Eurobank CEO announces plans to make Cyprus an EU gateway for India and the Middle East

Eurobank Group has grand plans for Cyprus once it officially acquires its majority stake (55.3%) in Hellenic Bank, that are expected further boost the island’s standing on the global investment map.

More specifically, once the €800m deal is finalised, Eurobank has a mid- to long-term plan in place to turn Cyprus into a gateway between Europe and businesses from India and the Middle East that wish to become active in the EU region.

Opening the door to businesses from India and the Middle East

In a meeting with Cypriot journalists in Athens on 10-12 March, Eurobank Group CEO Fokion Karavias presented the bank’s plans for the next few years, the highlight being plans to bring businesses to Cyprus from India and the Middle East that wish to become active in the European Union.

With economic forecasts for extremely strong growth rates in India and the Middle East in the coming years, Eurobank has already started developing operations and collaborations in the two economies. And Cyprus is high up on the group’s agenda to help materialise these plans.

“Under the strategy we are designing and wish to implement, we believe that Cyprus can become the base for developing our operations and cooperation, as a group, with the dynamic economies of the Middle East and India,” said Karavias. “These are economies that in the next few years, the next decades, are expected to have very strong growth rates,” he said, adding that the aim was to turn Cyprus into the gateway for companies from the two countries to Europe.

Rep office opening in Bombay

As part of these plans, Eurobank is currently in the process of opening a rep office in Bombay, which will be headed by Eurobank Cyprus’ CEO Michalis Louis and will promote the group’s strategy.

To this end, Louis and Eurobank’s COO Stavros Ioannou visited Saudi Arabia and the United Arab Emirates recently, where they held significant contacts.

The MoU with NPCI International

Meanwhile, Karavias recently accompanied Greek PM Kyriakos Mitsotakis on a recent visit to India, during which important agreements were signed and new opportunities were identified to further enrich the two countries’ bilateral ties.

Regarding Eurobank specifically, an MoU was signed with NPCI International aimed at creating a strategic alliance in the field of international incoming remittances

According to Karavias, the cooperation with NPCI International is fully aligned with Eurobank’s commitment to become the bank of choice for Indian businesses seeking to establish offices in Greece or Cyprus, and launch operations in Europe.

As he said, it is extremely important that the effort is being backed by the Greek and Cypriot governments, while Brexit has also helped as Indian and Middle Eastern companies are now seeking out other locations for their headquarters so as to continue their European operations.

“We have the advantage that our main shareholder, Prem Watsa, who is the founder and CEO of Fairfax Financial Holdings, is Indian,” Karavias pointed out. “Fairfax has created a subsidiary, Fairfax India, with many billions in investments in India. Hence, this gives us the ability to have a certain access through our main shareholder.”

He added, “This is not an easy effort, but importantly, what’s pushing us to proceed is that there is a will on the level of governments to develop this cooperation. Therefore, it is something that we will invest in in the coming years and we are very optimistic about the outcome”.

Cyprus’ role and its advantages

Referring to Cyprus’ advantages in terms of attracting businesses from India and the Middle East, Karavias highlighted the island’s geographical proximity to them. Also, he said, Indian and Middle Eastern businesses use the English business language. Another factor is that India and Cyprus are both Commonwealth Countries.

He emphasised the fact that Cyprus’ corporate law is essentially the same as that of India, which he said was a very important advantage, while there is also a double taxation avoidance agreement in place.

“Cyprus has very significant infrastructure of professional services, it has the expertise on how to host foreign businesses, while the country now has a strong banking system that is supervised directly by the European Central Bank – which is very important in the eyes of foreigners – that can meet and serve the needs of foreign companies,” said Karavias. “Even if we manage to bring a small percentage of these companies to Cyprus, it will be hugely beneficial for the country’s economy.”

The main targets for the next three years

Referring to Eurobank’s general plans for 2024, as well as its three-year plan for 2024-2026, where he said Hellenic Bank will have a central role, Karavias said the bank’s aim is to maintain its high performance but with the addition of a downward trend in interest rates, which he expects to begin by June the latest.

He said the aim was to take advantage of the favourable macroeconomic environment in the Eurozone. “And in Greece and Cyprus and Bulgaria, the growth of the economy, the increase in GDP is expected to be multiple times the average growth in the Eurozone," he pointed out.

Eurobank also plans to start paying out dividends from its 2023 profits this year, for the first time since 2008, with Karavias reiterating the bank’s commitment to return 25% of its 2023 profits. "And to achieve a return on equity in 2024 of 15%, which is internationally considered very satisfactory for banks in Europe."