According to the signed agreement, the transaction amount is €600 million in cash, based on a 100% participation.
The transaction is expected to further diversify Piraeus Bank's revenue streams, enhancing value creation for shareholders, while complementing its product range by covering the full spectrum of banking, insurance, and investment customer solutions.
The transaction increases Earnings per Share by approximately 5% and the Return on Tangible Equity by approximately one percentage point. It also boosts fee generation to levels comparable to the international market, while maintaining competitiveness in operational cost efficiency.
Based on the above and assuming an annual dividend distribution of 50% of profits from 2025 onwards, Piraeus Bank's proforma total capital position is estimated at approximately 18.5% for 2025, expected to reach around 19.5% by 2027 and approximately 20% by 2028. This impact translates into a capital adequacy ratio with a safe buffer above the Pillar 2 requirement of about 250 basis points in 2025, which is expected to exceed 300 basis points by 2027 and approach 400 basis points by 2028. Throughout this period, Piraeus Bank's CET1 ratio is expected to remain above 13%.
Piraeus intends to achieve classification as a Financial Conglomerate (FICO) and pursue the application of the supervisory mechanism under Article 49 of the CRR regulation regarding the supervisory treatment of its intended participation in the share capital of Ethniki Insurance (commonly referred to as the Danish Compromise). If achieved, this will further enhance the CET1 capital ratio by approximately 50 basis points.
Ethniki Insurance is a leading insurance company in Greece, offering a full range of insurance products, with a market share of approximately 14.5% (about 17% in life insurance and about 11% in non-life insurance), and over €0.8 billion in Gross Written Premiums (GWP) in 2024.
Ethniki Insurance has total assets of €4 billion and equity of €0.4 billion in 2023. The company recorded pre-tax adjusted profits of approximately €100 million in 2023 (latest available figures).
Ethniki Insurance’s network extends throughout Greece, comprising owned sales offices, corporate network insurance agents, as well as collaborating insurance agencies and brokers. The majority of the company's Gross Written Premiums are produced through these channels, with the remainder derived from bancassurance activities.
Piraeus Bank’s targets for the period up to 2028, as announced earlier this year to the market, have been upgraded, taking into account the expected impact of the transaction, as follows:
The transaction is subject to the approval of the relevant supervisory authorities.
Piraeus' advisors for the transaction are UBS Europe SE as exclusive financial advisor, Milliman as actuarial advisor, and the law firms Milbank LLP, Moratis Passas, and Potamitis Vekris as international, local legal advisors, and legal advisors on competition matters, respectively.
