9 million last year.
In April, new lending decreased across all categories. Net new housing loans dropped to €106 million from €142.8 million in March, while business loans above €1 million fell to €156.8 million from €266.9 million. Total net new lending declined to €331.3 million from €495.3 million in the previous month.
Demand remains strong
Following the Central Bank’s publication of the data, Politis asked banks to comment on lending trends.
A Bank of Cyprus representative said demand for mortgage loans remains at very strong levels, with increased interest, while demand for business lending also remains satisfactory. “So far we do not see a negative impact of the war on loan demand. On the contrary, the first quarter of 2026 was very strong, with the loan portfolio increasing by 2% compared with the end of the previous year,” the representative said.
Eurobank also told Politis that demand remains stable, supported by relatively strong economic conditions, low unemployment, high employment levels and relatively high rents.
At the same time, the bank noted that demand from abroad remains steady, driven by the inflow of foreign workers to Cyprus, mainly in the information and communication technology sector.
“We continue to support business clients and households through sustainable lending, which is evident from our various initiatives,” the bank said.
