Central Bank of Cyprus

A new dawn breaks in Cypriot banking with the appointment of Christodoulos Patsalides as the Central Bank of Cyprus' new governor, heralding both promise and challenge.

Career banker Christodoulos Patsalides was appointed governor of the Central Bank of Cyprus on Monday for a five-year term, the island's presidency said.

Patsalides, who will represent Cyprus on the rate-setting Governing Council of the ECB, takes up his duties on April 11, replacing Constantinos Herodotou.

Total deposits in Cypriot banks recorded a significant net increase by €65.4 million euros in February, following a slump of €366 million the previous month, while loans recorded a large net increase of €348.9 million after a net decrease of €122.9 million recorded in January.

New lending by Cypriot banks declined significantly in January on a monthly basis, as it amounted to just 462.7 million euros, from €725.4 million in December, according to data released by the Central Bank of Cyprus on Monday. 

Greek central banker Yannis Stournaras is to sign a memorandum of cooperation between the Bank of Greece and the Central Bank of Cyprus on Friday.

To this end, Stournaras will visit Cyprus at the invitation of the governor of the Central Bank of Cyprus (CBC), Constantinos Herodotou, accompanied by the deputy governor of the Bank of Greece, Christina Papakonstantinou.

The governor of the Central Bank of Cyprus has dispatched crucial correspondence to banks and credit repurchase companies shedding light on the strategy for restructuring nonperforming loans (NPLs) and navigating credit risk management.

Nonperforming loans in the Cypriot banking system remained essentially unchanged at 2 billion euros in October 2023, marking a marginal reduction of just €2 million, in an environment of rising interest rates.

According to data released by the Central Bank of Cyprus on Tuesday, bad loans in October amounted to €2.015 billion from €2.017 billion the month before.

Cyprus experienced a real estate boom in the third quarter of 2023, with housing prices soaring and a surge in demand from both domestic and foreign buyers, according to data released by the Central Bank of Cyprus (CBC) on Wednesday. The Residential Property Price Index (RPPI) maintained by the CBC demonstrates a consistent upward trajectory, signaling annual and quarterly increases.

Half of the loans in Cyprus are vulnerable to shifts in the Euribor and the European Central Bank's (ECB) key rates, though no further increases are expected in 2024 and 2025, but rather possible decreases, according to the latest Financial Stability Report for 2022 by the Central Bank of Cyprus.

The Central Bank of Cyprus (CBC) issued a warning on Monday, cautioning about the potential growth of nonperforming loans (NPLs) driven by high-interest rates and inflation, which are impacting households' disposable income and businesses' profitability.