Hellenic Bank-Eurobank Merger to Create Largest Bank in Cyprus

Eurobank Group, which acquired 37.5% stake in Hellenic Bank in Cyprus taking its share to 93.47% for $786 million a fortnight ago, is set to completely takeover Hellenic Bank after receiving relevant regulatory approvals and the merger is expected to create one of the largest financial institutions in Cyprus.

The acquisition of additional stake by Eurobank S. A., a subsidiary of Eurobank Ergasias Services and Holdings S.A, includes 21.33% stake from Demetra Holdings for $446.95 million, 3.33% from Logicom for $66.69 million and 12.85% from the Cyprus Bank Employees Welfare Fund, the Cyprus Bank Employees Health Fund and the Financial Sector Provident Fund for $269.32 million.

Prior to the Transaction, Eurobank directly held 55.96% of the total issued share capital of Hellenic Bank and increased its holding to 93.47% on February 10.

Hellenic Bank CEO Michalis said that the Eurobank Group currently holds 93.47% of the bank’s share capital and is expected to increase its percentage to 100%, following the mandatory public offer and the redemption right process in the first half of 2025.

He pointed out that after supervisory approvals, the process will proceed with the merger of Hellenic Bank with Eurobank Cyprus, creating one of the largest financial institutions in Cyprus.

“The acquisition is a significant milestone for the bank, as it will establish us as one of the leading financial services organisations in Cyprus, prioritising our customers, our people and the broader society where we operate,” he said.

He also emphasised that Eurobank Cyprus is part of the Eurobank Group and one of the leading banking groups in Greece and the wider region, with total assets exceeding approximately $105 billion, aims to develop its activities and become the best bank in Cyprus, through strengthening customer relations and excellent customer service.

“In addition, we expect to complete the acquisition of CNP Cyprus Insurance Holdings by end of next month,” he said.

Financial Results

In his comments on the Hellenic Bank’s financial results in FY24, the CEO described 2024 as a landmark year and said that the bank has achieved a strong financial performance in 2024 with a net profit of $401.36 million (+10% y-o-y, adjusted for discontinued operations) and a return on equity of 23%.

“The balance sheet remains robust, with a total capital ratio of 32% and a liquidity coverage ratio of 519%, while the NPL ratio has decreased to 2.4%,” he added.

The new $1.15 billion borrowing for 2024 demonstrated the Group’s commitment to supporting the domestic economy and serving its customers and the business models of Hellenic Bank and Eurobank Cyprus were complementary and will further enhance products and customer service.

Hellenic Bank saw a 12% y-o-y increase in net interest income, reaching $627.72 million in 2024 and new lending for the year amounted to $1.13 billion, with 99.6% of new lending exposures post-2018 classified as performing.

Additionally, operational efficiency remained strong, with a cost-to-income ratio of 40% and liquidity levels were also robust, with a liquidity coverage ratio (LCR) of 519% and $5.87 billion placed at the European Central Bank (ECB).