Competition watchdog greenlights Eurobank-Hellenic deal

Eurobank SA is on its way to completing a €700m investment in Hellenic Bank, in a deal that is set to seriously boost the country’s banking sector but also the broader economy.

Last week, the Commission for the Protection of Competition (CPC) greenlit Eurobank’s proposition to acquire a majority stake in Hellenic Bank, saying it was in line with market competition rules.

The move is being welcomed as a vote of confidence, not just in Hellenic Bank but also the island’s banking system and economy, which is being highlighted as a capable host of such large-scale foreign investment.

As for Hellenic Bank (HB), the fact alone that a European financial organisation - one of the largest in Southeast Europe - with assets in excess of €80b and whose main shareholder is the global investment giant Fairfax Financial Holdings, is affirmation of its sound and resilient business model.

HB has been performing well in recent years, recording profits and enjoying successive upgrades by international rating agencies. It has long been on a profitable and sustainable track, which has prompted it to explore a return to paying out dividends to its shareholders, provided it is granted the required regulatory approval.

Coming under the umbrella of such a strong financial group like Eurobank is another step in the right direction for HB, opening up more opportunities and prospects. It also ensures immediate and effective reaction to future threats in the unstable and unpredictable global financial environment.

The Eurobank group has a presence in Greece, Cyprus, Luxemburg, Bulgaria and the UK. On 30 September 2023, it counted €80.5b in total assets, 540 service points in Greece and abroad, and 10,468 employees, operating in a wide range of financial services, such as: retail and corporate banking, investment banking, wealth and capital management, treasury management and capital markets services, leasing, business receivables management, brokerage services, real estate services.

With a subsidiary listed on the Athens Stock Exchange – Eurobank Holdings which owns 100% of shares in Eurobank SA – the Eurobank group consists of the bank Eurobank SA and its subsidiaries, one of which is Eurobank Cyprus.

With an impressive growth rate, and having demonstrated healthy profitability with a strong capital base and liquidity since 2007 when it started its activities, Eurobank Cyprus currently operates a network of eight banks in all of the island’s main cities.

Eurobank Cyprus is mainly active in Wholesale Banking, more specifically: Corporate Banking, Wealth Management Banking for local and foreign High Net Worth Individuals, International Business Banking, Global Markets, Affluent Banking.

The shareholding composition of Eurobank Holdings

The main shareholders of Eurobank Holdings and by extension the Eurobank group and Eurobank SA, are international institutional investors, while the group’s shareholding composition has a dispersion that ensures its efficient operation.

Its main shareholder, as mentioned above, is the global investment giant Fairfax Financial Holdings, which owns 32.93% of its share capital.

In particular, the percentages of voting rights on the common shares of Eurobank Holdings on 29 December 2023 were structured as follows:

Fairfax Financial Holding Limited: 32.93%

The Capital Group Companies (CGC): 5.05%

Helikon Investments Limited: 5.00%

Other foreign institutional investors: 47.73%

Domestic institutional investors: 4.07%

Non-institutional investors (other legal entities and private investors): 5.22%