Bank deposits, loans gap reduced to post-crisis low


By Stelios Orphanides

The gap between deposits and loans in the Cypriot banking system shrank last month to a mere €3.1bn, the narrowest since January 2013, two months before the bail-in, the central bank said.

Total deposits in the banking system rose last month by €335.1m to €49.5bn while total loans fell by €110m to €52.5bn, the lowest since September 2008, the month in which Lehman Brothers collapsed dragging the world financial sector into chaos, the Central Bank of Cyprus said in a statement on its website.

The increase in deposits in September was mainly on €181m in inflows to accounts held by non-financial corporations and €97.2m to household accounts which saw their balance increase to €11.8bn and €28.8bn respectively, the bank supervisor said. Other financial intermediaries saw their deposits increase by €73.8m to €6.2bn while those held by insurance corporations and pension funds decreased by €33.5m to below €2bn.

The decrease in loans was mainly on deleveraging among households which repaid their loans to banks by €58.6m last month to €21.7bn, the central bank said. Other financial corporations reduced their outstanding loans by €37.8m to €8.7bn while net loan repayments of non-financial corporations was €4.7m reducing their debt to €21.3bn.


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Stelios Orphanides is a journalist at To contact Stelios Orphanides: [email protected]

  • Douglas

    No surprise there then 🙂

  • Bruce

    Looked at another way one could argue that Cyprus banks are insolvent since deposits of 49.5 billion euro are liabilities which should be honored whereas collections from loans valued at 52.5 billion are estimated to be no more than 28.9 billion euro if the NPL ratio is around 45%.This leaves a gap of 23.6 billion euro which is hardly covered by capital and provisions.