A delegation of Cyprus’s three systemic banks spent two days in Brussels this week meeting European institutions and presenting data on the country’s banking sector. The trip, which included stops at Bloomberg’s headquarters and the European Parliament, drew on figures from the Central Bank of Cyprus’s 2025 annual report. It marked the first time Cyprus has run this kind of roadshow on European soil, after a decade of similar efforts in the United States.
The Association of Cyprus Banks framed the visit as a turning point. Earlier US roadshows had focused on reversing the negative image of Cyprus as a financial centre associated with “grey areas” and insufficient controls against money laundering, the Association said. The Brussels visit, by contrast, sought to promote what bankers described as a transformed sector. The data they carried supported the message: every headline metric Cyprus brought to the table sits above the European average, and one now sits below it.
The Delegation Lands in Brussels
The Association of Cyprus Banks (ACB) led the visit, which included four of the most senior executives in the country’s banking sector. They were:
- Marios Skandalis, Director General of the Association of Cyprus Banks
- Charis Pouangare, Deputy CEO of Bank of Cyprus
- Charis Habbakis, Deputy CEO of Eurobank Ltd.
- Miltos Michailas, CEO of Alpha Bank Cyprus
In Brussels, the group held a formal presentation at Bloomberg’s headquarters and a separate set of meetings at the European Parliament. Other participants included embassy officials, central bank representatives and institutional stakeholders, broadening the trip’s audience. The Kathimerini Cyprus newspaper said the programme covered corporate governance, anti-money laundering rules, KYC procedures, capital adequacy, non-performing loans, liquidity, cost-to-income ratios and new lending. A second report, on the Association of Cyprus Banks’ Brussels presentation, said the delegation had spent the past two days in the Belgian capital.
The tone of the meetings was different from earlier outreach, the Association said. Where past US visits had been framed around defending the sector’s reputation, this one aimed to promote the broader achievements of Cyprus’s banks. The Association called it a new chapter, following a decade of reforms and restructuring.
What the Central Bank Data Show
The presentation in Brussels drew heavily on the Central Bank of Cyprus’s 2025 annual report, released earlier this year. Capital, liquidity, profitability and efficiency all came in stronger than the European average.
On capital adequacy, the CET1 ratio, the standard measure of banks’ ability to absorb losses, reached 25.8% at the end of December 2025, against a European average of 16.3%. The Central Bank’s Cyprus banking sector soundness indicators for Q3 2025 put the figure even higher, at 26.1%, calling the solvency position “robust and resilient”. The Q3 reading sat well above the European Central Bank’s Q3 2025 aggregate of 16.1%.
| Indicator | Cyprus (end-Dec 2025) | European average |
|---|---|---|
| CET1 ratio | 25.8% | 16.3% |
| Liquidity ratio | 319% | 163% |
| NPL ratio (EBA methodology) | 1.6% | 1.8% |
| Non-performing exposures | 3.2% | n/a |
| Return on equity | 14.2% | 10.4% |
| Net interest margin | 2.6% | 1.6% |
| Cost-to-income ratio | 41% | 53.3% |
Liquidity was the second area where Cypriot banks sat well ahead, with a ratio of 319% at end-December 2025, well above the 100% regulatory minimum and far above the EU average of 163%. Profitability and efficiency held up too. Return on equity came in at 14.2% in 2025, against an EU average of 10.4%. Net interest margin of 2.6% and a cost-to-income ratio of 41% both beat European averages of 1.6% and 53.3%.
Across capital, liquidity, profitability and efficiency, Cypriot banks sat well ahead of the European average on every measure in the data the Association brought to Brussels. That was the case the Association made to its European audience.
From Washington 2017 to Brussels 2026
Cyprus’s Brussels roadshow is the European extension of an outreach effort that began in the United States around 2017. That year, the government hired the law firm Pillsbury Winthrop to help repair the country’s reputation in the US. The effort was considered successful: it attracted investment from American institutions and raised the number of correspondent banks dealing in dollars to five. The Brussels trip now applies the same template, the Association said, in a setting where the audience is more familiar with the country’s recent history. The shift in tone is what makes the visit different.
Earlier US visits had to win back trust, the Association of Cyprus Banks noted. They focused on tightening the regulatory framework, strengthening compliance and anti-money laundering procedures, and cleaning up balance sheets after the financial crisis. The Brussels meetings took that work as a given. Instead, bankers emphasised the sector’s resilience, stronger governance and improved financial fundamentals.
An NPL Ratio Below the EU Average, For the First Time
Using the European Banking Authority’s methodology, Cyprus’s non-performing loans ratio fell to 1.6% at the end of December 2025, the Central Bank of Cyprus said in a February 2026 release. The EU average stood at 1.8% as of September 2025. Cyprus was, for the first time since 2014, below the European benchmark on this measure.
2014 is the relevant year because the EU harmonised the definition of non-performing loans in that year. Flagged by the Central Bank as a milestone, the cross-over has not happened at any point in the intervening decade. Meanwhile, the improvement came alongside a coverage ratio of 62.3%, meaning Cypriot banks had set aside provisions equal to roughly six out of every ten euros of non-performing loans on their books. The downward trajectory has been visible for months, with the latest Cyprus NPL data showing the ratio continue to fall. Restructured loans stood at €0.8 billion at the end of December 2025, of which €0.3 billion still classified as NPLs.
On a broader basis, non-performing exposures fell to 3.2% of total loans in 2025, down from 6.2% in 2024. The Central Bank said the decline reflects balance sheet deleveraging and the efforts of Cypriot credit institutions to strengthen asset quality. Smaller institutions still carry a relatively elevated stock of problem loans, the Central Bank noted in its Q3 2025 soundness indicators, even as the sector as a whole has cleaned up.
All Four Rating Agencies on the Same Page
Credit raters have moved in the same direction as the Central Bank data. According to the Kathimerini Cyprus newspaper, all four major rating agencies have either upgraded Cyprus or reaffirmed a positive assessment in their most recent reviews. The country’s sovereign ratings now sit at A3 from Moody’s, A- from S&P, A- from Fitch and A from Morningstar DBRS. Three of those ratings carry a positive outlook.
The pattern is recent. Moody’s upgraded Cyprus from Baa2 to A3 in November 2024, citing a material improvement in fiscal and debt metrics; S&P and Fitch both raised their outlooks to positive in November 2025, and Morningstar DBRS confirmed A with a stable trend in September 2025. The four agencies and their current ratings are:
- Moody’s: A3, stable (upgraded from Baa2 in November 2024)
- S&P Global: A-, positive (outlook raised in November 2025)
- Fitch: A-, positive (outlook revised in November 2025)
- Morningstar DBRS: A, stable (confirmed in September 2025)
The Sanctions Question That Travels with the Story
Cyprus’s banking sector has not been free of controversy. International scrutiny has, at times, focused on cases involving investments, sanctions and concerns about access to the financial system by high-risk individuals.
The Cyprus Mail reported that, in Brussels, the feedback reflected a broader and more favourable perception of Cyprus’s banking industry, one that extends beyond the issues of anti-money laundering, regulatory compliance and sanctions that had traditionally dominated previous discussions. In the Association’s framing, the shift reflects a decade of reforms and stricter controls. The sanctions and compliance story has not disappeared from Cyprus’s banking pitch.
It is, however, no longer the lead. Outside the banking delegation’s framing, the historical record on sanctions enforcement is more mixed. A 2023 ICIJ-led investigation, Cyprus Confidential, found that PwC’s Cypriot unit had helped Russian clients move wealth even as Western sanctions tightened, with leaked records covering the period from the mid-1990s to April 2022. ICIJ’s analysis identified professional firms on the island working for 96 Russian individuals who came under Western sanctions. In response, a Cypriot government spokesperson told ICIJ at the time that the country had, since 2013, engaged in persistent efforts to stabilise its banking sector and become a top jurisdiction for anti-money laundering and sanctions enforcement.
Frequently Asked Questions
What was the Association of Cyprus Banks doing in Brussels?
The Association led a two-day visit during which executives from Bank of Cyprus, Eurobank Ltd. and Alpha Bank Cyprus presented data on the country’s banking sector at Bloomberg’s headquarters and the European Parliament. In Brussels, the trip carried a different message from the US roadshows the Association has run since 2017, when Cyprus hired the law firm Pillsbury Winthrop to help repair its reputation with American institutions. The Brussels version focused on the same audience of European institutions and investors, but with a new emphasis: the sector’s reform programme is largely complete, and the numbers back it up.
Why is Cyprus’s NPL ratio falling below the EU average a milestone?
The Central Bank of Cyprus flagged it explicitly in its February 2026 release. The EU harmonised its definition of non-performing loans in 2014. At no point in the intervening decade had Cyprus been below the European average on the comparable measure, until now. The non-performing loans figure on the broader basis, 3.2% of total loans, was also down sharply from 6.2% in 2024.
What are Cyprus’s current credit ratings?
Cyprus is rated A3 (stable) by Moody’s, A- (positive) by S&P Global, A- (positive) by Fitch and A (stable) by Morningstar DBRS. Moody’s moved Cyprus up from Baa2 to A3 in November 2024, S&P raised its outlook in November 2025, Fitch revised its outlook to positive later in November 2025, and DBRS confirmed A with a stable trend in September 2025.
How does this connect to the US roadshow from 2017?
The Brussels visit is the European version of a format Cyprus has used in the US since 2017, when the country hired the law firm Pillsbury Winthrop to help repair its reputation. Earlier US visits focused on tightening regulation, strengthening compliance and rebuilding correspondent banking relationships; the number of US dollar correspondent banks rose to five. The Brussels trip applied the same template, the Association said, in a market where the audience is more familiar with Cyprus’s recent history.
