The Cyprus banking sector’s profitability spiked by an annual 644% for full year 2023 reaching €1.27 billion, fueled by the high interest environment, data released by the Central Bank of Cyprus (CBC) show.

According to Aggregate Cyprus banking sector data published by the CBC, net interest income for 2023 jumped by 97% to €1.92 billion, compared with €0.98 billion for full year 2022. The bank’s rising interest income is driven by the consecutive interest hikes of the European Central Bank in a bid to control inflation which spiked in 2022, after the invasion of Russia in Ukraine and the ensuing energy crisis.

Furthermore, taxation paid by banks also jumped by 160% amounting to €166 million for full year 2023, compared with €64 million in 2022.

Moreover, the Cypriot banking sectors Common Equity Tier 1 Capital in the end of 2023 rose to €4.6 billion, compared with €3.86 billion the year before, with banks’ internal capital generation capacity driven by high profits.