2020 Cyprus Country Report

More documents

Info

Banking Sector Profile Bolstering THE BANKS A strong focus on going digital, implementing more innovative banking solutions and integrated products are supporting the industry and enhancing competitiveness, as well as bringing fresh opportunities to support sustainable development in a post- Covid era of stiff competition and increasing costs. The Cyprus banking sector has taken big strides in correcting fundamental weaknesses in the financial system, cleaning up balance sheets, successfully raising private capital and maintaining strong capital positions over the last few years. Until the end of 2019, and before the coronavirus outbreak, banks were showing strong performance with decreasing non-performing debt and an increase in deposits, a total of €3 billion in fresh loans provided during the last year, as well as continuous credit rating upgrades boosting market and investor confidence in Cyprus. Technological advancements, new market demands and growing funding needs of both households and businesses have been driving developments in the banking industry, and the sector is focused on introducing services to com- KEY contacts The Central Bank of Cyprus www.centralbank.cy The Association of Cyprus Banks (ACB) www.acb.com.cy 56 Country Report CYPRUS 2020
Although key indicators are under pressure at the moment due to the pandemic, Cyprus banks had strong performance in 2019, are stable and well capitalised, and the sector has shown overall improvement during the last years. Banks are now focusing on providing the widest possible support to the economy to minimise the pandemic impact and to safeguard the banking sector’s performance in the years ahead. Michael Kammas Director General Association of Cyprus Banks (ACB) 30+ BANKS panies, start-ups and ventures with high growth potential. At the same time banks have been instrumental in expanding lending to key sectors such as shipping, tourism, real estate and professional services – which are significant economic drivers for Cyprus. The reforms and increased European supervision have already produced more agile and future-proof banks – and with the industry embracing digital innovation the sector is bolstering its adaptability and competitiveness. If Cyprus continues to display the same level of resilience it has shown over the last five years and continues to efficiently restructure its institutions, it will be well-equipped to overcome the challenges and emerge stronger as a true international financial centre. COVID SLOWING MOMENTUM Supported by the healthy growth of the Cyprus economy over the last few years, the banking sector was showing positive results in 2019. However, the outbreak of the global coronavirus pandemic struck a severe blow to the momentum achieved. With growth-driving economic sectors heavily affected by the ramifications of Covid-19, the Cyprus banking sector implemented extraordinary measures during the first months of the pandemic to minimise the impact on households and corporations. Key measures included a loan repayments suspension until the end of 2020 and the postponement of foreclosures for a period of almost six months to support the economy, society and bank clients. In these unpredictable times, Cyprus banks have been working hard to evaluate the circumstances in an effort to clarify the real picture of the economy in real time. The situation is very challenging but manageable, according to the Central Bank of Cyprus, who has stated that apart from the low-interest rates debilitating eurozone banks’ profitability, Cypriot banks face the additional challenge of the still high level of non-performing loans (NPLs). Going forward, it will be absolutely crucial for banks to keep cleaning up their balance sheets and focus on tackling non-performing debt to safeguard the sector’s performance in the years ahead. STRONG FOUNDATIONS TO OVERCOME CHALLENGES Although the pandemic is currently shaking up the world economy and putting pressure on banks, Cyprus has shown improvement in the sector. Local banks are stable and have reorganised, developed capital strength and invested in corporate governance – establishing strong foundations to move toward a more sustainable future. According to 2019 Q4 key aggregate financial indicators released by the Central Bank of Cyprus (CBC) the Core Tier 1 Capital of Cyprus banks amounted to 17% at the end of 2019, compared to 15.1% at the end of 2018. This is the highest level of CET1 capital in the CBC’s time series since December 2010. Deposits in the banking sector of Cyprus were up to €47.9 billion in August 2020, an amount which equals less than 250% of the local GDP, while total loans stood at €31.8 billion. In addition, progress has been made in reducing the NPL ratio, which is now less than 30% in comparison with more than 50% some years ago. This was achieved through loan restructurings, sale of loans, debt-to-asset swaps and foreclosures. Another key part of NPL reduction has been through specialised units taking over NPL management and new international players buying up distressed asset portfolios from local banks. All core banks in Cyprus have passed successive and rigorous European Central Bank (ECB) stress tests and reforms in the country’s legal and judicial framework have given banks more avenues to reduce the burden of problematic assets and economic imbalances, a legacy of the 2013 financial crisis. Significant initiatives include a new state programme – Estia – for supporting the most vulnerable borrowers, a major set of laws passed in 2018 substantially strengthening the legal framework and allowing for the securitisation of loans and speeding up loan recovery rates – developments that were welcomed by credit rating agencies. However, even before these laws, the drop in NPLs in Cyprus was proportionately the fastest in the EU. Challenges do remain and banks will need to tread carefully and adopt a more proactive – rather than reactive – approach in order to stay on track and maintain competitiveness. With global uncertainty due to the pandemic, fluctuations in international markets, and external risks such as trade wars and changes in monetary policy, the banking sector must make provisions to ensure it has the ability to respond to any new potential crises. KEY PLAYERS Key players in the Cyprus banking landscape are Bank of Cyprus, Hellenic Bank and RCB Bank which are under the direct supervision of the ECB, with the rest of the market made up of smaller banks and foreign subsidiaries such as AstroBank, Eurobank and Alpha Bank. The island’s largest lender is the Bank of Cyprus (BoC) with a market share of 41.7% as Sector Profile Country Report CYPRUS 2020 57
Page 1:
CountryProfiler Global Edition 2020
Page 4 and 5:
DESTINATION DEVELOPMENTS BY CYBARCO
Page 6 and 7:
Publisher’s Information CountryPr
Page 8 and 9: Contents Contents 10 12 16 18 26 32
Page 10: Contents Sector Profiles 50 AGRICUL
Page 13 and 14: Foreword Without any doubt, the Cov
Page 15 and 16: 35ºN 33ºE Publisher’s Cyprus at
Page 17 and 18: Fast is too slow. Is the rapid pace
Page 19 and 20: Government Structure President of t
Page 21 and 22: Economy GROWTH ON THE ORIZON Follow
Page 23 and 24: Economy Real GDP Growth Source: Eur
Page 25 and 26: Harmonised Consumer price inflation
Page 27 and 28: Foreign Direct Investment (FDI) FDI
Page 29 and 30: operations, the island is sharpenin
Page 31 and 32: A GROWING ENERGY SECTOR Since US co
Page 33 and 34: The sectors that have seen the most
Page 35 and 36: Melco International Country of Orig
Page 37 and 38: Headquartering Cyprus’ entry into
Page 40 and 41: Headquartering CONNECTING WITH THE
Page 42 and 43: HQ Insights WHY DID YOU CHOOSE CYPR
Page 44 and 45: Interview Natasa Pilides Minister o
Page 46: Interview Interconnectors. The Mini
Page 49 and 50: Total Exports €3.15 billion Domes
Page 51 and 52: Sector Profiles Education Energy: O
Page 53 and 54: Over 50% of agricultural exports go
Page 55 and 56: u Cyprus cannot compete with countr
Page 57: TASTE OF CYPRUS Ministry of Energy,
Page 61 and 62: CyprusProfile EVERYTHING YOU NEED &
Page 63 and 64: The unfolding of Covid-19 into a gl
Page 65 and 66: and bonds, which operate under the
Page 67 and 68: CSE’s goal for 2020 is to be reco
Page 69 and 70: In this last year the Ministry of I
Page 71 and 72: A development by
Page 74 and 75: Construction & Real Estate Sector P
Page 76 and 77: Education Sector Profile EDUCATING
Page 78 and 79: Education Sector Profile Both UCY a
Page 80 and 81: Education Sector Profile Cyprus’
Page 82 and 83: Energy: Oil & Gas Sector Profile Ro
Page 84: Energy: Oil & Gas Sector Profile me
Page 87 and 88: Renewables have the potential to cr
Page 89 and 90: To decrease dependence on heavy fue
Page 91 and 92: The multiplier effect to the local
Page 93 and 94: BENEFITS: Diverse landscapes never
Page 95 and 96: Having managed to bring to Cyprus
Page 97 and 98: Cyprus ranks 24th (out of 195 count
Page 100 and 101: Insurance Sector Profile MITIGATING
Page 102 and 103: Insurance Sector Profile fintech co
Page 104 and 105: International Financial Services Se
Page 106 and 107: International Financial Services Se
Page 108:
International Financial Services Se
Page 111 and 112:
Cyprus funds have been a platform f
Page 113 and 114:
Competitive Tax Regime for Fund Man
Page 115 and 116:
A NEW VISION The backbone of the ne
Page 117 and 118:
The economy of Cyprus is expected t
Page 119 and 120:
GROWING APPEAL Cyprus has proven it
Page 121 and 122:
2020 has been a challenging year fo
Page 124 and 125:
Research & Development Sector Profi
Page 126 and 127:
Page 128:
Page 131 and 132:
Cyprus is ready to boost investment
Page 133 and 134:
Also the country’s investment pro
Page 135 and 136:
Telecom operators are being faced w
Page 137 and 138:
OPERATING 24/7, 365 DAYS AT LARNAKA
Page 139 and 140:
KEY players Deputy Ministry of Tour
Page 141 and 142:
Sector Profile 2020 has taken an un
Page 143 and 144:
We are currently experiencing a dis
Page 145 and 146:
“Investing in sustainable tourism
Page 147 and 148:
Sector Profile Following the Covid-
Page 149 and 150:
The unprecedented coronavirus pande
Page 152 and 153:
Business Operating Environment BUSI
Page 154 and 155:
Business Operating Environment Cypr
Page 156 and 157:
Business Operating Environment Lega
Page 158 and 159:
Business Operating Environment Key
Page 160 and 161:
Travel & Living CountryProfiler Ess
Page 162 and 163:
Travel & Living SHOPPING In Cyprus
Page 164 and 165:
Travel & Living PUBLIC TRANSPORT Wi
Page 166 and 167:
Travel & Living COMMUNICATIONS Cypr
Page 168 and 169:
Travel & Living Key Tourist Areas i
Page 170 and 171:
Who’s Who - Cyprus Business Direc
Page 172 and 173:
Page 174 and 175:
Page 176 and 177:
Page 178 and 179:
Page 180 and 181:
Page 182 and 183:
Page 184 and 185:
Page 186:
show all

2020 Cyprus Country Report

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?