Find Banking and Financial Services expertise in Cyprus
Cyprus’ financial system is relatively large and sophisticated. The sector is comprised of companies involved in commercial banking, accounting and tax, cooperative credit, pension funds, capital markets and insurance. In 2009, the country’s banking sector assets represented 69% of GDP, a larger percentage than that of the UK or Switzerland. There are 14 banks in operation consisting of three specialized financial institutions – the Housing Finance Corporation, the Cyprus Development Bank Ltd and the Mortgage Bank of Cyprus Ltd – and 11 commercial banks. Of these five are domestic, four are subsidiaries of foreign banks and two are branches of foreign banks (2011). There is also a significant role played by domestically-owned credit institutions, in the form of both cooperatives and commercial banks, comprising 63% of total banking assets in 2009. Despite the fact that the biggest domestically-owned banks in Cyprus are relatively small in absolute terms, their significant size as a proportion of GDP places them above those in most other European countries. This phenomenon translates into high concentration levels, with the three biggest banks – Bank of Cyprus, Marfin Popular Bank and Hellenic Bank – controlling 56% of domestic deposits and 48% of domestic loans (2011). These institutions have been central to expansion abroad, particularly into Greece.
Regulation of Financial Services
The sector is regulated and supervised prudentially by the Central Bank of Cyprus (CBC), which is also responsible for ensuring the general stability of the country’s financial system. It has responsibility for issuing licenses to carry on banking business and for supervision of commercial banks’ activities. In international terms the CBC acts in conjunction with the supervisory authorities of other EU member states with regard to EU banks of financial and credit institutions operating in Cyprus. Some of the non-bank financial institutions possess their own supervisory authorities, in collaboration with the CBC, to oversee their business, regulations, incorporation and any financial activities. In some circumstances the CBC may take direct control or supervision of their financial activities. The Cooperative Central Bank (CCB) acts as a central body for most credit cooperatives. In relation to soundness of banks it was ranked 83rd in the world according to The World Economic Forum’s Global Competitiveness Report (2012-2013).
Development of Financial Services
The World Bank’s Ease of Doing Business Report rated Cyprus 78th in the world (out of 183 countries) for getting credit. In terms of protecting investors it ranked prominently at 29th, above regional compatriots Turkey, Greece and Portugal. The World Economic Forum’s Global Competitiveness Report (2012-2013) rated Cyprus 35th in the world (out of 144 countries) for its availability of financial services and 50th for affordability of financial services, in both cases coming above the world mean. In relation to financing through the local equity market it placed 85th in the world, above regional competitors such as Greece and Spain.For ease of access to loans it was ranked well at 33rd in the world, placing it just three places below world leader South Africa.
|Banking and Financial Services organisations in Cyprus|
|Central Bank of Cyprus||
|Cyprus Research Centre (KYEM)||
|Russian Commercial Bank||