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Karavias: Separate operation of Hellenic – Eurobank, frequentization when the conditions are ripe

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Καραβλασ: Χωρ and iota; ;γoνευση oταν ωριμàσουν οι συνθorκ&epsilon ;ς

By Alexia Cafetzis

At this stage, Hellenic Bank and Eurobank Cyprus will continue to operate separately until the conditions for their final merger are ripe, said the CEO of the Eurobank group, Fokion Karavias.

Eurobank is now its major shareholder. second largest Cypriot Bank and aspires to create the largest banking group in Cyprus, through the final merger of Hellenic Bank and Eurobank Cyprus, two Banks with mutually complementary business models.

In a meeting with a group of Cypriot journalists in Athens, Mr. Karavias was reassuring about labor issues, saying that Hellenic Bank “will rely exclusively on Cypriots” and that the practice regarding personnel is the same as that followed both in Cyprus and and Greece with the implementation, if necessary, of voluntary exit plans, in cooperation with the trade union bodies.

In his statements, Mr. Karavias reiterated that the investment in Hellenic Bank is a “vote of confidence in the economic prospects” and the largest investment made in cash, which is expected to exceed €800 million.

Accordingly with the dialogue, the acquisition of Hellenic Bank is considered as a key driver for the realization of Eurobank's strategic goal, which aims for 50% of the group's profitability to come from international activities by 2026.

Eurobank has already acquired 55.3% of the share capital of Hellenic Bank, a share that is expected to receive the approval of the supervisory approvals (EKT, CBC and Superintendent of Insurance Companies). After these approvals, Eurobank, based on the Public Tenders Law, will submit a public tender for the acquisition of all the remaining shares.

Pending these developments, Mr. Karavias said that the two Banks will operate separately and independently with separate managements and Boards of Directors. He did not give a schedule of the next moves, until discussions are held with the rest of Hellenic's shareholders, mainly Demetra Holdings Plc, which owns 21% of the shares.

“Hellenic Bank also has other shareholders. We must agree with the other shareholders on a possible timetable, when and if we will make such a move”, said Mr. Karavias, when asked about the merger of the two banks.

“So”, he added, “our own plan is at this stage to proceed with the operation of two separate Banks. If the conditions are ripe and whenever the conditions are ripe, of course we do not hide it that our desire is to proceed with the merger of the two Banks, because that way we will have a more efficient operation, but this does not depend only on us, we must move in cooperation with the remaining shareholders of Hellenic Bank”.

As regards the timetable of the public proposal, Mr. Karavias stated that its submission is expected around the end of the second quarter, once the supervisory approvals are given.

When asked what percentage would allow Eurobank to proceed with its plans, Mr. Karavias said that he cannot prejudge what participation he will have in the public proposal and what percentage of the share capital Eurobank will end up with. “If we end up with a rate that would allow us to move forward more quickly with the merger of the two Banks that would obviously be something we would study very seriously and expedite such a potential decision,” he added.

Messages to Hellenic shareholders

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When asked what is Eurobank's message to Hellenic shareholders , Mr. Karavias said that he does not know if there are shareholders who agree or disagree with Eurobank's plan, adding that he has “excellent relations” both personally and at the banking level with the other major shareholders of Hellenic.

“I highly appreciate them as individuals as businessmen, as Presidents of public companies, I think they are intelligent people and I don't think that a discussion between intelligent people will not lead to some agreement in the end that is for the benefit of the common organization, which are the shareholders. We will see that in the future, but let me say that I am very optimistic about the continuation of the already excellent relations we have”, said the CEO of Eurobank.

We are a Greek-Cypriot group

We are a Greek-Cypriot group

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He underlined that Eurobank is a “Greek-Cypriot group” in the sense that the executives in Cyprus were not limited to Cypriot operations but were also utilized at the group level, such as Michalis Louis who, in addition to the position of CEO of Eurobank Cyprus, has the wider responsibility of the group's international operations and the responsibility of the group's private banking.

Also Haris Hamakis, who took over as CEO of Eurobank Luxembourg, having under his responsibility the three private banking centers of the group (Greece, Cyprus and Luxembourg), the Cypriot head of internal control Despoina Andreadou, the second one in the area of ​​IT systems Spyros Loizou, while also the Deputy Managing Director, Stavros Ioannou, whose mother is Cypriot.

The approach to personnel matters

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Answering a question about whether Eurobank will be aggressive in personnel matters, Mr. Karavias said that Eurobank “is not a paratrooper in Cyprus”, since it has been operating on the island since 2007 through Eurobank Cyprus.

« We already have a bank, we have staff, we already have employees and I don't think anyone in Cyprus can say that the way we handle our staff is aggressive or callous”, he stressed.

Regarding staff, he said that Eurobank implements voluntary exit plans, he said, adding that no complaint has been heard about the voluntary programs implemented by the Bank in Greece with an attractive package, while several such programs were implemented from 2013 onwards in cooperation with the bank unions.

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Recalling that Hellenic Bank also implemented a voluntary plan in 2022 with success, Mr. Karavias added: “So if we need to do something in the future, and I can't discount it at the moment, but if necessary it will be done in the way that we are doing in Greece and in the way that the previous management of Hellenic did in Cyprus, i.e. the employees will choose it completely voluntarily and if they judge the terms of the program to be satisfactory”.

“First of all, because we think it is a very good Bank, it is a Bank that has a strong footprint in retail banking in Cyprus, it has very strong capital, it has very good liquidity, it has a business model, which is absolutely complementary to our own bank, which operates mainly in the field of corporate banking and private banking and treasury, while Hellenic's strength is in the field of retail banking”, he explained.

As he added, Hellenic Bank also has valuable executives in its workforce, executives with whom we expect to make full use of them and utilize them in the area of ​​our group, as well as a very significant liquidity.

At this point , repeated what he had stated in the teleconference with investors on the group's results for 2023, that Hellenic's liquidity will be used for the benefit of the Cypriot economy and for the financing of some international projects, which are related to Cyprus.

< p>“And we certainly do not need this liquidity in other parts of the group”, he emphasized, noting that there is excess liquidity in all the countries where the group operates.

He also pointed out that important investments are being made and will be made in Cyprus, such as the project of the electrical interconnection of Greece with Cyprus and Israel, worth €1.9 billion, saying “Eurobank Cyprus aspires to play a central role in the financing of this project, which is a very important project for the Cypriot economy”. He also referred to important projects in the field of real estate and tourism, which the Bank aspires to finance.

Basis for business development for the region and India

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Mr. Karavias said that as part of the group's strategy “ we believe that Cyprus can be a base for the development of Eurobank's operations and cooperation as a group with the dynamic economies of the Middle East and India, which are economies which in the coming years and decades we expect to have a very strong pace development”.

He explained that the strategic choice is based on a “positive geopolitical predisposition in this direction”, as well as the Government of Greece and the Government in Cyprus wish to develop the perspective, which was also evident in the visit of Indian Prime Minister Narendra Modi to Athens.< /p>

“Especially Cyprus”, he said, “can offer significant advantages to these businesses and become a gateway for these businesses to set up in Cyprus to form the base of operations they want to develop in the EU ».

He mentioned the proximity of Cyprus to these countries, the business language in Cyprus which is the same as the countries of the Middle East, the status of Cyprus as a member of the Commonwealth and the same corporate law which is equivalent to that of India (common law). and the existence of a double taxation treaty with India, as well as the developed professional services sector.

“And now Cyprus has a strong banking system, which is very important in the eyes of foreigners that is directly supervised by the ECB and can serve the needs of foreign companies,” he said, adding that “still a small percentage of these companies to bring in Cyprus will be a very big advantage for the country's economy”.

Eurobank will open a representative office in Mumbai, and signed a programmatic agreement for the introduction of India's payment system in Greece.

< p>He further said that Eurobank's major shareholder (33%), Toronto, Canada-based Fairfax Financial Holding, and its owner, Indian-origin Prem Watsa, has been operating in India through Fairfax Financial India with investments worth billions.

The board of directors of the group in Cyprus

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Finally, the President of Eurobank, Georgios Zanias, said that the next week, the group's Board of Directors will meet for four days in Limassol (March 20-23). “This shows our appreciation and the faith we have in the country,” he pointed out

Source: 24h.com.cy

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