Greek lender Piraeus Bank has agreed to purchase a 90.01% stake in the parent company of compatriot Ethniki Insurance from CVC Capital Partners Fund VII (CVC).
The deal, valued at €600m in cash, is contingent upon regulatory clearance.
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Last month, the bank entered exclusive talks with CVC.
Ethniki Insurance holds a market share of approximately 14.5%, with more than €800m in gross written premiums registered in 2024.
The acquisition is projected to diversify Piraeus Bank’s revenue streams and complement its product suite spanning banking, protection and investment solutions.
Piraeus Bank estimates the transaction will boost its earnings per share by 5% and increase its return over average tangible book value by one percentage point.
Its proforma total capital position is expected to reach approximately 18.5% for 2025, with expectations it will grow to around 19.5% by 2027 and 20% by 2028.
The bank also anticipates maintaining a “comfortable” Pillar 2 Guidance buffer and sustaining a Common Equity Tier 1 (CET1) ratio of 13% or higher during this period.
In pursuit of financial conglomerate status, Piraeus Bank intends to apply for the prudential treatment of its participation in Ethniki Insurance’s share capital under CRR article 49, known as the Danish compromise.
If finalised, this could further enhance the bank’s CET1 ratio by 50 basis points.
As of 2023, Ethniki Insurance reported total assets of €4bn and shareholders’ equity of €400m. In the same year, the company logged an adjusted profit before tax of approximately €100m.
UBS Europe is the financial advisor to Piraeus Bank for the deal, with Milliman providing actuarial advice.
Legal and competition counsel is being provided by Milbank, Moratis Passas Law Firm and Potamitis Vekris Law Firm.
In 2022, CVC acquired a 90.01% stake in Ethniki Insurance from the National Bank of Greece.
