For the... the exclusive discussions between Piraeus Bank and CVC for the acquisition of 70% of Hellenic General Insurance were an expected development. According to reports, the negotiations, which are still ongoing, progressed during Christos Megalou's trip to London. There, together with his advisors, he met with CVC in order to speed up the process. 

THE MOVEMENTS

Before any negotiations could proceed, the shareholders, John Paulson, Yannis Stournaras and the government had been informed from the beginning. After all, it could not be otherwise, as this is a move that comes to increase revenue and generate more value for shareholders. 

THE PRICE

The exclusive discussions with CVC are for the acquisition of 70% of Hellenic General Insurance for €469 million. The price is clearly higher than what the National Bank sold the insurance company to CVC for, but now the environment is different. There is growth; banks have returned to normality after rocky years, and the insurance market has great potential for growth. 

IMPACT ON THE CAPITAL POSITION OF PIRAEUS

Upon completion of the transaction (assuming the deal closes), the pro forma impact on Piraeus' capital position is estimated to be approximately 150 basis points compared to September 2024. This impact corresponds to a capital ratio with a sufficient capital buffer against the Pillar 2 Guidance level of over 200 basis points.

THE HELLENIC GENERAL INSURANCE PROFILE

Ηellenic General Insurance is the leading insurance company in Greece, offering the full range of insurance products, with a market share of around 14% (17% in life insurance and 11% in general lines) and €0.8 billion in gross written premiums in 2023. Its total assets stood at €4 billion and its share capital at €0.4 billion in 2023. Hellenic General Insurance recorded a pre-tax profit adjusted for non-recurring items of approximately €100 million in 2023.

THE NETWORK

Insurance's sales network extends throughout Greece and in 2023 consisted of:

• 130 Sales Network Offices with more than 1.6 thousand Insurance Agents
• 1.100 Affiliated Insurance Agencies
• 135 Associated Insurance Brokers

supported by a network of 6 branches.

WHAT GOLDMAN SACHS SEES

Goldman Sachs estimates that the deal will lower its estimates for the bank's CET1 ratio from 15.6%/16.4%/16.7% for 2025/26/27 to 14.1%/14.9%/15.2%, respectively. This would imply over 300 basis points of capital buffer against the minimum required level set by regulators. The investment house comments that this is a significant "liquidity cushion" equivalent to an estimated €1.1 billion in 2025 or around 21% of Piraeus Bank's estimated capitalization.

THE RESOURCES

Goldman Sachs notes that "in our view, capital buffers will be sufficient for the bank to maintain dividend payout ratios of 30% to 50% over the 2024-2027 period.". In addition, the US bank notes that the diversification of revenue streams within the Greek financial space is likely to allow Piraeus to unlock synergies through the acquisition of customers in different product categories.