Pure new credit (loans excluding renegotiated credit facilities) rose by an annual 1.26% in the first six months of 2023, with continued rate hikes by the European Central Bank affecting housing loans which marked an annual reduction of almost 30%, data published by the Central Bank of Cyprus (CBC) show. However, pure new credit provided by the Cypriot banks dropped significantly in June to pound 240 million from pound 546 million the month before. The large amount granted in May was driven by a steep rise in new corporate loans over pound 1 million which amounted to pound 351 million. June Lending --------- In June new lending for house purchase registered the lion's share of total pure new credit with pound 84.4 million, down from pound 104.7 million the month before. Loans to non-financial corporations over pound 1 million, which traditionally attract the highest share of new loans, dropped significantly to pound 61.2 million in June from pound 351 million in May. This steep drop is believed to be associated with a backlog of lending demand in the Easter holidays in April, which pushed the processing of new loans applications in May. Pure new loans to NFCs up to pound 1 million in June amounted to pound 42.6 million compared with pound 48.6 million in May, while other new lending rose to pound 30.1 million from pound 9.6 million in May. According to the CBC, new consumer credit remained broadly unchanged in June amounting to pound 21.5 million from pound 22.7 million in the month before. As far as the data for the first half are concerned, the continued interest rate hikes by the ECB since last July, coupled with rising construction cost have adversely affected new credit for house purchase, which dropped by 29.1% year on year to pound 491 million. New corporate credit over pound 1 million in the first half of 2023 rose by 30.6% amounting to pound 818.7 million compared with pound 626.1 million in the respective period of last year, while loans to corporate up to pound 1 million dropped by an annual 6.8%, amounting to pound 256 million in January - June 2023, from pound 274.6 million in the corresponding period of 2022. According to the CBC, consumer credit in the first half of 2023 rose by 23% year on year with new loans reaching pound 108 million compared with pound 77.8 million in the respective period of last year. Other pure new lending rose by an annual 51.3% in the first half of 2023, reaching pound 61.3 million from pound 40.5 million in the first half of 2022, the CBC added.
Source: Cyprus News Agency