The Bank of Cyprus has shared its financial results for the first nine months of 2025. While the bank is performing well in some areas and has increased rewards for its shareholders, its overall profit has fallen. This news comes at a sensitive political moment, as a major opposition party is again proposing a special tax on bank profits. These events highlight a common debate in Europe about how to balance successful companies with the need for fairer economic policies.
Cyprus’s largest bank made a net profit of €353 million up to September 2025. This is 12% lower than the same period last year. The CEO, Panicos Nicolaou, explained that this drop is mainly because the bank earned less from interest, which is a key source of income. However, other important indicators are strong. The amount of new loans given to customers grew by almost one third, which is much higher than expected. Also, the level of bad loans that may not be repaid fell to a record low of 1.2%. Because of this underlying strength, the bank raised its profit target for the full year and paid an early dividend to shareholders.
This financial strength has attracted political attention. The left-wing AKEL party has submitted a new law to parliament. It proposes a "solidarity levy" on bank profits for 2025 and 2026. AKEL's leader, Stefanos Stefanou, argues that banks have earned unusually high profits from recent interest rate increases, while ordinary people and small companies struggle with higher costs. The proposed tax is complex and targets profits considered excessive compared to 2022. The draft law also includes large fines to stop banks from simply charging their customers more to cover the tax.
This is not a new idea; a similar proposal failed in parliament last year. Banks warn that such taxes could make Cyprus less attractive to foreign investors. An international finance expert, Nigel Green, recently discussed how governments can quietly raise taxes by not adjusting thresholds for inflation. He warned this can lead to businesses and skilled workers leaving a country—a serious concern for Cyprus, which wants to be a strong financial centre.
Although the Bank of Cyprus’s share price has risen strongly, showing investor confidence, the new tax proposal creates uncertainty. The coming political discussion will show if the government prioritises using company profits for social support or prefers to protect the competitiveness of its banking sector.