Cypriot lender Hellenic Bank has signed an agreement to acquire insurance provider CNP Cyprus, according to an announcement made by the bank on Wednesday.

The announcement stated that the consultation between CNP Assurances and its European Works Council has been completed, paving the way for the acquisition to reach a conclusion.

The acquisition, subject to regulatory approvals, including from the Commission for the Protection of Competition, will see Hellenic Bank acquire CNP Cyprus Insurance Holdings Limited.

This holding company operates in both Cyprus and Greece and includes subsidiaries such as CNP Cyprialife Limited, CNP Asfalistiki Limited, CNP Zois, and CNP Cyprus Properties Ltd.

What is more, the announcement highlighted that the subsidiaries of CNP Cyprus Insurance Holdings Limited hold a leading position in the insurance sector in Cyprus.

This transaction will enable Hellenic Bank to further strengthen its insurance operations, establishing it as a top financial group with a strong presence in both the financial and insurance sectors in Cyprus.

The bank also said that this transaction is complementary to its business model, offering significant growth opportunities and enhancing the range of products and services provided to its broad customer base.

Upon completion of the transaction, which is expected to take place by the first quarter of 2025, Hellenic Bank will hold a leading position in the Cypriot insurance market, with market shares of approximately 30 per cent in life insurance and 23 per cent in general insurance.

For now, the existing operations of the involved companies will remain unchanged, and the companies will continue to operate independently until the transaction is finalised.

Interim Chief Executive Officer Antonis Rouvas said that “the transaction strengthens the Group and fits perfectly with our business model, offering significant growth opportunities”.

“Our goal is to combine the strengths, expertise, and valuable experiences of each staff member to modernise and upgrade our services, and to expand our range of insurance products, meeting our customers’ needs,” he added.

According to the latest data from the Cyprus Insurance Companies Association for the first quarter of 2024, CNP Cyprialife holds the second-largest market share in the life insurance sector at 23.7 per cent, with premiums amounting to €40.9 million, up from 22.4 per cent last year.

In the general insurance sector, CNP holds a market share of 10.7 per cent (€16.8 million), down from 11.3 per cent in the first quarter of 2023.

It should be noted that this acquisition has previously been welcomed by rating agencies as well. Earlier this month, Fitch Ratings explained that although fee diversification from activities and insurance operations is limited, this is expected to improve following the acquisition of CNP Assurances SA’s Cypriot and Greek operations.

Additionally, rating agency Moody’s in April of this year positively assessed Hellenic Bank’s plan to acquire CNP Insurance operations in Cyprus and Greece, citing enhanced network strength and diversified revenue streams.

“The potential acquisition will strengthen the broader activities of Hellenic Bank,” Moody’s stated at the time.