Banking

Interest rates for some 400,000 housing loans concluded with a floating rate and whose installments had frozen at the levels of May 2023, when the European Central Bank's interest rate was at 3.5% and the 3-month Euribor at 3%, are now free to decline.

The Bank of Greece reported on Wednesday a significant narrowing of the spread between loan and deposit interest rates in October, following a faster decline in rates on loans than on deposits. 

The average interest rate on all loans fell by 19 basis points to 5.41%, with the largest decreases observed in business loans, which are also an area of competition between banks.

The daily transaction limit via the IRIS interbank payment system will increase next year to 1,000 euros, from €500 today.

This is donevia a limit of up to €500 per day for the amount that an individual can send money to another natural person (person to person, P2P) and another €500 for the payment of services by a freelancer (person to business, P2B).

National Bank of Greece posted after-tax profits of 983 million euros in the first nine months of the year, the lender announced on Thursday, recording a 15% increase year-on-year.

This is the result of the resilience of its net revenues from interest and the strong takings from commissions, the bank argued.

The board chairman of the National Bank of Greece and the Hellenic Bank Association, Gkikas Hardouvelis, stated on Monday the capital adequacy ratios of Greek banks are strong and very close to the corresponding European average, while the liquidity ratios far exceed the minimum requirements and the European average.

Banks in Cyprus raised the interest rates on home loans in August, while reducing the interest rates offered on household deposits, according to data released by the Central Bank of Cyprus on Wednesday. At the same time, the amount of new loans issued in August saw a sharp decline, dropping by nearly a third compared to July.

The de-escalation of lending rates, but also of interest rates on deposits by commercial banks, is expected to be slow, as banks await the next moves by the European Central Bank to determine their pricing policy.

Cypriot banks are maintaining a low profile, but 2024 will likely bring higher profits than the record-breaking figures of 2023.

Interest rates for deposits by households and corporations in Cyprus converged and matched in March, from having a spread of 55 basis points in February, according to data released by the Central Bank of Cyprus.

The interest rate spread between new deposits and loans widened to 5.71 percentage points in March, according to Bank of Greece data.

The weighted average interest rate on new deposits remained unchanged at 0.53%, while the corresponding interest rate on new loans increased by 47 basis points to 6.24%.