Despite economic difficulties and inflation, deposits in Cyprus continue to grow. According to data released by the Central Bank, from the beginning of the year until the end of May, total deposits in the banking system increased by €1.45 billion. This increase occurred despite the fact that banks offer low deposit interest rates, which has drawn criticism from both the Finance Minister Makis Keravnos and political parties. Depositors looking for higher returns must be patient, as better interest rates are only offered for funds locked in for at least a year.
In May 2024 alone, total deposits recorded a net increase of €925.7 million, compared to a net increase of €209.1 million in April 2024, €252.1 million in March, €63.2 million in February, while January saw outflows of €366 million. The annual growth rate of total deposits reached 2.8%, compared to 1.4% in April 2024.
As of May 2024, the balance of total deposits reached €53.3 billion. The deposit inflow for May 2024 is among the highest in the past six years. For instance, in May last year, new deposits amounted to €164.8 million. In May 2022, there was an outflow of €166.9 million. In May 2021, deposits increased by €330 million, while May 2020 saw an outflow of €30.8 million. In May 2019, deposits rose by €688.3 million, and in May 2018, the increase was €201.2 million.
Specifically, household deposits increased by €107.6 million in May 2024, compared to an increase of €33.5 million in April and €100.6 million last year. Business deposits rose by €315.1 million in May, compared to an increase of €136.2 million in April and €197.6 million last year. Deposits from other financial intermediaries increased by €350 million, compared to an increase of €3.9 million in April. However, deposits from insurance companies and pension funds decreased by €9.3 million in May, compared to an increase of €22.4 million in April.
Deposits from Cyprus residents increased by €778.8 million in May, deposits from non-EU residents rose by €27.5 million, while deposits from residents of other EU countries increased by €119.5 million.
Regarding lending, Central Bank data shows that total loans in May 2024 recorded a net increase of €70.2 million, compared to a net decrease of €278.6 million in April 2024. The annual growth rate of total loans reached 1.2%, remaining unchanged compared to April 2024. The balance of total loans in May 2024 reached €24.9 billion. Loans to Cyprus residents increased by €59.6 million. Specifically, loans to households and non-financial corporations increased by €3.4 million and €62.2 million, respectively. Loans to other domestic sectors showed a total decrease of €6 million.
