Aristidis Vourakis: Deutsche Bank considering return to Cyprus

Deutsche Bank, a multinational investment bank and financial services company headquartered in Frankfurt – and Germany’s leading bank – is considering to return to Cyprus, after exiting the local market back in 2016, according to Aristidis Vourakis, President of the Association of Cyprus Banks (ACB) and CEO of AstroBank.

Addressing the ACB’s annual general meeting, Vourakis announced: “With particular satisfaction, I would like to mention that Deutsche Bank, the most active European bank in international payments, is considering returning to Cyprus following the Association’s efforts. It had exited the market in 2016.”

It should be clarified that Deutsche Bank's potential return concerns its possible return as a correspondent bank for the dollar, as it operated as until 2016.

It is recalled that as one of the European banks that holds a license from the Fed for access to dollars, Deutsche Bank has been cooperating with Cypriot banks for years, mainly concerning international transactions based on US dollars.

The German bank's cooperation with the country was generally interrupted in 2016 due to a risk assessment carried out in relation to Cyprus and the issue of money laundering.

Today, and given the spectacular progress that Cypriot banks have made in this field (as recognised by Moneyval , Basel Index , INCS Report, etc.), collaborations with correspondent banks for dollars have increased from one to five and with the prospect of increasing, through a possible return of Deutsche Bank, to six. This is something which, as it has been emphasised, would be a great success.

It is also noted that the contact between the Association of Cyprus Banks and Deutsche Bank took place on the sidelines of meetings within the framework of European Banking Federation works, and continued during the current year.

Vourakis, meanwhile, during ACB's Annual General Meeting, also noted that Deutsche Bank's consideration to return followed another year in 2024 where Cypriot banks actively contributed to pan-European initiatives, showing a strong commitment to sanctions enforcement, enhanced control and compliance systems. This, Vourakis added, is highlighted in the 2024 Moneyval report, as well as by corresponding initiatives led by the government aimed at continually improving Cyprus' international image.

The banker also referred to the merger initiatives currently underway in the banking system, saying these have also accelerated in Cyprus. “Two major mergers among the five largest banks are nearing completion, creating strong institutions with European reach that will open new opportunities for Cypriot businesses and individuals.”

Another contributing factor was that the ESG agenda also made significant progress, with most Cypriot banks having announced clear targets and being prepared for their first disclosures in 2025. “At the same time, Artemis, a company owned by the Association, already offers ESG compliance reporting services to Cypriot businesses,” he explained.

Robust banking sector records profits for second year in a row

The Cypriot banking sector recorded profitability for the second consecutive year, with consolidated profits again exceeding €1b, Vourakis told the AGM. “The Core Tier 1 capital ratio reached 24.5%, comparing favourably to the European average of 16%,” he said.

The Non-Performing Loan (NPL) ratio dropped to 6.2% — still higher than the European average, but, as emphasised, one must not forget the unprecedented crisis Cyprus experienced in 2013 within the European context.

Here Vourakis conceded that the bank profits of the past two years have not offset the losses the bnaks suffered during the 2013 financial crisis.

“Despite the strong progress of the last two years, the effects of the 2013 crisis are still visible in both the banking sector and society,” he pointed out. “The sector's profits for 2023 and 2024 have not yet offset the losses from the 2013 crisis.”

Elsewhere, Vourakis referred to the upcoming retirement of Michalis Kamma, the Director General of the Association of Cyprus Banks, who is stepping down at the end of the year after more than 30 years of service. “With his energy and international experience, he played a decisive role in the evolution of the banking system, contributing to public discourse on sector issues, policymaking, and the development of the Association itself, as well as the founding of Artemis and ACB Auctions,” said AstroBank’s CEO.

According to the President of the Association, succession planning for Kamma’s role has already begun. “Michalis was, for many younger bankers, including myself, a kind of collective memory for the sector’s issues. We will miss him. Michalis, thank you,” Vourakis concluded.