Cyprus is becoming a strategic “headquarters” for the development of Greek banks outside Greece, with Eurobank focusing on becoming the largest bancassurance group following the acquisition of Hellenic Bank and CNP insurance, Alpha Bank “establishing itself” in third position through acquiring AstroBank’s banking operations, and National Bank maintaining a (small but significant) presence on the island since 1994 through its subsidiary bank.
Cyprus and Greek banks: The major economic opportunity
With the creation of Eurobank Ltd (resulting from the legal merger of Eurobank Cyprus and Hellenic Bank, which will be completed operationally in April 2027), Eurobank clearly signals its ambitious goals for international expansion into eastern markets (Middle East, Gulf countries, India).
Its strategic investment of €1.3 billion for the acquisition of Hellenic Bank represents a historic milestone for Cyprus’s banking sector and marks a new era for the Eurobank Group in the country. It also constitutes a strong vote of confidence in the Cypriot economy and its prospects, confirming Cyprus’s pivotal role in the group’s broader planning – something that will be further confirmed by the dual listing that Eurobank is planning with its introduction to the Cyprus Stock Exchange in Q1 2026.
Alpha Bank completed the acquisition of AstroBank’s banking operations, the third largest bank in Cyprus, to strengthen Cyprus’s role as a financial hub in the Southeast Mediterranean. With the completion of this transaction, Alpha Bank Cyprus becomes the third largest bank in Cyprus, with total assets exceeding €6.6 billion, a loan portfolio exceeding €2 billion, and deposits surpassing €5.6 billion, dramatically increasing its capabilities to offer comprehensive banking services to individuals, businesses, and institutional clients. The transaction substantially strengthens Alpha Bank’s capital and operational base in Cyprus, creating an even more resilient and competitive organization capable of supporting households, small and medium enterprises, and large corporate clients.
Cyprus’s appeal to Greek banks goes beyond its strategic geographical position and shared ethnicity and language with Greece. Cyprus’s macroeconomic environment continues to improve, the country holds investment grade status, and has very quickly overcome the 2013 crisis that led to deposit haircuts, now “running ahead” having completely transformed its economic model.
Cyprus presents by far the highest growth in the eurozone, with a GDP growth rate of 3.9% in 2024 and estimated growth of 3.2% in 2025 and 3.3% in 2026. The corresponding growth rates for Greece are expected at 2.2% and 2.3% for 2025 and 2026 (GDP closed at +2.1% in 2024), while the eurozone is expected at 1.8% for both years (+0.9% in 2024). Regarding unemployment, Cyprus moved to 4.9% in 2024 and the rate is expected to decline to 4.5% in 2025 and 4.3% in 2026. As for inflation, 2024 shaped up at 2.3% in Cyprus (versus 3% for eurozone and Greece) and is projected at 1.4% this year and 1.9% in 2026 (eurozone forecast 2.8% and 2.9% respectively, and Greece 3% and 2.5%).
Published in MoneyPro of Parapolitika
