It seems that the time of insecurity following the 2013 haircut on deposits in Cyprus is over and cash that was for long in ‘hiding’ is now going back to the banks. The stabilisation and recovery of the economy is probably a contributing factor behind the decision by customers to take their money back to banks.
Based on Central Bank of Cyprus recent data, household deposits by end of April stood at €28.16 billion, marking a rise of €48.8 million within a month and €75 million within a year.
The data also shows that the savings capability of Cypriot households has improved significantly since 2016 since deposits rose by almost €800 million. In 2012, Cypriot deposits stood at €35.73 billion which was the highest amount ever recorded since the provision of official data. At the end of 2013 – that is after the haircut – deposits dropped to €27.79 billion. Today, six years later, deposits have risen by €628 million.
However, business deposits are at a slower pace considering that by end of April they recorded an increase of €170.6 million in one month and a €90 million decrease since the beginning of the year.
As for 2012, which was one of the best years for deposits from Cypriot companies, these amounted to €22.11 billion. After the March 2013 haircut, these dropped to €15.28 billion. And by the end of 2013 deposits from businesses stood at €11.45 billion. Six years later, they are down by €395 million.
Savings and pension funds have also recorded losses. In 2012, deposits of insurance companies stood at €4.41 billion. However, after the haircut and consequent redeeming of contracts, the picture began to change. At the end of 2013, the deposit balance dropped to €2.24 billion and from then on it took a steady decline. In April 2019, deposits stood at €1.72 billion. The majority of deposits are in euro.