Cypriot banks’ record profits
Cypriot banks are maintaining a low profile, but 2024 will likely bring higher profits than the record-breaking figures of 2023.
Last year marked unprecedented success in terms of profits, driven by the European Central Bank’s decision to keep interest rates unchanged. This allowed Cypriot banks to maximize their deposits with the central bank, while loans tied to Euribor and ECB interest rates also contributed significantly to profits.
Forecasts suggest that this year’s profits for Cypriot banks could exceed 1.2 billion euros, a figure consistent with past trends. In 2023, bank revenues were primarily boosted by a significant rise in net interest income, fueled by increasing loan interest rates, in contrast with stagnant deposit rates.
While some deposit returns are anticipated in 2024, the gap between deposits and loans is expected to persist, unlikely to diminish the substantial net profits projected to surpass those of 2023. This is based on the ECB’s interest rate hikes, particularly notable in 2023 with six increases compared to four in 2022. Cyprus banking executives acknowledge a shift in lending dynamics in 2024, prompting a strategic shift to alternative revenue streams independent of lending.
