Moreover, according to the survey, banks estimate that the criteria for the allocation of loans are expected to remain unchanged during the first quarter of 2017 as in the Eurozone. However, criteria for the allocation of loans for house purchase in the Eurozone are expected to ease. 

The survey is based on a questionnaire about the Cypriot banks and covers approximately 85% of the lending market in Cyprus.

According to the survey, the net demand for loans increased during the last quarter of 2016, on the basis of the banks` expectations during the previous quarter, even though at lower levels.

The main reasons for this increase was the reduction in interest rates, the need to increase the movement of stocks and capitals and the need for corporate and debt restructuring.

Banks in Cyprus expect a rise in loans for house purchase during the first quarter of 2017.

During the last quarter of 2016, the net demand for loans for house purchase increased and exceeded the banks` expectations during the previous quarter.

The factors that contributed to this increase were the rise in consumers` confidence, a drop in interest rates and the need for debt restructuring and renegotiating.

The banks also expect that demand for consumption loans will rise further, as it did during the last quarter of 2016.

The factors that contributed to the net increase in the demand were lower interest rates, rising costs for purchasing consumer goods and increased consumer confidence.

Source: Famagusta Gazette