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CBC: Measures in place to limit impact of Ukrainian crisis on Cyprus’ banking sector

CBC: Measures in place to limit impact of Ukrainian crisis on Cyprus’ banking sector


The Central Bank of Cyprus (CBC) in a written statement assures that the necessary precautions have been taken to minimize any impact of the war in Ukraine on the financial system of Cyprus. At the same time, the CBC notes that due to the rapid development of events, the analysis of the potential impact and possible risks is ongoing.

The CBC answered a question from the Cyprus News Agency about the degree of exposure of the Cypriot financial system to Russia and Ukraine, respectively, and about the measures taken to overcome the consequences of the Ukrainian crisis.

According to the response from the office of the PPM Governor Konstantinos Herodotus, the PPM, in cooperation with the European Central Bank (ECB), is closely monitoring developments in Ukraine and any consequences of what is happening, as well as the sanctions that have been or will be imposed.

“The CBC and the ECB have taken timely and preventive measures to ensure that any influence, including the extent to which banks influence Russia, will be limited,” the report says.

At the same time, CBC notes that thanks to the efforts of recent years, the banking sector in Cyprus now has an increased ability to cope with any shocks. As mentioned, capital adequacy levels assessed using Common Equity Tier 1 stood at 17.2% in September 2021, significantly higher than the corresponding European average of 15.7%. This strengthens the ability of the domestic banking sector to absorb unexpected losses and continue financing the real sector of the economy. The CBC also notes that the Cyprus banking sector is currently one of the most resilient in Europe in terms of liquidity levels with a coverage ratio reaching 345% in January 2022, almost double the European average of 174% and more than three times the average liquidity level. Its minimum supervisory requirement is 100%. In addition, it is noted that the deposit base of the banking sector of Cyprus in January 2022 amounted to 51.3 billion euros, which is one of the highest levels observed since 2014, while the share of domestic residents in deposits reaches 82%, which is significantly enhances the stability of the industry.

It is also noted that the systemically important banks in Cyprus are under the direct control of the ECB.

“Due to fast events, analysis of the potential impact and potential risks (cyber security risks, worsening economic situation, impact on energy prices, etc.) is ongoing so that any measures can be reconsidered,” the CBC said in a statement.

There are no special problems due to sanctions, the banks of Cyprus are taking a wait-and-see attitude.

Cypriot banks are on a waiting list amid the ongoing process of sanctions against Russia, with bank executives saying the sanctions do not pose much of a problem so far.

As the discussion revolves around cutting Russia off from the SWIFT international financial transaction system, sources at the Bank of Cyprus told CNA that a number of Russian banks are already on the US and UK sanctions list.“ As for the bank, we are fully complying with the sanctions, which is not a particular problem for us, since we have a large number of banks with which we cooperate,” the same sources said.

Regarding the bank’s broader activities, the same sources noted that there is no particular impact other than imposing sanctions on the bank’s systems. “The situation is ongoing and we are monitoring developments.”

In addition, regarding transactions in rubles, the same sources said that the bank is taking all appropriate actions in accordance with the sanctions and depending on how the banks of the euro area operate.

Source and photo:, Editor

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