Hellenic Bank’s Strategic Takeover in the Insurance Market
In a bold move that is set to reshape the insurance landscape, Hellenic Bank has announced a significant acquisition that will propel it to a leading position in the insurance market. The €182 million takeover of CNP Cyprus Insurance Holdings Limited will not only enhance Hellenic Bank’s market share but also consolidate its presence in both life and general insurance sectors.
The acquisition will catapult Hellenic Bank to a commanding 30% share of the life insurance market and a 23% stake in the general insurance industry. This strategic move positions the bank ahead of its main competitor, Bank of Cyprus, which currently holds a 27% share in life insurance through EuroLife and 14% in general insurance with Genikes Asfaleies.
Reflecting on the past, this takeover echoes the once-dominant duo of Bank of Cyprus and Laiki Popular Bank, which led the banking and insurance industries through their respective subsidiaries. The collapse of Laiki Popular during the 2012-2013 banking crisis led to a reshuffling of assets, with Bank of Cyprus taking on the burden of Laiki’s insurance operations.
The French parent company CNP Assurances S.A. had previously acquired Bank of Cyprus’s stake in CNP Cyprus, making it a fully owned subsidiary. However, with CNP Assurances contemplating an exit from the relatively small Cypriot market, Hellenic Bank seized the opportunity to expand its insurance footprint.
After considering various growth strategies, Hellenic Bank opted for the takeover, which aligns with its need to diversify in bancassurance amidst Eurobank SA’s acquisition. The deal is expected to be finalized by the first quarter of 2025, subject to regulatory approvals.
Antonis Rouvas, Interim CEO of Hellenic Bank, expressed optimism about the merger, highlighting the potential for growth and the aim to combine expertise to enhance services and expand product offerings.
The transaction is expected to create revenue synergies, improving insurance income and the overall profitability quality of the bank. With a strong capital adequacy ratio, Hellenic Bank remains well above regulatory requirements even after the acquisition.
As the transaction progresses towards completion, all existing operations of CNP Cyprialife and CNP Asfalistiki, as well as Hellenic Life Insurance and Pancyprian Insurance, will continue autonomously. Customer contracts remain unaffected, ensuring stability for clients during this transition period.
Hellenic Bank has engaged BNP Paribas for M&A advice, Ioannides Demetriou LLC for legal counsel, Cronje & Yiannas Actuaries and Consultants for actuarial insights, and Deloitte for financial expertise to ensure a smooth and strategic acquisition process.
