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Economy and Banking Sector of Cyprus

Financial Market Development

Financial Market Development
3.4 (max 7.0), 108th out of 138 countries
Banks' Soundness
3.3 (max 7.0), 127th out of 138 countries

According to World Economic Forum's Global Competitiveness Report 2017-2018, financial market development in Cyprus is scored 3.4 out of maximum 7.0 and ranked 108th out of 138 analysed economies, trustworthiness and confidence of financial market is scored 3.8 (99th place).

Financial Market Development in Cyprus.

Chart 1. Financial Market Development in Cyprus. Source: WEF.


Soundness of banks is scored 3.3 bringing Cyprus into the 127th place.

Soundness of Banks in Cyprus.

Chart 2. Soundness of Banks in Cyprus. Source: WEF.

Further Information

Banking Focus

Banks in Cyprus are mainly focused on the following areas:

  • cooperative universal banking
  • universal banking
  • retail and corporate banking

Banking Supervision

Central Bank of Cyprus

Banking Sector Structure

Number of Banks
30
Consolidated Assets (2018)
59,633.84 mln EUR  (-11.84%)
Recent Changes (2018)
new banks: 0, closed banks: 12

Currently there are 30 credit institutions operating in Cyprus.

In 2018 consolidated banking assets in Cyprus were 59,633.84 mln EUR. The consolidated banking assets' evolution is shown at Chart 3 below.

Consolidated banking assets in Cyprus.

Chart 3. Consolidated banking assets in Cyprus.

Recent structural changes (2013 - 2018) of the banking sector of Cyprus are summarised in Table 1.

201320142015201620172018
Number of Opened Banks011000
Number of Closed Banks2645222012

Table 1. Recent structural changes in the banking sector of Cyprus.

The list of the most recently opened banks in Cyprus is provided in Table 2.

NameStart Date
EFG Bank (Luxembourg) S.A. (new)May 2015
Ancoria Bank Limited (new)December 2014
 

Table 2. The most recently opened banks in Cyprus.

All the credit institutions operating in Cyprus can be classified into several categories. Table 3 summarises the number of banks in each category.

CategoryNumber of Banks
Banks11
Branches of foreign banks18
Central banks1

Table 3. Number of banks by category in Cyprus.

There are 18 branches of foreign banks from 7 different countries in Cyprus. Table 4 shows the number of branches grouped by the country of origin.

Country of OriginNumber of Branches
 Lebanon9
 Jordan3
 Bulgaria2
 France1
 Greece1
 Ukraine1
 Luxembourg1

Table 4. Number of branches of foreign banks in Cyprus grouped by country of origin.

Deposit Guarantee Scheme

Maximum Protected Amount
100,000 EUR

Deposit guarantee scheme is a financial stability mechanism implemented in many countries to protect bank depositors against the loss of their deposits in the case when a bank is unable to meet its obligations to depositors by compensating certain deposits held by depositors of the bank. This compensation is paid out from the contributions which banks have made into a deposit guarantee fund.

From a depositor's point of view it is important to know:

  • if the depositor is eligible within the terms of the deposit guarantee scheme;
  • if the depositor's bank is a participant in the deposit guarantee scheme;
  • if the depositor's type of deposit is covered by the deposit guarantee scheme.

All these details about deposit guarantee scheme in Cyprus are summarised in Table 5.

Maximum Protected Amount
100,000 EUR
Temporary High Balance
150,000 EUR
Scheme Participants
all credit institutions operating in Cyprus (including branches of foreign banks)
branches of Cyprian banks abroad
Eligible Depositors
natural persons
  • citizens of Cyprus
  • residents of Cyprus
  • foreign citizens
  • foreign residents
legal entities
  • registered in Cyprus
  • registered abroad
Non-Eligible Depositors
banks
cooperative credit institutions
investment firms
insurance undertakings
public funds
public authorities
Covered Currencies
all currencies, namely
  • EUR (Euro)
  • foreign currencies
Paid In Currency
EUR

Table 5. Deposit guarantee scheme in Cyprus.

Further Information

Country Ceiling for Deposits

Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.

Local Currency (Euro)
A3 (upper medium grade)
Foreign Currency
A3 (upper medium grade)

Local currency (Euro) deposit ceiling for Cyprus is set to A3 (upper medium grade), foreign currency deposit ceiling is A3 (upper medium grade).

Deposit Rates

Average Deposit Rate (Feb 2019, EUR)
0.38 %  (Jan 2019: 0.36 %)
In February 2019, an agreed annualised deposit rate in local currency (Euro) of new contracts with agreed maturity up to 1 year between credit institutions and households was 0.38% which was above the Euro Area average (0.32%).
Deposit Rates in Cyprus.

Chart 4. Deposit Rates in Cyprus. Source: ECB.

Further Information