Filenews 28 February 2025
Alpha Bank announced on Thursday evening the binding agreement for the acquisition, in essence, of all the assets and liabilities of the banking activity, as well as the employees of AstroBank, a move that strengthens its position in the market and makes it the third largest systemic bank in Cyprus.
According to the announcement, the acquisition is in line with the Group's strategic goal to strengthen its presence and financial footprint in key markets of interest. With its strong economic outlook and expected real GDP growth outpacing that of the wider euro area, Cyprus is an attractive market for market share growth.
This investment confirms Alpha Bank's long-term commitment to the Cypriot market. As a result of the transaction, Alpha Bank Cyprus is expected to expand significantly, increasing its market share to approximately 10% in terms of total assets, consolidating its position as the third largest bank in Cyprus.
Specifically, Alpha Bank Cyprus is expected to increase its loan portfolio by more than 60%, its deposits by approximately 70%, its total assets by approximately 65% and, taking into account the synergies arising from the transaction, to double its profitability exceeding €100 million per year in recurring net profit.
The transaction is expected to have a limited impact on the Group's CET1 ratio, by approximately 40 basis points. According to the terms of the Transaction, part of AstroBank's Non-Performing Exposures (NPEs) are excluded, resulting in the Transaction being neutral for the NPE ratio at Group level.
In addition, the Group Transaction is expected to increase Earnings Per Share (EPS) by approximately 5% and Return on Equity (ROTE) by approximately 60 basis points, taking into account the synergies generated. The transaction is expected to close in the fourth quarter of 2025 and completion is subject to finalization of contractual documents for the transaction and satisfaction of customary terms and conditions, including necessary regulatory approvals and licenses. Subject to the contractual terms of the transaction, the consideration to be paid to AstroBank upon completion is estimated at at least €205 million.
Main points of the transaction in Cyprus:
- Market expansion: Alpha Bank Cyprus strengthens its presence with a market share of approximately 10% in terms of total assets and emerges as the third systemic bank in the Cypriot economy.
- Business growth: The transaction is expected to significantly enhance the Group's loans and deposits in Cyprus (loan portfolio +60%, deposits +70%) while, fully calculating estimated synergies, it is expected to double the profitability of the Group's subsidiary in Cyprus.
- Strategic compatibility: The acquisition brings together two fully complementary banking institutions, with AstroBank contributing a diversified loan book focused on SMEs.
- Timeframe: Subject to obtaining the necessary regulatory approvals, completion of the transaction is estimated in the fourth quarter of 2025.
