In a written statement, the CBC announced that the increase in total deposits dwarfed the increase registered in April 2014 – €264.7 million. The annual rate of change, -7.4% in May, also fell as April saw a -10.3% drop compared to the previous year.

According to the CBC statement, total deposits in May 2014 were €46.9 billion.
 Total loans for May 2014 showed a net decrease of €255.5 million, compared to a net decrease of €172.5 million the month before.

The annual rate of change with regard to total loans was -9.5% in May, slightly higher than April’s -9.3%. Total outstanding loans in May 2014 were €61 billion.
 The announcement comes on the back of a surprise return to international borrowing markets by the Cyprus government in mid-June, where it successfully raised €750 million to refinance existing short-term debt.


The move was widely interpreted as an indicator of increased investor confidence in the prospects of the Cyprus economy, which suffered a major hit in March 2013 after it was forced to close its second-largest bank and seize uninsured deposits to recapitalise the Bank of Cyprus – the island’s largest lender in exchange for a €10 billion bailout loan by the EU and the International Monetary Fund.


Recently, local banks have variously been urged strongly by the government and the CBC governor to follow suit and seek new capital from international markets in order to boost their capacity to withstand further shocks and ensure success in the upcoming stress tests by the European Central Bank – due to be announced in October.

Source: Cyprus Mail