September will be a month of milestones for Cyprus' largest banks

The month of September will be a month of pivotal milestones for the country’s two largest banks, Bank of Cyprus and Hellenic Bank, creating even greater prospects for their future course.

The two banks have long had a developmental trajectory based on their sound foundations, as a result of the business models they have been implementing for years.

It is recalled that both the Bank of Cyprus and Hellenic Bank achieved increased profitability in the first half of the year, €270 million and €189 million respectively, strongly indicating and confirming through their performances the beyond any doubt correctness of the strategic direction they are following.

Based on this and what is coming next for the two banks, within September Hellenic Bank’s annual general meeting will be taking place on the 18th, sealing the bank’s transition to its Eurobank era.

For the Bank of Cyprus, its extraordinary general meeting will take place on 13 September in order to ratify the Board’s decision to exit the London Stock Exchange and return after many years to the Athens Stock Exchange.

Hellenic in Eurobank era

As far as Hellenic is concerned, after the successful completion of Eurobank's public offering through which it acquired almost 56% (55.9%) of the bank's share capital and at the same time absolute control in terms of share composition, the upcoming AGM is expected to give the banking giant from Greece control at the level of the Board of Directors, thus allowing Eurobank to put its strategic plans for the second largest bank of our island on track.

It is recalled in this regard that Eurobank has already nominated a total of seven candidates for the office of Hellenic's board of directors, while Stephen Joh Albutt (as an independent non-executive director) has been nominated for reelection after first appointed to the Bank's board of directors in September 2016.

These are:

• Michalis Louis
• Oliver Bernard Ellingham
• Robert Anastassis Kyprianou
• Charalambos Constantinou
• Maria Charalambous
• Sofroni Clerides, and
• Kenneth Howard Prince-Wright

With regard to the position of CEO of Hellenic, it must be considered "locked" and it is the assumption of it by the current CEO of Eurobank Cyprus Michalis Louis, with Antonis Rouvas, who as is known currently serves Hellenic as interim chief executive officer, to returns to his duties as chief financial officer.

The agenda of the Hellenic Bank general assembly includes the following:

• Study and approval of the management report for the year ended December 31, 2023.
• Study and approval of the financial statements and the auditors' report for the year ended December 31, 2023.
• Approval of the remuneration policy report for the year 2023 and determination of the remuneration of the board members.
• Re-appointment of auditors and authorization of the board of directors to determine their remuneration.
• Election of the Board of Directors.

Bank of Cyprus on the Athens Stock Exchange

Having come to the conclusion that the listing on the Athens Stock Exchange, combined with the delisting from the London Stock Exchange, will bring a number of long-term strategic benefits - both for the company and for the shareholders - and will strengthen the Group's presence in the markets, the Board of Directors of the Bank of Cyprus proceeded with the decision in question, which it will put before the shareholders for ratification at the extraordinary general meeting on the 13th of the month.

The benefits that the Board of Directors of the Bank of Cyprus sees from an exit from the London Stock Exchange and listing on the Athens Stock Exchange were listed and analysed by the chairman of the Board of Directors, Efstratios-Georgios Arapoglou, in his recent letter to the shareholders,calling them at the same time to vote in favour of the two resolutions that will be put up for approval.

Specifically, these benefits, according to what was mentioned in Arapoglou's letter, concern, among others, the following:

First: A more focused market system - The Board of Directors believes that the Athens Stock Exchange is the most appropriate market for the company, as it is already focused on regional banks and other companies active in the Greek and Cypriot markets, factors that act as complementary to the company.

Second: Inclusion in Indices - Although the listing and delisting are expected to result in the company ceasing to be eligible for certain UK equity indices, the Board expects that, over time, it will qualify for to become eligible for inclusion in other stock indices.

Third: Peer Bank Comparison - Some regional banks operating in Greece and Cyprus are already listed on the Athens Stock Exchange. The board considers them to be peer banks of the company and listing the company on the ASE will facilitate, in its view, a more direct comparison of the company's performance and other valuation metrics against this group of banks.

Fourth: Long-term Institutional Shareholders- Trading in the more centralized Athens Stock Exchance market system, potential indexation and increased ability to compare banks to peers, has the potential to attract long-term institutional shareholders who are already invested in Athens Stock Exchange-listed companies to the Bank.

"Given these potential benefits, the board believes that the listing and delisting have the potential to increase the liquidity of the ordinary shares and/or enhance the Group's visibility in the market for the benefit of shareholders and the company," it was further underlined in Arapoglou’s letter to the shareholders of the Bank of Cyprus.

The two resolutions before the shareholders

It is noted that for the ratification of the decision of the Board of Directors through the relevant resolution ("Resolution 1"), the approval of more than 50% of the votes of the shareholders who vote, either in person or through a proxy at the EGM, is required.

At the same time, a second resolution will be proposed to the shareholders to consider and, if deemed appropriate, to approve the adoption of an amended bylaws of the company with effect from the convergence of the EGM in relation to the Introduction ("Resolution 2").

It is pointed out that Resolution 2 is a special resolution and requires the approval of at least 75% of the shareholders who vote, either in person or by proxy at the EGM.

The listing and delisting will not proceed if Resolution 1 is not approved and may not proceed if Resolution 2 is not approved, in each case, by the requisite majority of shareholders at the meeting.

(Source: InBusinessNews)