Source: cyprus-mail.com
The Central Bank of Cyprus (CBC) this week published new figures showing that significant differences remain between interest rates offered by Cypriot banks and those prevailing across the eurozone, although the gap has narrowed in several categories.
Indeed, the latest CBC report showed that both deposit rates and lending rates in Cyprus continue to diverge from eurozone averages.
In the case of new household deposits with maturities of up to one year, the average interest rate in Cyprus stood at 1.20 per cent, compared with 1.89 per cent across the eurozone.
Among domestic institutions, the National Bank of Greece offered the highest rate at 1.55 per cent, while the Bank of Cyprus offered the lowest at 0.82 per cent.
For new deposits by non-financial corporations with maturities of up to one year, the average interest rate in Cyprus fell to 1.23 per cent, down from 1.39 per cent in the previous month.
This remained well below the eurozone average of 1.98 per cent.
In this category, Ancoria Bank provided the highest return at 1.64 per cent, while the Housing Finance Corporation offered the lowest rate at 0.78 per cent.
Interest rates on existing household time deposits with maturities of up to two years averaged 0.77 per cent, broadly unchanged from the previous two months and significantly lower than the corresponding eurozone rate of 1.72 per cent.
The highest rate in this category was offered by Jordan Kuwait Bank at 1.56 per cent, while the Bank of Cyprus provided the lowest rate at 0.51 per cent.
The Central Cooperative Bank and First Investment Bank recorded zero interest rates in this category.
For existing deposits held by non-financial corporations with maturities of up to two years, the average interest rate stood at 1.16 per cent.
This represented an increase from 1.05 per cent in February, but a slight decline from 1.19 per cent in March.
Even so, it remained considerably below the eurozone average of 2.04 per cent.
The highest rate was offered by the National Bank of Greece at 1.48 per cent, while Societe Generale offered the lowest rate at 0.75 per cent.
Turning to lending activity, the figures showed that the average interest rate on new housing loans, irrespective of the initial rate fixation period, reached 3.10 per cent in April.
This was slightly higher than the levels recorded in February and March, when the average stood at 3.04 per cent and 3.09 per cent respectively.
However, the corresponding eurozone average was higher at 3.45 per cent.
The lowest rate in this category was offered by the Cyprus Development Bank at 2.00 per cent, while Ancoria Bank recorded the highest rate at 3.44 per cent.
For new loans to non-financial corporations worth up to €1 million, the average interest rate stood at 4.17 per cent.
The lowest rate was offered by Ancoria Bank at 3.15 per cent, whereas Banque SBA charged the highest rate at 6.80 per cent.
In the category of new corporate loans exceeding €1 million, the average interest rate stood at 3.83 per cent.
The lowest rate was offered by Alpha Bank at 3.52 per cent, while the Bank of Cyprus recorded the highest rate at 4.40 per cent.
For existing housing loans with maturities exceeding five years, the average rate stood at 3.48 per cent.
This was marginally lower than the rate recorded in February and unchanged from March.
By comparison, the corresponding eurozone average stood at 2.46 per cent.
The Housing Finance Corporation offered the lowest rate in this category at 2.91 per cent, while the Bank of Cyprus recorded the highest rate at 3.71 per cent.
Meanwhile, the average interest rate on existing loans to non-financial corporations with maturities exceeding five years stood at 4.07 per cent, broadly unchanged from the levels recorded in February and March.
This compared with a eurozone average of 3.09 per cent, the CBC explained.
Among the institutions surveyed, Eurobank offered the lowest rate at 3.83 per cent, while Societe Generale recorded the highest rate at 4.99 per cent.
The figures demonstrate that although the gap between Cyprus and the eurozone has begun to narrow in some segments, Cypriot savers continue to receive lower returns on deposits, while borrowers generally face higher costs on existing loans than their counterparts elsewhere in the single currency area.