The managing director of the Eurobank group Fokion Karavias sent messages from Athens to the employees, the shareholders of Hellenic Bank and also to the Cypriot financial environment, unfolding the day after the deal and the way the two banks operate, giving the impression of the intentions for the investment in Cyprus.
Speaking on Monday evening during a lunch at a Cypriot delegation of journalists, Mr. Karavias, together with executives from the top management team from Cyprus and Greece, spoke positively words about Greek, stressing that it is a very good bank, which has a strong footprint in retail banking, strong capital and liquidity and valuable executives in its workforce, as a result of which it complements the operating model of Eurobank, whose loan portfolio is mainly focused on business loans.
He stressed that Hellenic has a central role in Eurobank's plan in 2024, to create a large Greek-Cypriot banking group, stating that the investment of €800 million is the largest that will be made in Cyprus with cash from a non-Cypriot banking organization and a significant part of the funds will end up with private shareholders.
For Eurobank's plans in Cyprus, the President of the Republic has also been informed, while SSM also sees the move positively, as Mr. Karavias mentioned, stressing that the Eurobank group is in a particularly positive situation, organically recording profits €1.5 billion, up 70%, return on equity 18%, CET1 capital ratio at 18% and NPL ratio at 3.5%.
Regarding reports in Cyprus that Eurobank will use Hellenic Bank's liquidity in other markets, Mr. Karavias was unequivocal, stressing that, firstly, the group has given examples of writing in the Cypriot market since 2007, it is not a parachute banking group and, secondly, in all the countries in which it operates (Greece, Cyprus and Bulgaria) it has excess liquidity to develop financing.
Reference to the electrical interconnection< /strong>
The managing director did not hide that Eurobank is interested in financing large geostrategic projects, referring to the electrical interconnection of Cyprus – Greece and Israel (Great Sea Interconnector< /strong>) but also real estate projectsin Limassol, stressing that they will be business plans that will only be related to Cyprus and not to other points of activity of the group. If there is a financing plan for natural gas, Mr. Karavias explained that the bank is not an entrepreneur but finances sustainable projects, even in the energy sector, if the lending is deemed sustainable.
Messages to shareholders
Of course, the way Hellenic operates, what will be the next day, what will happen after the submission of the public proposal and what are the various scenarios if the Eurobank group does not secure 21.3% of Dimitra Investments could not be absent from the questions. or what the scenarios are if he secures it.
Mr. Karavias pointed out that in the immediate future two separate, independent banks will operate in parallel in the Cypriot market, Eurobank Cyprus and Hellenic, but, as he noted, we cannot determine in time until when this will be done, indirectly shifting the focus of developments to the stance that the second largest shareholder in Hellenic will take.
The Eurobank group, when it receives the regulatory approvals, will have a 55.3% stake in the share capital of Hellenic and the next step will be the submission of a public proposal to the remaining shareholders. As Mr. Karavias noted, it is important to reach an agreement with all shareholders and if we end up purchasing a significant percentage, this will mark the next step, which will be the acquisition of Hellenic.
“I don't know if there are shareholders who agree or disagree”, he noted, and this will be seen along the way, but emphasized that he maintains excellent relations with all shareholders, expressing optimism that this will continue. He stated, in fact, that he has held discussions with them, described them as intelligent people as individuals and businessmen and expressed his appreciation that as presidents of public companies they will not reach decisions that will be at the expense of the organizations that are shareholders.
Five pillars of work
During the presentation, the managing director of Eurobank Cyprus Mihalis Louis said “Eurobank Cyprus started its operations in the Cypriot market in 2007 and today is the third largest bank of the island. It stands out for its reliability, customer-centric approach, high level of service and well-trained, experienced human resources.
“Our business model is what differentiates us from our competitors, as we offer specialized solutions based on the needs of our customers. We are active”, he continued, “in five main pillars of work, namely Corporate Banking, Wealth Management, International Business Banking, Global Markets and Affluent Banking”.
The Deputy CEO of Eurobank Stavros Ioannou< /strong>pointed out that “synonymous with extroversion and growth, Eurobank implements targeted initiatives to further strengthen its presence in the main markets where it operates. In this context, the initiatives that have been carried out to strengthen the group's presence in Bulgaria and Cyprus are included, with the latter expected to play a central role as a European gateway for businesses from the Middle East and India”.
Advantages of Cyprus for business relations with India
The Indian market seems to play an important role for Eurobank's plans in Cyprus, wanting the group to capitalize on the significant advantages that exist. As Mr. Karavias noted, the effort is not easy, but there is a will at the level of governments, both in Greece and Cyprus. However, apart from this, there are other events that help to implement the plans. First, the main shareholder of Eurobank is Prem Watsa, who was born in India and at a young age found himself in Canada, later creating Fairfax Financial Holdings, a global investment and insurance company based in Canada.
But beyond the main shareholder of Eurobank and the interconnection with India, Cyprus, according to Mr. Karavia, can be the gateway for businesses, having as an advantage the fact that English is used as the business language, such as and in India, the two countries are members of the Commonwealth, corporate law is equivalent to Indian law, there is a stable tax system in Cyprus, there is expertise at the level of lawyers and accountants to welcome businesses and a strong banking system.
The managing director also referred to the interest that exists from the Greek government for cooperation for India, on the occasion of the recent visit of the Greek Prime Minister Kyriakos Mitsotakis.
At the group level and in the field of the new generation of payments, it is worth noting the important agreement between Eurobank and NPCI International for the use of the innovative UPI (United Payments Interface) technology in remittances from Greece to India. The strategic partnership with NPCI International is fully in line with Eurobank's strategic commitment to be the bank of choice for businesses from India seeking to establish themselves in Greece or Cyprus as an entry point for their business in Europe .
