articles | 04 July 2023

Cyprus banking system on solid footing, says EBA president

The liquidity and capitalisation of the Cypriot banking system are above the European Union average, while efforts on reducing non-performing loans are progressing well, the president of the European Banking Authority (EBA) Jose Manuel Campa said on Tuesday.

Campa’s comments came after a meeting with President Nikos Christodoulides at the Presidential Palace, in the presence of the Governor of the Central Bank of Cyprus, Constantinos Herodotou. Moreover, during his own remarks after the meeting, Herodotou thanked the president of the European Banking Authority for accepting the invitation to visit Cyprus, emphasising the close cooperation between the authority and the Central Bank of Cyprus. He recalled that the implementation of the moratorium on loan repayments during the initial period of pandemic-related restrictions was made possible thanks to the regulations adopted by the authority, in collaboration with the Central Bank of Cyprus, ensuring the protection of citizens under the given circumstances.

Regarding the meeting with the Cypriot president, Herodotou mentioned that discussions focused on banking sector matters, as well as broader economic and current affairs. On his part, the European Banking Authority president commented on Cyprus’ banking system, stating that liquidity and capitalisation levels are above the EU average, describing them as being very good. At the same time, he added that banks have reduced non-performing loans to levels close to the EU average.

He further explained that European banks are currently adapting to the prevailing economic cycle with higher interest rates, while continuing to support the economy. 

Finally, Campa also mentioned that the European Banking Authority will publish the results of the banking sector stress tests at the end of the month, expressing hope that these results will continue to fuel the confidence of European citizens regarding the state of the banking sector.

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