CBC Governor: Banks showing increased interest in securing licences in Cyprus

An increasing number of banks have been showing an interest in securing a licence in Cyprus lately, according to Central Bank of Cyprus (CBC) Governor Christodoulos Patsalides.

He stressed, however, that while new banks are always welcome, they will need to meet certain key criteria.

He was addressing a press conference in Nicosia, where he was asked to comment on the interest being shown, particularly by fintechs, to secure banking licences, and whether there were plans to issue more licences to increase competition.

“There are indeed applications and this is common,” said Patsalides. “Any new banks in Cyprus, provided there is interest and provided they are serious banks that meet the regulatory criteria and have a plan in place that is sustainable, are welcome,” he added. “And so we are more than open to attracting banks. It is something we actively encourage.”

At the same time, however, he added that the focus is only on banks with serious business plans.

He also explained: “In reality, experience has shown that Cyprus is too small to attract a large number of banks… We haven’t seen an interest from big banks abroad to open in Cyprus, precisely because our economy is too small.”

Hellenic Bank’s acquisition by Eurobank

Patsalides was also asked about the recent acquisition of Hellenic Bank by Eurobank, and whether he expects this to affect competition and have a positive impact on the economy. The CBC Governor said: “The application by Eurobank has been approved by the Central Bank of Cyprus, the Single Supervisory Mechanism and the European Central Bank, and from what I am aware, it is proceeding with its plans. The competent authority for competition matters is the Commission for the Protection of Competition, which has also approved this application. However, regardless of this, I would like to say that we, as Central Bank, see Eurobank’s application as a positive development.”

He elaborated, “We believe that it will boost competition. We know it is a bank of considerable scope; a bank that is supervised by the Single Supervisory Mechanism and we do not see, per se, any problem or reason that will make us look at it negatively. We have talked with them, we have looked at certain other matters, so as to protect the Cyprus economy; but beyond this, like I said, we have approved Eurobank’s application and therefore we agree with it”.