17/02/2015 07:07
Approximately € 100 million may flow into the economy after the decision of the Central Bank to cut deposit rates by 1% and the decision of the major banks to transfer the benefit to some of the borrowers.
The CB announced a reduction in deposit rates by 1% while at the same time the major banks announced a decrease of 1% in their lending rates.
Bank of Cyprus announced a 1% reduction in interest rates, which will cover 180 thousand accounts of 94 thousand customers with the total annual benefit for borrowers amounting to € 57,4 million.
The reduction announced by the Bank of Cyprus affects about a third of its lending portfolio, or € 5,7 bn which is connected to the basic rate of BOCY.
The Cooperative announced a reduction of the interest rate in mortgage rates, the level of which depends on whether the loan is serviced or not.
The Cooperative, which has 40% of the mortgage market of € 13,7 bn., is estimated to have mortgages which amount to €5,5 billion. A reduction of performing mortgages by 1% was announced and 0.5% in non-performing mortgages which begin to be served.
Depending on the level of non-performing loans, the resulting benefits will be in the area of € 40 million.
Hellenic Bank announced that, following the decision of the CB it will decide to reduce its key interest rate by 1%. If applied on the Bank’s mortgage loans of up to € 0,7 billion, the benefit could reach € 7 million.
The reduction of interest rates is expected to be applied from March 1, 2015, at a difficult time for the Cypriot economy.
The evidence so far is that the economic recession accelerates, despite recovery expectations in 2015.
The reduction of interest rates, benefits more than 100 thousand borrowers who will pay lower monthly installments. As shown in the example, for a loan of € 100 thousand the monthly benefit from the reduction of interest rates by 100 basis points is between € 50 and € 70, depending on the duration of the loan.
The deposit and lending rates of the Cypriot banks remain the highest in eurozone.
According to the latest ECB data, interest rates on new deposits in Cyprus stood at 2.63% in December 2014 from 2.59% in November and 2.23% in December 2013.
Mortgage rates in Cyprus increased in the last month of 2014 reaching 5.04% from 4.74% in November and 4.93% in December 2013. The average interest rate on corporate loans increased to 5.88% from 5.83% the previous month and 6.16% in December 2013.
The CB made a similar intervention in the market in April 2013, which resulted mainly to the reduction of the deposit rates, and to a lesser extent, of the lending rates.
The CB announced a reduction in deposit rates by 1% while at the same time the major banks announced a decrease of 1% in their lending rates.
Bank of Cyprus announced a 1% reduction in interest rates, which will cover 180 thousand accounts of 94 thousand customers with the total annual benefit for borrowers amounting to € 57,4 million.
The reduction announced by the Bank of Cyprus affects about a third of its lending portfolio, or € 5,7 bn which is connected to the basic rate of BOCY.
The Cooperative announced a reduction of the interest rate in mortgage rates, the level of which depends on whether the loan is serviced or not.
The Cooperative, which has 40% of the mortgage market of € 13,7 bn., is estimated to have mortgages which amount to €5,5 billion. A reduction of performing mortgages by 1% was announced and 0.5% in non-performing mortgages which begin to be served.
Depending on the level of non-performing loans, the resulting benefits will be in the area of € 40 million.
Hellenic Bank announced that, following the decision of the CB it will decide to reduce its key interest rate by 1%. If applied on the Bank’s mortgage loans of up to € 0,7 billion, the benefit could reach € 7 million.
The reduction of interest rates is expected to be applied from March 1, 2015, at a difficult time for the Cypriot economy.
The evidence so far is that the economic recession accelerates, despite recovery expectations in 2015.
The reduction of interest rates, benefits more than 100 thousand borrowers who will pay lower monthly installments. As shown in the example, for a loan of € 100 thousand the monthly benefit from the reduction of interest rates by 100 basis points is between € 50 and € 70, depending on the duration of the loan.The deposit and lending rates of the Cypriot banks remain the highest in eurozone.
According to the latest ECB data, interest rates on new deposits in Cyprus stood at 2.63% in December 2014 from 2.59% in November and 2.23% in December 2013.
Mortgage rates in Cyprus increased in the last month of 2014 reaching 5.04% from 4.74% in November and 4.93% in December 2013. The average interest rate on corporate loans increased to 5.88% from 5.83% the previous month and 6.16% in December 2013.
The CB made a similar intervention in the market in April 2013, which resulted mainly to the reduction of the deposit rates, and to a lesser extent, of the lending rates.
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