articles | 15 January 2024

Cyprus banks among most profitable in Eurozone

Banks in Cyprus and Hungary are the most profitable for shareholders, the European Banking Authority (EBA) said on Friday, regarding the risk of Eurozone banks.

As of the end of September 2023, the Return on Equity (RoE) for Cypriot banks increased to 25.2 per cent, a rise of 2.8 per cent over September 2022. This positions Cyprus in the second slot, with Hungary taking the top rank with an impressive RoE of 28.4 per cent. On average European banks maintained an RoE of 10.9 per cent during the same period. This was maintained by broadening net interest margins, standing at 1.62 per cent in the third quarter of 2023, and the net interest income. Despite the generally positive financial outlook, lending growth across the European Union has been lethargic due to more harsh lending standards.

The EBA’s autumn Risk Assessment Questionnaires (RAQs) indicated that banks remain cautious about lending. However, the survey did not observe a reduction in outstanding loans to non-financial firms and households.

Concerning non-performing loans, Cyprus reported a ratio of 2.6 per cent at the end of September 2023, down from 3.2 per cent in the same period the previous year. The European banking system averaged 1.8 per cent of bad loans, maintaining consistency with the corresponding period last year.

Source: Cyprus Mail

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