New record for Cyprus Bank’s liquidity coverage ratio

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Cyprus Bank’s liquidity coverage ratio in Q3 2019 stood at 331.02 percent Cypriot banks ‘ liquidity reached € 15 billion at the end of 2019, as indicated by the latest Central Bank results, creating big headaches for the bankers.

According to the latest Central Bank of Cyprus statistics, the system’s deposits in December 2019 surpassed its loans by € 15.1 billion, staying at the highest level since at least 2008, available data.


The system’s high liquidity is also illustrated by the components of the single supervisory process, as Cyprus has the eurozone’s second highest liquidity coverage ratio.
The Cyprus banking system’s liquidity coverage ratio in the third quarter of 2019 was 331.02 percent higher than the euro area average of 145.16 percent and more than twice the 100 percent limit set by the Basel III Directive. Banks ‘ picture has changed dramatically since 2013, when loans exceeded deposits by € 17 billion.


In this climate, banks intensify their efforts to find new customers to channel some of their liquidity while also considering investing some of their assets. Their love.


Simultaneously, banks charge negative interest rates to offset the costs generated by the ECB’s debt-retention tax.
For the moment, paying large deposits does not seem to alter the system data as all banks are starting to follow the two big banks.


Bank of Cyprus has placed negative interest rates of 0.5 percent since March on large deposits excluding educational and charitable institutions, while Hellenic Bank has imposed negative interest rates of 0.6 percent on large deposits above € 100,000 since March, as pointed out by Hellenic Bank Chief Executive Ioannis Matsis, exploiting part of its excess liquidity.