In December, total loans fell an annual 11% while deposits rose also an annual 6.2%, the central bank said in a statement on its website on Friday. As the banks continue to struggle with roughly half of their loan portfolio non-performing, overall loan repayments exceeded the increase in deposits, with the exception of third country residents who reduced both their loans and deposits last year.

Over January to December last year, the cumulative monthly drop in loans reached €6.8bn, broken down in €4.3bn decrease in loans extended to Cyprus residents, to a €1.9bn drop in loans extended to other euro area residents and €573.2m decrease in loans to third country residents, reflecting the ongoing deleveraging, the central bank said.

The deleveraging affected mainly other financial intermediaries, whose net loans dropped in 2016 by over €4bn cumulatively, compared with a drop of €2.4bn in loans extended to non-financial corporations and €303m in household loans, the central bank said.

The cumulative monthly increase in deposits in January to December was €2.8bn and was broken down to a net increase in excess of €3bn in deposits held by Cyprus residents, a €548.2m increase in deposits of residents of other euro area countries and a net drop of €771.9m of third country residents, the central bank said.

Total deposits held by other financial intermediaries dropped last year by a cumulative €345.2m while those of non-financial corporations and households rose by €1.1bn and €878.3m, the central bank said. The Cypriot government also increased its deposits at Cypriot banks by €421.6m last year.

Domestic non-financial companies and households saw last year their deposits rise by €1.1bn and €657m to €7.4bn and €23.1bn, against a drop in their outstanding credit to Cypriot banks of €334.4m and €206.2m to €20.1bn and €20.8bn respectively, the supervisory authority said.

Source: Cyprus Mail