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Monday, May 27, 2024

Hellenic Bank: Agreement to acquire CNP Cyprus, for €182 million

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Ελληνικor Τραπεζα: ΣυμφωνΙα εξ αγοτης CNP Cyprus, €εομμyρα /></p>
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<p><strong>CNP Cyprus has announced that its parent company CNP Assurances has begun exclusive negotiations for the sale of CNP Cyprus to Hellenic Bank.</strong></p>
<p>CNP Cyprus operates mainly through <strong>three insurance companies< /strong>: CNP Cyprialife in the life and health sector in Cyprus, CNP Asfalistiki in the general insurance sector in Cyprus and Greece and CNP Zois in the life and health sector in Greece.</p>
<p>The intended transaction is subject in obtaining the required regulatory approvals and <strong>expected to be completed by the 1st quarter of 2025</strong>. The next step in the process is the information and consultation with the European Workers' Council of CNP Assurances.</p>
<p>With the completion of the expected transaction, <strong>the largest Cypriot insurance organization with Hellenic Bank is expected to be created</p>
<p> strong>, to occupy a leading position in Cyprus, with an established  presence in the insurance sector.</p>
<p>CNP Cyprus and its companies are expected to benefit from the new prospects that will arise, which are expected to be beneficial to all stakeholders.</p>
<p>CNP CYPRUS Group clients will continue to enjoy reliable insurance services with the best possible service from our companies and our insurance intermediaries.</p>
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In its own announcement, Hellenic Bank Public Company Limited (the “Bank”) announced that it has entered into exclusive negotiations andhas signed a Right to Sell agreement at a certain price with CNP Assurances for the acquisition of its subsidiary CNP Cyprus Insurance Holdings Limited (the “Transaction”), which operates in Cyprus and Greece and consists among others of: CNP Cyprialife Ltd, CNP Insurance Ltd, CNP Zois SA and CNP Cyprus Properties Ltd. Under the Put Option agreement, CNP Assurances has an option to sell and Hellenic Bank is irrevocably committed to acquire CNP Cyprus Insurance Holdings if this put option is exercised.

Based on French law, the next step will be to inform and consult the European Works Council of CNP Assurances. The Transaction will then be subject to regulatory approvals (including the Commission for the Protection of Competition) and is expected to be completed by the first quarter of 2025.

CNP Cyprus Insurance Holdings Limited is a leading insurance company in Cyprus. It offers insurance products and services in the life and general insurance industries through the largest network of independent agents in the country. In 2023 it employed approximately 330 employees and had gross premiums of €236 million, with market shares of approximately 24% and 15% in the life and non-life industries, respectively[1].

The Transaction is expected to be an important milestone for the further development and strengthening of the Bank's insurance activities, enriching the products and options that will be offered to an expanded customer base. Upon completion of the Transaction, the Bank is expected to have a leading position in the Cyprus insurance market, with market shares of approximately 30% and 23% in the life and general insurance sectors, respectively[2].

The total price is expected to be €182 million, representing a redemption multiplier of 1x redemption price to book value[3], with an estimated capital impact of approximately 2.6 percentage points. Considering the Bank's strong capital position, with a total capital ratio of 28.4% as at 31 December 2023, the adjusted total capital ratio is expected to be approximately 25.8% at completion, significantly higher than the regulatory minimums requirements. Further, the Transaction is expected to consolidate the Bank's presence in the insurance sector and create opportunities for revenue synergies, thus increasing the income from insurance activities and enhancing the quality of the Bank's profitability.

At this stage, the existing activities of the companies involved remain as they are and the companies will continue to operate autonomously and independently. The insurance contracts of the insurance companies, CNP Cyprialife and CNP Asfalistiki as well as those of Hellenic Life Insurance and Pancyprian Insurance remain in force and the benefits, rights and obligations of the customers are not affected.

The Interim Chief Executive Officer of the Bank, Antonis Rouvas, commented: “With this Transaction, the Bank will significantly strengthen its insurance activities and become a leading financial group with a strong presence, both in the banking and insurance sectors in Cyprus. We are excited as the Transaction is expected to be complementary to our business model and will provide significant growth opportunities. We expect to combine the strengths, know-how and valuable experiences of the staff of CNP Cyprialife, CNP Insurance, Hellenic Life Insurance and Pancyprian Insurance to modernize and upgrade our services, expand the insurance options in response to the needs of our customers and offer an upgraded service in the market.»

The Bank has consulted BNP Paribas for the acquisition, Ioannidis Dimitriou D.E.P.E. for legal matters, Cronje & Yiannas Actuaries and Consultants Ltd for actuarial and HR matters and Deloitte Ltd for financial and accounting matters. To the extent required by applicable legislation and regulations, the Bank will keep the investing public informed of any developments on this matter.

[1] Based on statistics from the Association of Cyprus Insurance Companies for the period January 1 2023 until 31 December 2023 (https://www.iac.org.cy/en/statistics/iac-statistical-results).

[2] Considering the Bank's existing activities in the insurance sector, through  Hellenic Life Insurance and Pancyprian Insurance, and based on statistics from the Association of Insurance Companies of Cyprus for the period 1 January 2023 to 31 December 2023 (https://www.iac.org.cy/en/statistics/iac-statistical-results) .

[3] Based on the Audited Financial Statements for the year ended 31 December 2023.

Source: www.philenews.com

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