Eurobank edges closer to Hellenic takeover

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Greece’s Eurobank is reportedly preparing a strategic roadmap to takeover Hellenic Bank, the island’s second-biggest lender, just months after increasing its stake to over 29%.

Once it reaches the 30% benchmark, according to the law on acquisitions, Eurobank must make a public offer to take over Hellenic.

According to sources close to the Greek bank, quoted by news site Stockwatch, the move is not only on the cards but close to materialising, even without further increase of Eurobank’s stake.

The same sources say the move should be expected sometime in Autumn.

Financial circles in Athens are buzzing with rumours that Eurobank, owning 29.2% of Hellenic, is planning the bank takeover with the help of minor stakeholders.

A takeover proposal must be approved by an extraordinary general assembly of stockholders.

For the first time, Eurobank had included Hellenic Bank in its financial results, listing it as a related company, boosting its profits for the first half of 2023.

Eurobank Cyprus posted soaring profitability after tax, with net profits approaching the profitability of the full year 2022 (€94.3 mln) due to rising interest rates and the high remuneration of its liquidity held at the ECB.

The subsidiary of Greek Eurobank SA said in a statement that profit after tax for the first half of 2023 amounted to €90.8 mln, increasing by €53.6 mln or 144% compared with the first half of last year.

Eurobank’s CEO, Fokionos Karavia, referred to the bank’s investment in Hellenic as an example of the group’s investment plans in Cyprus and Bulgaria.

Eurobank Cyprus has a strong presence in corporate, private banking and bank assurance, while Hellenic Bank is the island’s second-largest lender in retail banking.

Eurobank, the third largest banking institution, joined Hellenic’s shareholders in June 2021, when they bought the 12.6% share from fund managers Third Point Hellenic Recovery Fund.

Later, they made a deal with Wargaming for their 13.4% share of the bank’s capital at the end of November.

Eurobank became Hellenic Bank’s major shareholder after acquiring another 3.2%, essentially buying out Senvest Management LLC earlier this year for €16.74 mln.

It is the largest shareholder of Hellenic Bank. It is followed by the investment company Dimitra and Logicom, which collectively hold around 25%.

Pimco retains 17.3%, while Wargaming has reduced its holding in Hellenic’s equity to 6.8%.

The investment fund Senvest also maintained a very small percentage, as financial analysts say that the investment fund is looking to capitalise from an imminent takeover of Hellenic by Eurobank.