Hellenic Bank enters into €182 m agreement with CNP Assurances on CNP Cyprus Insurance Holdings

Hellenic Bank Public Company Limited has announced that it has entered into exclusive negotiations and a put option with CNP Assurances for the acquisition of its subsidiary CNP Cyprus Insurance Holdings Limited, which operates in Cyprus and Greece and consists of amongst others: CNP Cyprialife Ltd, CNP Asfalistiki Ltd, CNP Zois SA and CNP Cyprus Properties Ltd.

According to the Bank's official announcement on the action, "Under the put option, CNP Assurances has the option to sell and Hellenic Bank is irrevocably committed to acquire CNP Cyprus Insurance Holdings if such option is exercised."

The announcement continued, "In accordance with the French law, the next step will be the information and consultation of CNP Assurances’ European works council. The Transaction would then be subject to regulatory approvals (including by the Commission for the Protection of Competition) and it is expected to be completed by Q1 2025.

CNP Cyprus Insurance Holdings Limited is a leading insurance operator in Cyprus. It offers life and general insurance products and services through the largest network of independent agents in the country. During 2023, it had c. 330 employees and generated €236 mn of gross premiums with market shares of c.24% and c.15% in life and general insurance, respectively."

According to the same announcement, the Transaction is expected to be a significant milestone for growing and further strengthening the Bank’s insurance operations, enriching the products and choices offered to an enlarged customer base. Upon the completion of the Transaction, the Bank is expected to have a leading position in the insurance market in Cyprus, with market shares of c.30% and c.23% in life and general insurance, respectively.

"The total consideration is expected to be €182 mn, representing a price to book value ratio of 1x (P/BV) with an estimated capital impact of c.2,6 percentage points. Taking into account the Bank’s strong capital position with a total capital adequacy ratio of 28,4% at 31 December 2023, the pro-forma capital adequacy ratio is expected at c.25,8%, upon completion, well above the minimum regulatory requirements. Furthermore, the Transaction is expected to strengthen the Bank’s position in the insurance market and to create revenue synergy opportunities, thereby increasing the insurance income and enhancing the quality of the Bank’s profitability," the announcement said.

Also according to the Group's statement, at the current stage, the existing operations of the involved companies remain as is and the companies will continue to operate autonomously and independently. The insurance contracts of the insurance companies, CNP Cyprialife and CNP Asfalistiki, as well as Hellenic Life Insurance and Pancyprian Insurance remain in effect and the benefits, rights and obligations of customers are not affected.

The Bank’s Interim Chief Executive Officer, Antonis Rouvas, commented, “With this Transaction, the Bank will significantly strengthen its insurance operations and become a leading financial services group with strong presence in the banking and insurance sectors in Cyprus. We are excited for the Transaction that would be complementary to our business model and will offer significant growth potential. We aspire to combine the strengths, the know-how and valuable experiences of all staff of CNP Cyprialife, CNP Asfalistiki, Hellenic Life Insurance and Pancyprian Insurance to modernise and upgrade our services and to expand our insurance product range to meet our customers’ needs and offer upgraded service to the market.”

"The Bank has been advised by BNP Paribas on M&A, Ioannides Demetriou LLC on the legal matters, Cronje & Yiannas Actuaries and Consultants Ltd on the actuarial and HR matters and Deloitte Ltd on financial and accounting matters. To the extent required by applicable laws and regulations, the Bank will keep the investors informed of any developments on this matter," the statement concluded.