Eurobank has announced that the acquisition of up to 100% of the issued share capital of Hellenic Bank Public Company Limited was completed on 30 July 2024.

It says that "Eurobank S.A. (the “Offeror”), a subsidiary of Eurobank Ergasias Services and Holdings S.A., informs the investment community, pursuant to Article 38 of the Takeover Bids Law of 2007 to 2022 (the “Law”), that the procedure for the acceptance of the mandatory Takeover Bid (the “Takeover Bid”) for the acquisition of up to 100% of the issued share capital of Hellenic Bank Public Company Limited (“Hellenic Bank”, or “Target Company”) submitted on 4 June 2024 was completed on 30 July 2024".

On 4 June 2024, the date of the announcement of the Offeror’s submission of the mandatory Takeover Bid, the Offeror directly held 228,253,661 shares of Hellenic Bank, representing 55.29% of the total issued share capital of Hellenic Bank. No shares were held by any persons considered by the Law as acting in concert with the Offeror, and there were no indirect holdings related to the Offeror, it says.

During the period of the Takeover Bid, from 4 June 2024 to 30 July 2024, the Offeror acquired 776,364 additional shares, representing 0.19% of the issued share capital of the Target Company, at the price of €2.56 per share through purchases made during trading sessions. Of these, 31,959 shares (0.01% of the issued share capital) were held by investment funds managed by Senvest Management LLC.

Based on the preliminary results, the total acceptance rate of the Takeover Bid reached 0,405%, as Acceptance and Transfer Forms were submitted for 1,670,975 shares of the Target Company.

It says that the total acceptance rate, combined with the 55.481% (229,030,025 shares) directly held by the Offeror at the expiry of the Takeover Bid on 30 July 2024, provides the Offeror with a total direct participation of 55,886% (230,701,000 shares) in the issued share capital of the Target Company. It is noted that the final acceptance rate may change in the case that during the final review of the Acceptance and Transfer Forms, and the accompanying required documents, it is found that data is missing or erroneous, and therefore, cannot be accepted.

According to the terms of the Takeover Bid and pursuant to the provisions of Article 10(1) of the Law, since the Offeror held more than 50% of the voting rights of the Target Company, the Takeover Bid is considered successful.

Axia Ventures Group and The Cyprus Investment and Securities Corporation Limited (“CISCO”) are acting as advisors to the Offeror in connection with the Takeover Bid. Additionally, CISCO is acting as the Underwriter Operator pursuant to the provisions of RAA 96/2008 (as amended) of the Cyprus Stock Exchange, the press release ends.

Eurobank's CEO: Eurobank-Hellenic Bank merger remains ultimate goal

The merger of Eurobank and Hellenic Bank remains the ultimate goal, Fokion Karavias, CEO of Eurobank Holdings, said at a press conference where he presented the group's results for the first semester of 2024 on Wednesday, noting that the timeline for achieving this goal does not depend solely on Eurobank, but also on the minority shareholders.

The acquisition of Hellenic Bank's share capital was at the centre of the discussion of Eurobank's financial results. Following the completion of the mandatory tender offer to acquire up to 100% of the issued share capital of Hellenic Bank, Eurobank's total direct stake amounts to 55.886%.

"We became majority shareholder in Hellenic Bank with 55.9% stake, paving the way for full consolidation, which will create a regional banking group with €100bn balance sheet", Eurobank's CEO said at his presentation.

Asked about what the next steps will be regarding Hellenic Bank, he said that "having completed the mandatory tender offer and having secured a majority shareholding, the next step is the board of directors, which is going to be elected by the next shareholders meeting to appoint the new management." He added that in the foreseeable future, the two banks will operate as separate entities. "This is fine as their business models are quite complementary", he said.

Answering to a question regarding the synergies planned with Hellenic Bank, Karavias said that this is something they will begin planning as soon as the new management is in place. He noted that synergies are possible to various fields, like higher net interest income through higher loan balances, synergies in term of fees and commission income, noting the opportunity through the integration of CNP, operational expenses rationalisation and reducing the MREL related cost of Hellenic Bank. However, he noted that a full business plan for Hellenic Bank will be presented in the full-year 2024 financial results, and will be also included in the 2025-2027 group business plan. "We will give quantitative targets about the realisation of synergies", he said.

Asked regarding Eurobank's plans to acquire further share capital in Hellenic, he noted that "the merger of Eurobank and Hellenic Bank remains the ultimate target, we are confident that this will happen with time. However, the exact timeline does not depend only on us, but on the minority shareholders as well".

Financial results for first semester 2024

“For the first time since 2007, the bank distributed dividends to its shareholders. After more than ten years, Eurobank regained investment grade status by two rating agencies, Moody’s and DBRS", Karavias said during his presentation. He added that the bank maintains a systemic presence and plays a pivotal role in each of its three key markets: Greece, Cyprus, and Bulgaria.

Noting the favorable macroeconomic environment, he noted that the Group is on track to reach or exceed the ambitious targets it has set for the year, since there is a noticeable uptick in loan requests, faster deposit gathering and flow in assets under management higher than anticipated.

Eurobank produced another solid set of results in the first half. EPS amounted to 20 cents, tangible book value per share increased to €2.25, while RoTBV reached 18.5%.

"Indications of a sustained economic climate coupled with our robust results in the first half of the year, have prompted us to an upward revision of the RoTBV target to around 16.5% for the full year", he said.

Specifically, net interest income rose by 8.6% against 1H2023 to €1,132m, driven by loans, bonds and international business. Net interest margin increased by 20 basis points y-o-y to 2.83%.

Net fee and commission income expanded by 4.7% y-o-y in 1H2024 to €283m, mainly due to fees from Network activities and Asset Management, accounting for 71 basis points of total assets.

As a result of the above, core income grew by 7.8% y-o-y to €1,415m. Total operating income increased by 9.7% against 1H2023 to €1,460m.

Operating expenses were down by 1.2% y-o-y in Greece but increased by 3.1% y-o-y at a Group level to €457m, due to SEE operations. However, on a like for like basis (excluding BNP Bulgaria) these were stable. Both the cost to core income ratio and the cost to total income ratio improved further to 32.3% and 31.3% respectively in 1H2024.

Core pre-provision income was up by 10.2% y-o-y to €958m, whereas pre-provision income strengthened by 13.0% compared to 1H2023 to €1,003m.

Loan loss provisions decreased by 12.6% y-o-y to €144m and corresponded to 69 basis points of the average net loans.

As a result of the above, core operating profit before tax rose by 15.5% y-o-y to €814m.

Adjusted net profit rose by 22.2% y-o-y to €732m in 1H2024. Reported net profit reached €721m and includes €99m negative goodwill from stake increase in Hellenic Bank and €101m VES cost in Greece. EPS and the return on tangible book value reached €0.20 and 18.5% respectively in 1H2024.

SEE operations were profitable, as the adjusted net profit increased by 35.5% to €277m, contributing 37.8% to the profitability of the Group. Core pre-provision income grew by 25.3% y-o-y and amounted to €292m, with core operating profit before tax rising by 27.6% y-o-y to €264m in 1H2024. The financial performance both in Cyprus and Bulgaria improved substantially, with the adjusted net profit reaching €176m and €100m respectively in 1H2024.

The NPE ratio fell by 2.1 percentage points y-o-y to 3.1%3. NPE formation was positive by €125m in 1H2024. Provisions over NPEs improved by 20 percentage points y-o-y to 93.2%.

Capital adequacy remained robust, as Total CAD and CET1 ratios reached on a pro-forma basis 19.3% and 16.2% respectively, accounting for the full-consolidation impact of Hellenic Bank and the dividend distribution of €342m.

Tangible book value per share increased by 18.4% y-o-y to €2.25.

Total assets stood at €81.3bn.

Performing loans grew organically by €1.2bn in 1H2024. Total gross loans amounted to €43.4bn, including senior & mezzanine notes of €4.3bn. Corporate loans stood at €25.8bn, mortgages at €9.8bn and consumer loans at €3.6bn.