Piraeus Financial Holdings (BOPr.AT), one of Greece’s four largest banks, has entered exclusive negotiations with private equity firm CVC Capital Partners (CVC.AS) to acquire a 70% stake in Ethniki Insurance. The proposed deal, valued at €469 million ($485.84 million), marks a significant move for Piraeus as it seeks to strengthen its position in the Greek financial sector.
Piraeus CEO Christos Megalou recently stated that the acquisition of Ethniki Insurance, Greece’s second-largest insurer, would be instrumental in increasing the bank’s fee revenues to 30% from the current 20%. The deal underscores Piraeus’ strategy of diversifying income streams beyond traditional banking activities and into the growing insurance market.
“We agreed to proceed with exclusive discussions regarding the potential acquisition by Piraeus of a 70% stake in Ethniki Insurance for €469 million,” the bank confirmed in a stock exchange filing.
CEO, Piraeus Bank
Strategic Move in the Greek Financial Sector
CVC Capital Partners, a leading global private equity firm managing assets worth €191 billion, originally acquired a 90% stake in Ethniki Insurance from National Bank of Greece (NBGr.AT) in 2021. The remaining 10% of the insurer is still held by National Bank, though it is unclear whether it will be impacted by the current deal.
Greek banks have been gradually returning to normal operations following the economic crisis that led to their nationalisation in the aftermath of the 2009 financial meltdown. After undergoing three recapitalisations, the country’s major banks have managed to significantly reduce their bad loan ratios, achieve sustainable profitability, and receive approval from the European Central Bank (ECB) to resume dividend payments for the first time in 16 years.
Piraeus’ Growth and Future Plans
Having completed its full privatisation in 2023, Piraeus Bank has set ambitious financial targets. It projects a net profit of €1 billion for 2024 and plans to distribute 35% of its earnings to shareholders. The potential Ethniki acquisition aligns with its broader strategy of expanding its presence in the insurance sector and bolstering non-interest revenue.
For this transaction, Piraeus has engaged UBS as its financial adviser and Milliman as its actuarial consultant to conduct due diligence and assess the strategic value of Ethniki Insurance.
If the deal goes through, it will represent one of the most significant transactions in the Greek banking and insurance markets in recent years, further consolidating Piraeus’ position as a key player in the country’s financial landscape.
($1 = €0.9653)
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