InsiderEconomyBank of Cyprus rises loan instalments as from March 15

Bank of Cyprus rises loan instalments as from March 15

Thousands of Bank of Cyprus clients have been informed via sms and the electronic 1bank website they will have a slight rise in their loan instalments as from March 15.

And this because of the lender’s methodology for calculating its base rates which also includes the cost of wholesale funding, according to Philenews.

In their electronic note, Bank of Cyprus informs the following:

“With effect as from 15/03/2023 the Bank’s base rate calculation methodology will include the cost of wholesale funding.

“Specifically, with effect from the above date, the Bank will include the cost of issuing the Senior Preferred Bond issued in June 2021 in the calculation of the Bank’s Base Rate”.

If necessary, it is at the bank’s discretion to include the cost of new future wholesale funding from the money markets (wholesale funding) in the bank’s base rate calculation methodology at any time.

All credit facilities linked to the bank’s base rates are affected by the inclusion of money market funding costs. Credit facilities linked to Euribor and the ECB MRO are not affected by the inclusion of money market funding costs in the Bank of Cyprus’ base rates.

According to the example provided to its clients by the Bank of Cyprus on the Bank’s base rate: For a loan amount of €100,000 with a number of instalments being 120, the amount of the instalment is €980 (excluding money market funding costs).

The base rate according to the example is 2.31% plus the 1% surcharge with the total interest rate being 3.31%.

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