The solvency ratio of the Cypriot banking sector increased to 23.3% In the second quarter of 2023, according to data released by the Central Bank of Cyprus (CBC). This marks a rise from the 21.7% reported in the first quarter of the year, reaching the highest point since March 2018.

Key aggregate financial indicators for the Cyprus banking sector provided by the CBC reveal a decrease in the cost-to-income ratio to 32.9% in June 2023, down from 33.5% in March 2023. This suggests an increased level of efficiency.

There was also a significant increase in the Common Equity Tier 1 (CET1) capital ratio, reaching 20.9% in comparison to 19.3% in the first quarter of 2023. This represents the highest point since March 2018.

As regards income sources, net interest income constituted 72.6% of the total income at the end of June, up from 68.5% in March 2023. Net income from fees and commissions accounted for 15% in the second quarter, showing a slight decrease from the previous quarter's 15.3%.

As of June 2023, total loans amounted to 39.5% of total assets, a decrease from 40.5% reported in March 2023. Cash and trading asset represented 37.9% of total equity in June 2023, compared to 38% at the end of March the same year.

In terms of expenses, staff cost increased to 55.7% in the second quarter of 2023, compared to 55% in the first quarter.