Cyprus banks foresee a continued rise in demand for new loans both by households and companies in the coming months, according to the Bank Lending Survey complied by the Central Bank of Cyprus for the second quarter of 2018.
According to the expectations of banks in Cyprus and in the euro area for the third quarter of 2018, net demand for new loans is expected to increase further in all loan categories.
“The expectations for further increase in the net demand for loans from the domestic non-financial private sector shows positive sings for the continuation of increased economic activity for the next quarter as well,” the CBC said.
The survey shows that net loan demand both in Cyprus and in the other euro area member-states both from households and corporations continued to register growth in the second quarter of 2018.
This development, the CBC said, was mainly attributed to the continued increase of economic activity, the slender rise in wages, the continuation of demand in new lending and the historically low domestic lending rates.
Furthermore, the loan origination criteria in Cyprus both for corporations and households remained unchanged in Q2 compared with the previous quarter. In the other euro area member-states the loan origination criteria were relaxed.
The Cypriot banks expect the criteria for all loan categories will remain unchanged in the next quarter, while loan origination criteria in the other euro area member-states will be relaxed further.