Eurobank to become Hellenic Bank main shareholder

Eurobank on Thursday said that it has increased its stake in Hellenic Bank to 26 per cent, having now made an agreement for the acquisition of a 13.4 per cent share that currently belongs to video game company Wargaming, with the agreement pending regulatory approval.

Following the acquisition, Eurobank has now become Hellenic Bank’s majority shareholder, further expanding the bank’s involvement in the Cypriot banking sector. Eurobank also operates its own wholly-owned subsidiary on the island.

As of July 2021, Eurobank owned 12.6 per cent of Hellenic Bank and if the agreement made with Wargaming to acquire the latter company’s 13.5 per cent share is approved by the supervisory authorities in Frankfurt, then it will drastically alter the landscape in the Cypriot bank’s ownership structure.

According to media reports, the agreement between Eurobank and Wargaming is subject to approval, meaning that the supervisory authorities will examine the entire structure of the agreement before accepting or blocking it.

It should be noted that as Cyprus’ second largest bank, Hellenic Bank is designated as a systemic bank, something that will undoubtedly factor into any decision.

However, as reported by local sources, the possibility of rejecting Eurobank’s potential share increase is remote, since Eurobank is likely to have already done its due diligence and explored the viability of such a move beforehand.

The Eurobank Group had originally acquired a 9.9 per cent stake in Hellenic Bank in July 2021, corresponding to 40,800,000 shares.

Shortly after, Eurobank increased its share capital to 12.6 per cent, after an agreement was made with investment fund Third Point Hellenic Recovery Fund for the acquisition of an additional share of 2.7 per cent.

In reference to the above share increases, Fokion Karavias, the Chief Executive Officer of Eurobank, had previously stated that “this is a move of strategic importance, as this major investment action by Eurobank will not be opportunistic, it will in fact have depth and continuity”.

The management of Eurobank in Athens considers that Hellenic Bank, which is active in private and corporate banking and international banking, is aligned with the group’s strategy, as it seeks to strengthen its presence in key markets in which it maintains a strategic interest.

According to media reports, the Eurobank Group considers Hellenic Bank, with its management, capital structure and loyal customer base, to be in a prime position to capitalise on the prospects that exist in the market and make the most of any future opportunities.

In addition, this latest development is not expected to disrupt Hellenic Bank’s management or staff, while the existing administrative structure of the bank is likely to remain as is.

Demetra Holdings, which was marginally the largest shareholder of Hellenic Bank, will now become the second largest shareholder with a share of 21.02 per cent.

The third largest Hellenic Bank shareholder is investment fund Poppy Sarl with 17.3 per cent, followed by Wargaming with 7.2 per cent and investment fund Senvest with 5.07 per cent.