Cyprus Business Now: weekly wrap-up

Here are the top business stories in Cyprus from the week starting November 2:President Nikos Christodoulides on Monday urged closer cooperation between the government and the private sector to attract productive investment, accelerate major developments and address challenges including housing affordability, as he addressed the annual general meeting of the Association of Large Investment Projects in Nicosia. Christodoulides said major developments played a decisive role in attracting capital, bringing in expertise, creating business opportunities and strengthening Cyprus’ international competitiveness. “Large developments, through attracting capital, making use of expertise and mobilising a wide range of professional activities, contribute decisively to economic diversification, upgrading the country’s productive model and strengthening our international competitiveness,” he said. He described the attraction of quality and productive investment as a strategic government priority, adding that efforts were under way to safeguard economic stability, improve the business environment and promote reforms intended to strengthen investor confidence. “We are working to create the necessary framework so that attracting quality investment becomes an achievable goal,” Christodoulides said. Only 1.8 per cent of two- and three-bedroom apartments advertised for sale in Limassol are priced within the estimated €256,000 budget of a hypothetical average-income household, according to a new study by real estate analytics firm Ask Wire. The analysis, based on residential property listings across the government-controlled areas of Cyprus, highlights wide differences in housing affordability between districts, with Nicosia offering the greatest overall choice of apartments within the study’s assumed budget. The research compares asking prices advertised on online marketplace Bazaraki in early October with household purchasing power calculated using median salary data from the Cyprus Statistical Service. Ask Wire examined 25,550 active property listings after carrying out data validation checks, of which 17,532 were for two- or three-bedroom homes. The study identifies two main obstacles to homeownership, namely the ability to raise the initial deposit required for a mortgage and the capacity to meet monthly repayments. Cyprus’ shipping fleet has expanded by around 27 per cent since September 2023, with 119 new vessels joining the national register since the beginning of 2026, Shipping Deputy Minister Marina Hadjimanolis said on Monday, as she presented the ministry’s 2027 budget to parliament. The budget was presented before the House finance committee, outlining the ministry’s strategic objectives and priorities for the coming year. The surplus budget reflects the government’s commitment to strengthening the country’s shipping sector, developing its maritime ecosystem and maintaining Cyprus’ competitiveness as an international shipping centre, the ministry said. “The steady upward course of the Cyprus Ship Registry over the past three years confirms that Cyprus remains a reliable and competitive shipping destination,” Hadjimanolis said. “Specifically, from September 2023 until today, the capacity of the fleet under the Cypriot flag has increased by approximately 27 per cent, reflecting the confidence of the international shipping community in our country,” she added. Financial institutions in Cyprus face growing risks from prolonged cyberattacks, after a distributed denial-of-service (DDoS) attack targeting a bank lasted 200 hours in the third quarter of 2026, according to cybersecurity company Qrator Labs, highlighting the importance of keeping critical digital services operational during sustained disruptions. The attack lasted more than 8 days, making it significantly longer than any incident recorded by the company during 2025 and more than 2.5 times the duration of the longest attack observed in the previous quarter. Qrator Labs’ latest global report found that financial technology (fintech) remained the most targeted sector, accounting for 31.3 per cent of all recorded DDoS attacks during the third quarter. E-commerce followed with 19 per cent of attacks, while information and communication technology accounted for 18.2 per cent, meaning the 3 sectors together represented more than two-thirds of the incidents observed. The findings are particularly relevant to Cyprus, which has established itself as a hub for online trading, brokerage and financial services, with firms increasingly expected to demonstrate that their systems can withstand serious cyber incidents and recover effectively. The report comes amid growing regulatory attention to operational resilience and compliance with the European Union’s Digital Operational Resilience Act (DORA), which sets requirements for financial firms to manage information and communication technology risks. Cyprus households held €62.57 billion in financial assets at the end of 2025, with more than half of their holdings kept in cash and bank deposits, while outstanding household loans approached €20 billion, according to figures released by the Cyprus Statistical Service (Cystat) on Monday. The figures showed that household financial assets totalled €62.57bn at the end of December 2025, of which 53.8 per cent consisted of currency and deposits, indicating that bank savings and cash remained the largest component of household financial holdings. Equities accounted for a further 25 per cent of household financial assets, while debt securities represented 2.6 per cent and loans 0.8 per cent. Meanwhile, household loans reached €19.89bn at the end of December 2025, equivalent to a debt-to-gross domestic product ratio of 51.9 per cent. Cyprus recorded a €1.61 billion general government surplus in the first nine months of 2026, an increase of €442.1 million compared with the same period last year, according to preliminary figures released on Tuesday by the statistical service (Cystat). The surplus reached 4 per cent of GDP between January and September 2026, compared with €1.17bn, representing 3 per cent of GDP, during the corresponding period of 2025. The improvement came as government revenue increased considerably faster than expenditure, supported mainly by higher receipts from income taxes, social contributions and VAT. Total government revenue rose by €737.9m to €12.09bn, marking a 6.5 per cent increase from €11.35bn in the first nine months of 2025. Five wedding planners from Poland are visiting Paphos between November 2-5, as part of an initiative aimed at promoting the district as a leading wedding and honeymoon destination in the Mediterranean. The four-day familiarisation trip, organised by the Paphos regional tourism board (Etap Paphos), forms part of ongoing efforts to strengthen the district’s appeal to couples seeking locations for wedding ceremonies and honeymoon holidays. According to Etap Paphos, the visit is designed to give professionals from the Polish market first-hand experience of the facilities, services and distinctive venues available across the district. During their stay, the five wedding planners will visit hotel resorts and meet municipal officials responsible for conducting civil wedding ceremonies. Their programme will also include visits to traditional venues, other wedding locations and historical monuments, showcasing the range of settings available for couples planning ceremonies in the area. Cyprus residents continue to receive some of the lowest interest rates on their savings in the eurozone, while businesses and households taking out loans face borrowing costs broadly in line with European averages, according to figures published by the Central Bank of Cyprus (CBC) on Tuesday. The CBC’s latest analysis of monetary and financial statistics highlights a persistent imbalance in how banks pass on changes in interest rates to depositors and borrowers, with deposit rates in Cyprus among the lowest in the eurozone and the transmission of interest rate increases and decreases to savings accounts remaining weaker than in almost all other member states. The findings come despite some improvement in deposit returns in September, when banks increased the average interest rate on new household deposits with an agreed maturity of up to one year to 1.62 per cent, from 1.35 per cent in August. For non-financial corporations, the corresponding rate increased to 1.70 per cent, compared with 1.56 per cent the previous month. The Central Bank of Cyprus (CBC) has introduced a 1 per cent systemic risk buffer for all authorised credit institutions in Cyprus, effective from December 31, 2026, in a move aimed at strengthening the banking sector’s resilience against structural vulnerabilities and potential financial shocks. The decision was taken under the Macroprudential Oversight of Institutions Law of 2015, as amended, with the CBC acting as the designated authority responsible for implementing macroprudential measures. The buffer will apply to all exposures across all authorised credit institutions operating in the Republic of Cyprus, rather than being limited to specific banks or categories of lending. The CBC said it had identified several structural vulnerabilities within the Cypriot banking system which could contribute to the build-up of systemic risks and threaten financial stability. Eurobank and Alpha Bank could have further room for share-price gains following their third-quarter results, with Swiss investment bank UBS maintaining buy recommendations on both lenders while highlighting their growing operations in Cyprus and other international markets. In its latest report, the findings of which were shared by Greek news outlet Newmoney, UBS kept its price targets unchanged at €5.40 for Eurobank and €5.20 for Alpha Bank, implying potential upside of around 21 per cent and 18 per cent respectively, excluding dividends. The bank’s positive assessment is underpinned by stronger core banking income, expanding lending and a growing contribution from acquisitions, although it identifies different drivers for the two groups. Finance Minister Makis Keravnos on Wednesday said that the government would seek to extend reduced excise duty rates on motor fuels until March 2027, while defending rising value added tax (VAT) receipts as a consequence of stronger consumption rather than inflationary taxation. Speaking at the Presidential Palace after a cabinet meeting, Keravnos also defended the government’s fiscal policy following the announcement of a budget surplus, arguing that accumulated reserves and declining public debt were helping Cyprus withstand economic and geopolitical uncertainty. The reduction in excise duty on motor fuels, which is due to expire at the end of November, will be submitted to the cabinet for renewal, potentially until March 2027, he said. Keravnos was responding to questions about inflationary pressures, government revenues and whether further support measures were being considered for households and businesses. He expressed satisfaction with the latest fiscal figures, saying the economy’s resilience reflected the government’s approach to managing public finances. Cyprus’ tourism sector has proved more resilient than expected during the 2026 season, despite regional developments that created uncertainty in the market, Deputy Minister of Tourism Kostas Koumis said at the World Travel Market (WTM) in London, as early indications from the British market point to increased flight capacity for next year. Koumis said the sector had managed to significantly limit its losses following the uncertainty triggered by the events of March 1, with the decline in tourist arrivals compared with the previous year standing at 5.6 per cent. He estimated that the reduction would narrow further by the end of 2026, expressing confidence that the island had once again demonstrated the resilience of its tourism industry. “For another year, Cyprus’ tourism sector has succeeded,” Koumis said, adding that official statistics and specialist analyses both confirmed the sector’s ability to withstand difficult circumstances. Looking ahead to 2027, the deputy minister struck a cautiously optimistic tone, pointing to encouraging early signals from the British market following initial discussions with Cyprus’ strategic partners. The state’s support for Cyprus’ former cooperative banking sector is expected to cost taxpayers around €2 billion between 2014 and 2030, with the final bill depending heavily on how much of the outstanding assistance can be recovered, the Audit Office has warned. In a report examining the effectiveness of state-owned asset management company Kedipes in repaying state support provided to the former Cyprus cooperative bank, the Audit Office said the estimated cost includes the original recapitalisation, funds expected to remain unpaid and the cost of financing the state’s assistance. The estimate comprises the €1.67bn initial recapitalisation, less €175 million recovered, a further €340 million expected not to be repaid from the €3.54bn in state support, and an estimated €200 million in financing costs. The €340m figure reflects Kedipes’ estimate that 90 per cent of the state support will ultimately be repaid, leaving 10 per cent outstanding. Cyprus is expected to maintain a positive outlook for air connectivity in 2027 despite rising fuel costs and growing uncertainty in the aviation industry, Hermes Airports said on Wednesday, following discussions with more than 30 airlines at an international industry event. The airport operator said its airline partners had expressed intentions to strengthen their flight schedules and expand operations in Cyprus next year, despite mounting pressure on profitability and passenger demand. Hermes Airports took part in Routes World 2026, held in Frankfurt from October 21 to 23, where it conducted more than 30 meetings with airlines to discuss the Winter 2026-2027 season, as well as their plans for 2027 and beyond. The discussions highlighted several challenges facing the aviation sector, particularly rising fuel costs, which are affecting both travel demand and airlines’ financial performance. “Despite these challenges, Cyprus continues to maintain a positive outlook,” the company said, adding that its airline partners had indicated their intention to reinforce their presence in the market. Invest Cyprus celebrated its 20th anniversary this week, with an event attended by President Nikos Christodoulides, government officials and representatives of the political and business communities, highlighting its contribution to attracting foreign investment and strengthening Cyprus’ international business presence. The anniversary event, held at the Landmark Nicosia on Tuesday, brought together members of the government and House of Representatives, diplomatic corps representatives, investors, businesspeople and the organisation’s partners. The occasion provided an opportunity to review Invest Cyprus’ development since its establishment in 2006, while outlining its priorities for the coming years, particularly the attraction of quality investments and further strengthening the island’s position on the international investment map. In his address, Invest Cyprus chairman Evgenios Evgeniou described how the organisation had evolved from a body primarily responsible for promoting the country into a strategic partner of the state, playing a more substantial role in attracting and facilitating investment. “Twenty years ago, some people believed that a small country could claim a bigger place on the international investment map. And they were right,” Evgeniou said. Cyprus’ registered unemployment rose by 9.7 per cent year-on-year in October, driven mainly by information and communication, administrative and support services, and professional, scientific and technical activities, according to figures released on Wednesday by the statistical service (Cystat). The number of unemployed persons registered at district labour offices reached 7,790 at the end of October, compared with 7,099 in the same month last year, an increase of 691 people. Compared with September, however, the actual number fell from 8,366. The seasonally adjusted figure also declined slightly, falling to 10,711 from 10,741 in September. It nevertheless remained above the 9,731 recorded in October 2025. The seasonally adjusted total stood at 10,096 in January, 10,078 in February and 10,316 in March, before rising to 10,590 in April. The Bank of Cyprus on Thursday reported profit after tax of €383 million for the first nine months of 2026, up 9 per cent year-on-year, as strong lending and deposit growth, robust fee income and disciplined cost management supported profitability, prompting the lender to upgrade its full-year return on tangible equity (RoTE) guidance to the high teens. The bank, a leading player in Cyprus’ financial system, recorded a RoTE of 18.9 per cent for the January to September period, while its basic earnings per share increased by 9 per cent year-on-year to €0.88. “We continue to execute our strategy by delivering solid lending and deposit growth, whilst maintaining cost discipline and prudent underwriting standards,” Bank of Cyprus chief executive officer Panicos Nicolaou said. Nicolaou said the results reflected the bank’s continued strong financial and operational performance, supported by a solid capital base. “Overall, profit after tax reached €383m, up 9 per cent year-on-year, generating a RoTE of 18.9 per cent,” he said. The bank’s third-quarter profit after tax amounted to €131m, remaining broadly unchanged from the preceding quarter. Deputy Minister of Research, Innovation and Digital Policy Nicodemos Damianou has concluded two days of meetings at the Plug and Play Silicon Valley Winter Summit, seeking to strengthen Cyprus’ international innovation links and create new opportunities for local companies. Damianou on Thursday said the visit had focused on expanding connections between Cyprus’ innovation ecosystem and international networks, investors and markets, as the government steps up efforts to attract American investment. “Two very productive days at the Plug and Play Summit 2026 in Silicon Valley, focused on strengthening the international connections of our ecosystem and creating new opportunities for collaboration,” Damianou said. The summit forms part of Cyprus’ wider drive to promote itself as a regional technology and innovation hub and strengthen ties with the American business community. Alpha Bank on Thursday unveiled a new corporate identity intended to reflect its transformation and expansion in recent years, with the rebranding also signalling its ambition to strengthen its role as a financial partner to individuals and businesses in Cyprus and other markets. The new identity, launched under the central message “Defining a new together”, presents the bank as an international financial group seeking to combine its expanded capabilities and expertise to provide more comprehensive financial solutions. The group said the rebranding reflects a business that has already undergone substantial change, with a greater emphasis on understanding customers’ individual needs and supporting them throughout different stages of their financial lives. “We have grown in order to become more useful, and our success cannot be greater than the success of those we serve, our customers,” Alpha Bank group chief executive officer Vassilis Psaltis said. Jumbo recorded a 15 per cent increase in sales in Cyprus in October 2026, as the retail group reported its strongest monthly sales growth of the year across its operations, with overall revenues rising by approximately 13 per cent year-on-year. The Cyprus performance was also stronger than the group’s overall growth for the first ten months of the year, during which sales across its markets increased by approximately 6.7 per cent compared with the corresponding period in 2025. For the January to October period, sales in Cyprus grew by approximately 8 per cent, according to the group’s latest trading update. Jumbo said it had chosen to absorb additional costs arising from the Middle East crisis, including higher energy and transport expenses, as well as the impact of VAT increases and the depreciation of the Romanian leu. The group said consumers had responded positively to its decision to absorb these costs rather than pass them on through higher prices. Cyprus-based technology distributor Asbis on Thursday reported a record third quarter in 2026, with revenue rising by 135.3 per cent year-on-year to $2.19 billion as demand for artificial intelligence infrastructure and consumer electronics fuelled growth across its markets. The company said it had continued to achieve strong sales growth throughout the quarter, despite the ongoing war in Ukraine, one of its largest markets, and turbulence in the Middle East. July and August sales nearly doubled compared with the same months in 2025, while September marked the first time the company had exceeded $1bn in monthly revenue. For the three months ended September 30, 2026, gross profit increased by 106.3 per cent to $134.8 million, compared with $65.3 million a year earlier. Cyprus’ banking sector continued to demonstrate strong capitalisation and asset quality in the second quarter of 2026, with local credit institutions maintaining capital buffers well above European Union averages, according to figures published by the European Central Bank (ECB) on Friday. Cyprus recorded a Common Equity Tier 1 (CET1) ratio of 21.5 per cent in June, placing it fourth among EU member states and comfortably above the EU average of 16.43 per cent. The ratio measures banks’ highest-quality capital against their risk-weighted assets and provides an indication of their ability to absorb financial losses. The difference highlights the strength of the capital position of Cyprus’ banking sector, with its CET1 ratio approximately five percentage points higher than the European benchmark. Cyprus recorded an average annual full-time adjusted salary of €29,547 in 2025, remaining substantially below the European Union average of €41,464, despite a stronger annual increase than the bloc as a whole, according to figures published by Eurostat. The 5 per cent annual increase in Cyprus brought the country’s average adjusted salary up from €28,143 in 2024, continuing a steady upward trend over the previous three years. However, the gap with the EU average remained considerable, with the Cypriot figure standing at approximately 71.3 per cent of the European average, or €11,917 less annually. The figures also placed Cyprus below several other southern European countries, including Greece’s European neighbours Spain, Italy and Malta, although it remained well ahead of Greece, which recorded one of the lowest averages in the bloc. Finance Minister Makis Keravnos and China’s ambassador to Cyprus Yang Yundong discussed ways to expand economic cooperation between the two countries during a meeting in Nicosia on Friday, with trade, investment, shipping and green finance among the areas identified for closer ties. The meeting took place at the Finance Ministry as part of a courtesy visit by the newly appointed ambassador, according to an announcement issued by the ministry. The discussions covered bilateral relations as Cyprus and China mark 55 years of diplomatic ties this year, alongside the fifth anniversary of their relationship being upgraded to a strategic partnership. The talks also focused on prospects for strengthening economic, commercial and investment cooperation ahead of a planned visit by President Nikos Christodoulides to China in early 2027. Cyprus’ social protection expenditure rose by approximately 5.1 per cent year-on-year to an estimated €6.59 billion in 2025, up from €6.28 billion in 2024, while spending remained broadly unchanged as a share of the economy, according to preliminary figures published by Eurostat. However, social protection benefits accounted for 18.07 per cent of Cyprus’ gross domestic product (GDP) in 2025, only marginally higher than the 18.05 per cent recorded in 2024. The figures place Cyprus well below the EU average, where social protection benefits represented 27.49 per cent of GDP in 2025, compared with 27.29 per cent in 2024. Across the bloc, total expenditure on social protection benefits reached an estimated €5.18 trillion, representing a 4.9 per cent increase on 2024. Despite the rise in spending, the EU-wide share of GDP allocated to social protection edged down by 0.2 percentage points in Eurostat’s headline assessment, to 27.5 per cent. Cyprus recorded the strongest annual increase in retail trade across the European Union in September 2026, with sales volumes rising by 7.6 per cent as retail activity across the bloc edged down month-on-month, according to Eurostat. The EU’s statistical office said retail trade volume increased by 0.4 per cent in the euro area and 0.9 per cent across the EU compared with September 2025. Cyprus topped the annual rankings, ahead of Sweden, where retail trade rose by 6.9 per cent, and Bulgaria, which recorded a 5.7 per cent increase. The largest annual declines were registered in Germany, down 2.4 per cent, Romania, down 2.3 per cent, and Spain, down 1.5 per cent. The figures point to continued strength in Cyprus’ retail sector, although the latest monthly data showed a more modest performance across Europe. Cyprus needs to cut bureaucracy, United States Ambassador John Breslow said on Friday warning that the departure of even a single American company over investment barriers is “an avoidable loss”. Speaking at the first annual conference of the American chamber of commerce in Cyprus, Breslow said he was concerned about opportunities going unexploited. “Even one company that leaves is one more than it should be,” he said. He called on Washington and Nicosia to work together to reduce obstacles, saying a stable and predictable regulatory framework is essential for attracting large, long-term investment. TechIsland has welcomed the government’s decision to revise the registration framework for companies with foreign interests, saying the changes will help international businesses remain and expand in Cyprus, encourage further investment and support the development of local talent, while strengthening the country’s position as a technology and business destination. In a statement, TechIsland’s board of directors described the decision as “a significant and positive development that addresses important business needs” and creates “more favourable conditions for companies to maintain and expand their long-term presence in Cyprus, while supporting further investment and the development of local talent.” The decision, approved by the Council of Ministers on October 27, following a proposal by the Ministry of Energy, Commerce and Industry, introduces changes to the registration framework, placing greater emphasis on companies with substantial economic activity and a genuine contribution to the Cypriot economy. Cyprus and Vietnam have explored opportunities to expand bilateral trade, investment and technological cooperation at a business forum held in Nicosia on Friday, with the Cyprus Chamber of Commerce and Industry (Keve) highlighting the potential for closer economic ties between the two countries. The Cyprus–Vietnam Two-Way Trade and Investment Forum, hosted at the chamber’s premises, brought together government representatives, diplomats, business organisations and research institutions to examine ways of strengthening commercial relations and encouraging new partnerships. In its announcement, Keve said the discussions focused on high-value sectors, including shipping, tourism, professional services, technology and renewable energy, as well as research, innovation and higher education. Opening the forum, Keve Deputy Secretary General Emilios Michael highlighted what he described as the complementary strengths of the two economies, arguing that geographical distance should not prevent closer business cooperation. He pointed to Vietnam’s dynamic economic development and expanding role in international supply chains, while presenting Cyprus as a business and investment hub offering companies access to the European market.