05/11/2015 07:05
Demand for loans is slowly recovering new data released by the European Central Bank show, reinforcing the view that the economy is gradually rebounding albeit at a slow pace.
After a number of years, this year's interest rate cuts at historically low levels and positive prospects for the economy are leading to a slow return of businesses and households to banks for loans.
The change in borrowers' behavior is especially evident in housing loans and to a lesser degree in businesses.
In spite of the low-interest loans through the European Investment Bank, the business community appears to still be affected by the large debt companies accumulated in their balance sheets.
According to new data from the European Central Bank processed by Stockwatch, new business loans have increased by 3.1% yoy in January-September, reaching € 930 mn from € 902 mn last year.
In September the amount reached €101 mn from € 46 mn in August.
As regards new housing loans an increase of 18.3% was recorded in the first nine months of 2015, with the amount reaching € 452 mn from € 382 mn in the corresponding period last year. In September 2015 € 59 mn were channeled to the market in new mortgages, compared with € 45 mn in the previous month.
In the first nine months of 2010 more than €2 bn were channeled in the market in mortgages while in 2013 the amount was more than € 1 bn as shown in the table.
Data also show that the "bad habit" of Cypriots to borrow for consumption purposes is slowly returning although the figures are small.
New consumer loans increased in January - September 2015 by 20.9% to € 81 mn from € 67 mn last year. In September consumer loans reached € 11 mn from € 8 mn in August.
Based on the latest available data interest rates in Cyprus have been reduced by about 100 basis points after the CB's intervention in February.
They are currently at their lowest levels ever, although they are still among the highest in Europe.
After a number of years, this year's interest rate cuts at historically low levels and positive prospects for the economy are leading to a slow return of businesses and households to banks for loans.
The change in borrowers' behavior is especially evident in housing loans and to a lesser degree in businesses.
In spite of the low-interest loans through the European Investment Bank, the business community appears to still be affected by the large debt companies accumulated in their balance sheets.
According to new data from the European Central Bank processed by Stockwatch, new business loans have increased by 3.1% yoy in January-September, reaching € 930 mn from € 902 mn last year.
In September the amount reached €101 mn from € 46 mn in August.As regards new housing loans an increase of 18.3% was recorded in the first nine months of 2015, with the amount reaching € 452 mn from € 382 mn in the corresponding period last year. In September 2015 € 59 mn were channeled to the market in new mortgages, compared with € 45 mn in the previous month.
In the first nine months of 2010 more than €2 bn were channeled in the market in mortgages while in 2013 the amount was more than € 1 bn as shown in the table.
Data also show that the "bad habit" of Cypriots to borrow for consumption purposes is slowly returning although the figures are small.
New consumer loans increased in January - September 2015 by 20.9% to € 81 mn from € 67 mn last year. In September consumer loans reached € 11 mn from € 8 mn in August.
Based on the latest available data interest rates in Cyprus have been reduced by about 100 basis points after the CB's intervention in February.
They are currently at their lowest levels ever, although they are still among the highest in Europe.
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