Insider Economy Household deposits in Cyprus remain stable  

Household deposits in Cyprus remain stable  

An apparent growth of Cyprus’ economy seems to have no corresponding impact on disposable income of households turned into bank deposits.

In fact, businesses are the ones putting money in banks despite the fact that large deposits are flirting with zero interest rates these days, according to latest Central Bank of Cyprus data.

This shows that household deposits stood at € 23.48 billion by end of September, thus, remaining stable since the beginning of the year.

And since the 2013 haircut on deposits which resulted in a balance of €23.26 billion, inflow of new deposits by households into the banking system remains quite anaemic.

Seven years after the devastating haircut, fresh money from households into banks amount to just €223 million with many fluctuations during this time span.

In fact, it looks like it will take many years for households to reach the 2012 high level of deposits in banks. Specifically, these stood at € 26.39 billion by end of December 2012 – that is € 2.9 billion higher than the ones today.

On the other hand, deposits of businesses based in Cyprus seem to have overcome the 2013 haircut shock since figures reflect a different state of play.

Specifically, deposits stood at €9.48 billion by end of September compared to € 5.67 billion in 2013. This means that businesses invested € 3.8 billion of fresh money in banks within a period of seven years. In 2012, deposits stood at € 9.58 billion, that is € 101 higher than today.

Moreover, deposits of insurance companies and pension funds also marked an increase since the beginning of the year but still have a long way to go to reach the levels of 2012 and 2013.

Deposits stood at € 1.73 billion by end of September compared to €1.68 billion at the end of December 2018, which means an increase of €50 million.  And compared to 2012’s €4.29 billion, the difference is €2.56 billion.


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