The Bank of Cyprus is leaving open the possibility of new selective and small acquisitions, and has set three basic criteria that must be met before proceeding.
At the same time, the Bank's CEO, Panicos Nicolaou, clarified that there is nothing to announce at this time and that if there is any new move, it will be announced at the appropriate time.
Speaking to journalists in Athens and referring to the Bank's strong capital adequacy, Nicolaou, when asked about it, stressed that "we will use our funds for the organic growth of the Bank and for investment in the business model and we remain fully committed to providing strong distributions with regular distributions amounting to 70%."
Furthermore, he said, "Our high capital ratios enable us to provide additional returns to shareholders, through additional dividends."
Regarding the possibility of new acquisitions, the CEO of Bank of Cyprus, after stating that "there is flexibility for possible selective small acquisitions in the future", indicated that "we have set three basic criteria for selective small acquisitions."
First, he explained, "there must be a strategic logic. Acquisitions must accelerate organic growth, concern sectors in which we seek to diversify or constitute selected portfolios and be aligned with our risk profile."
Secondly, Nicolaou clarified, "We will not make an acquisition that would affect our dividend distribution policy to our shareholders, which is our most important priority."
Thirdly, he pointed out, "they must meet our financial criteria."
In light of the above, Nicolaou emphasised that "the acquisition of Ethniki Insurance last summer proves the application of these criteria."
"We increased our insurance revenue, our market share and in a way that required minimal capital, with minimal impact on our capital while also helping the Group's goals," he further indicated.
Investing in Wealthyhood
Referring to the Bank's recent investment in Wealthyhood, he said that it is an investment "that allows us to offer digital access to our clients, in the private sector, to a range of ETF stocks."
"Specifically, we have acquired a minority stake in a pan-European technology company with a broker dealer license. So through this company, the Bank will be able to offer its clients, in the private sector, the ability to purchase a range of ETFs from their mobile phone," he explained, noting that "it is an app that we believe has potential."
Asked whether the Bank has set a specific capital for potential acquisitions in the Greek market, Nicolaou clarified that "we have not set a specific amount for acquisitions, either for Greece or for Cyprus. Theoretically, all the additional capital is available for potential acquisitions. And I repeat, all the criteria that we have set must be met."
Asked to say whether the Bank is considering any new acquisitions and when there will -possibly- be announcements, the CEO of Bank of Cyprus stressed that there is nothing to announce at this time and that if there is any new move, it will be announced at the appropriate time.
Competition from Greek banks
Asked, moreover, whether the Bank of Cyprus is concerned about competition with Greek banks, and specifically with Eurobank and Alpha Bank, which have strengthened their presence in Cyprus, Nicolaou said, "I am more concerned about competition with technology companies and not from traditional banks."
"Bank of Cyprus has a model that combines the offer of many products via mobile, where someone can get an insurance product, secure a credit or debit card, apply for a mortgage or car loan, as well as a personal loan, while now you will also be able to buy ETFs through Wealthyhood. So we have a complete model," he concluded.
Also read: Panicos Nicolaou: The importance of investing in Wealthyhood - "It's an app with potential"
(Source: InBusinessNews)
