Banking and Financial Services

The Cyprus banking and financial services sector is diverse, comprising of the domestic banks, the co-operative credit institutions (CCIs), the former international banking units (IBUs), insurance companies, and other companies that offer financial intermediation services.

There are many foreign banks from the Middle East, Europe, Africa and Asia that operate as subsidiaries, branches or representative offices in Cyprus.

In 2004, Cyprus completely liberalised capital movements enabling the former IBUs to provide credit and full banking services as branches or subsidiaries of foreign banks.

Sector Synopsis

All banks maintain correspondent networks around the world and subscribe to SWIFT, Reuters, Telerate and other services
In 2010, Financial Intermediation services accounted for 7.3% of GDP
The Cyprus banking sector operated almost 910 branches and employed over 12,700 people in 2010
At the end of 2010, the banking sector held almost 56.4 billion Euros in deposits and loaned over 49 billion Euros
The Cyprus banking and Financial Services sector is consisting of the domestic banks, the Co-operative Credit Institutions (CCIs), the former International Banking Units (IBUs), insurance companies and other companies that offer financial intermediation services
Many opportunities exist in financial products and services such as fund registration, administration and management

Source: Association of Cyprus Commercial Banks Annual Report; Insurance Association of Cyprus

Bank Statistics (2011)

Four local banks listed on the Cyprus Stock Exchange (CSE)
Eight subsidiaries of foreign banks
Three other local banks
Nine branches of banks of European Union countries
Sixteen branches of banks of non-EU countries
One representative office of a bank
110 Co-Operative Credit Institutions

Source: Central Bank of Cyprus

Supervisory/Regulatory Framework

Various regulatory authorities are involved in the monitoring of all financial institutions

The Central Bank of Cyprus, an autonomous institution established in 1963, is the supervising authority of the banking system in Cyprus
The Central Bank of Cyprus follows the Basel Committee and European Union banking regulation directives. In January 2008, the Central Bank of Cyprus was integrated into the Eurosystem under the European Central Bank
The Cyprus Securities and Exchange Commission
The Co-operative Credit Societies’ Supervision and Development Authority
The Commissioner of Insurance Companies (Ministry of Finance)
Insurance Services Law
Authority for the Supervision of Pension Funds (Ministry of Labour and Social Insurance)
Cyprus has adopted International Financial Reporting Standards over three decades and has passed Anti Money Laundering legislation (Law188(I)/2007)
MiFiD
Transparency Law
Anti Money Laundering Law

Industry Associations

Association of Cyprus Commercial Banks (ww.accb.com.cy)
Association of International Banks
Insurance Association of Cyprus (www.iac.org.cy)

Opportunities

Cyprus welcomes investors interested in Banking and Financial Services. As the global market of business processes outsourcing and knowledge processes outsourcing is forecasted to expand significantly, Cyprus is well placed to attract more of this growing market by offering its expertise, financial stability, cost competitiveness, educated human resources as well as other comparative advantages.