Cypriot banks offer low interest rates on household deposits, slightly above those in Bulgaria, but excel in capital returns with a 26.3% return on capital for 2023, ranking second in Europe. Despite the challenges posed by slow economic growth and rising interest rates, the banks’ adaptability and strategic decisions will shape their future trajectory.
banking sector developments
Fitch Ratings has revised Cyprus’ longterm outlook from stable to positive, indicating confidence in the country’s economic resilience, fiscal management, and improvements in the banking sector. The agency predicts a government budget surplus and increasing GDP, with a decrease in nonperforming loans contributing to financial stability, although regional geopolitical risks remain a concern.