Cyprus Mail 11 December 2024 - by Eleftheria Paizanou
At €2.38 billion. Bank profits in Cyprus rose from 2022 to 2024, during which time the European Central Bank (ECB) raised interest rates in succession to curb inflation, which at the time had hit red.
The significant profits recorded by the banks during this period led AKEL to submit the proposal for a law, which will impose an extraordinary solidarity fee of 5% on banks for the tax years 2024 and 2025 to address the extraordinary conditions created due to the rise in inflation and the increase in interest rates.
The proceeds from this tax – if approved by Parliament – will amount to €100 million (€50 million in 2024 and €50 million in 2025), which will end up in state coffers to be used for social purposes, such as subsidizing housing loans and interest subsidy, etc.
Tomorrow the draft law will be submitted for approval, however, it still does not seem to acquire the required majority, as so far it is supported by the MPs of AKEL, EDEK and Ecologists. DISY is expected to vote against it, while in DIKO not all MPs may adhere to the same position. ELAM and DIPA will be placed in the Plenary.
Losses of €13.6 billion in times of crisis
Profit of €2.38 billion recorded by the banks are included in data of the Central Bank (CB) that were forwarded to Parliament, on the occasion of the discussion of this bill.
In detail, profits of €171.4 million were recorded in 2022, while in December 2023 profitability amounted to €1.26 billion. and this year until September €952.8 million. For 2022, interest rate hikes began in July and therefore there was no time to record higher gains. In 2023, where one interest rate increase followed another, profitability had reached its highest level and this year it is expected to move to also high levels.
Central Bank data include the profitability of the banking system and the market share held by each banking institution. Specifically, from 2001 to September 2024, banks recorded profits of €8.05 billion for 13 years. For eleven years (within the period 2001-2024) they recorded losses of €15.6 billion.
From the analysis of CB data, it appears that the highest profitability was recorded in 2023 (€1.26 billion), followed in 2007 (€1.32 billion), 2008 (€1.09 billion) and this year (the first nine months) profits were €952.5 million.
In terms of losses in the banking system, the most severe were recorded in the period 2011-2013 (a total of €13.6 billion), when the country joined the Memorandum of Fiscal Consolidation.
Market share per bank
According to CB data, by the end of September 2024 the market share per banking system was as follows:
– Bank of Cyprus had deposits amounting to €20.8 billion. (39.21% of the total) and loans of €10.4 billion. (42.99% of the total).
Hellenic Bank had deposits of €14.9 billion. (28.07%) and loans of €6 billion. (24,59%).
Eurobank Cyprus had deposits of €7.5 billion. (14.20%) and loans of €2.9 billion. (12,11%).
Alpha Bank Cyprus had deposits of €3.1 billion. (5.95%) and loans of €1.1 billion. (4,55%).
– Astrobank's deposits were €2.2 billion. (4.15%) and loans of €860 million (3,52%)
– Deposits at the National Bank of Greece Cyprus amounted to €511 million. (0.96%) and loans of €759 million. (3,10%).
– Deposits with the Housing Finance Agency amounted to €803 million. (1.51%) and deposits of €650m. (2,66%).
– Deposits at Ancoria Bank amounted to €757 million. (1.42%) and loans of €317 million. (1,30%).
– Societe Generale Cyprus deposits amounted to €561 million. (1.05%) and loans of €261 million. (1,07%).
– Deposits in the Cyprus Development Bank amounted to €526 million. (0.99%) and loans of €213 million. (0,87%).
– In third country bank branches, deposits amounted to €1.32 billion. (2.49%) and loans of €787 million. (3,23%).
