Profits in Cyprus’ banking sector fell to €1 billion in 2025, marking an annual decrease of €165 million or 13.9%, according to data released on Tuesday by the Central Bank of Cyprus. The decline from €1.2 billion in 2024 is primarily attributed to a reduction in net interest income (NII).
Sector performance
The Central Bank published updated aggregate data for the banking sector, covering profitability, balance sheet developments and capital adequacy, with a reference date of 31 December 2025.
Despite the drop in profits, total assets increased by €4.4 billion, or 6.6%, reaching €70 billion in 2025 compared to €65.6 billion in December 2024. This growth was mainly driven by an increase in loans and advances, as well as debt securities.
Capital strength improves
The sector’s Common Equity Tier 1 (CET1) ratio rose by 1.1 percentage points to 25.8% at the end of 2025, up from 24.7% a year earlier. The improvement is largely attributed to an increase in CET1 capital and a reduction in total risk exposure. The figures point to a banking sector that remains well-capitalised, despite pressures on profitability linked to declining interest income.
