Reducing public debt below the 60% threshold by the end of 2025 is his personal goal, Finance Minister Makis Keravnos said on Thursday. He added that the Cypriot economy recorded the highest growth rates in the Eurozone “thanks to responsible fiscal policies”.
At the same time, in his address at the Annual General Meeting of the Association of Cyprus Banks in Nicosia, Keravnos stressed that the Cypriot banking system “has returned to a healthy trajectory and now constitutes a reliable and stable pillar, ready to support the country's growth efforts.”
In his speech, Keravnos said that “overall economic progress, fiscal discipline, and the strengthening of our country’s international credibility are also creating the right environment to attract new foreign investments, which are emerging as one of the strongest driving forces of our economy.”
Citing projections, the Minister stated that public debt as a percentage of GDP is expected to fall below the 60% threshold by 2026, “further enhancing the credibility and solvency of our country.”
He noted that the recent decision by the European Commission to remove Cyprus from the category of countries with “macroeconomic imbalances” is a clear recognition of the efforts and success of this policy.
Regarding financial stability, Keravnos said it is “of crucial importance for maintaining a stable development-oriented economic policy,” and the role of the banking system is undoubtedly vital.
The Finance Minister expressed satisfaction that the state of the Cypriot banking system “remains strong and resilient, having successfully faced significant challenges in recent years and undergone a major transformation.”
He noted that the Cypriot banking system has returned to a healthy trajectory and now constitutes a reliable and stable pillar, ready to support the country’s development efforts. However, he added that “the challenges facing the banking sector are considerable and require continuous adaptation, innovation, and investment”.
He stated that “we expect banks to intensify financing for Small and Medium-sized Enterprises, green projects, and innovative initiatives, while also ensuring the quality of their loan portfolios.”
Keravnos also noted that banks should show greater flexibility in financing terms, offering more competitive interest rates to improve access to capital for both businesses and households.
Earnings of over €1 billion for the Cypriot banking sector for a second consecutive year, ongoing merger processes between major banks, and indications of Deutsche Bank’s return to Cyprus were among the key points raised by the President of the Association of Cyprus Banks, Aristides Vourakis, in his address. He highlighted the sector's steady recovery and the ongoing challenges from the 2013 crisis.
In his speech, Vourakis noted that the Cypriot banking sector closely followed European trends and also recorded profitability for a second consecutive year. The sector's consolidated profits once again exceeded €1 billion. The core capital adequacy ratio (Core Tier 1) reached 24.5%, comparing favorably to the European average of 16%.
He also pointed out that the non-performing loan (NPL) ratio decreased to 6.2%, though it remains above European levels. However, he reminded the audience of the unique crisis Cyprus faced in 2013.
The resilience and dynamism of the Cypriot banking sector—despite the volatile and changing global environment—were also highlighted in the speech of the General Director of the Association of Cyprus Banks, Michalis Kammas. He stressed the accelerating digital transformation, compliance with new European standards, and the undertaking of strategic initiatives for sustainable development.
In a farewell message, after two decades at the helm of the Association, he reflected on the sector’s positive course, focused not only on financial stability but also on societal support.
CNA/KST/THN/MCH/EPH/2025
ENDS, CYPRUS NEWS AGENCY
