Eurobank builds on its Cyprus presence as group earnings climb

Eurobank posts €1.16bn profit as Cyprus operations contribute €367mEurobank reported €367 million in profit before tax from its Cyprus operations for the first nine months of 2026, as the group’s overall net profit attributable to shareholders rose to €1.16 billion, according to its interim financial statements released on Monday. The bank’s Cyprus operations generated €733m in external revenue between January and September, accounting for a substantial share of the group’s international business, which also includes Bulgaria, Luxembourg and other markets. Cyprus accounted for €579m in net interest income, €98m in net banking fee and commission income and €56m in other net revenue during the nine-month period, according to the financial statements. The results come as Eurobank continues to integrate its Cypriot banking and insurance operations, following the acquisition of the former CNP Cyprus subgroup in April 2025 and the subsequent merger of Eurobank Ergasias Services and Holdings with Eurobank SA in December 2025. Cyprus operations and integration Eurobank’s international operations recorded total external revenue of €1.23bn, with Cyprus contributing the largest share, ahead of Bulgaria, which generated €437m, and Luxembourg, which recorded €54m. The bank’s Cyprus segment had assets of €29.43bn at the end of September, alongside liabilities of €25.94bn, reflecting the scale of its operations in the local market. Operating expenses in Cyprus amounted to €259m, while impairment losses on customer loans stood at €23m. The segment also recorded €8m in other impairments and risk provisions, €49m in restructuring costs and a €27m special tax levy on credit institutions. The restructuring costs were linked to the ongoing reorganisation and integration of Eurobank’s Cypriot business, with the group recognising €10m in costs specifically related to the reorganisation and integration of its Cyprus operations during the nine-month period, compared with €11m in the corresponding period of 2025. Eurobank Limited also launched a voluntary exit scheme in March 2026 for employees of the bank and its insurance subsidiaries, as part of efforts to improve operational efficiency and streamline its organisational structure. The scheme resulted in approximately €38m in employee termination costs during the first nine months of the year, but is expected to generate annual personnel cost savings of around €14m in the coming years. Group profitability and balance sheet At group level, net profit attributable to shareholders reached €1.16bn, compared with €1.03bn in the corresponding nine-month period of 2025. Net profit from continuing operations amounted to €1.14bn, while profit from discontinued operations contributed a further €18m. Eurobank’s adjusted net profit, which excludes restructuring costs, certain non-performing exposure reduction expenses, contributions to Greek infrastructure projects and gains from discontinued operations, stood at €1.21bn. Of this adjusted profit, €555m was generated by international operations, broadly unchanged from the €557m recorded in the same period of 2025. Total operating income increased to €2.77bn, from €2.56bn a year earlier, supported by higher net interest income and fee-based revenue. Net interest income, the difference between the interest earned on loans and other assets and the interest paid on deposits and funding, rose to €2.07bn, compared with €1.90bn in the first nine months of 2025. Net banking fee and commission income increased to €511m, from €452m, while income from non-banking services climbed to €118m, compared with €105m. Operating expenses totalled €1bn, up from €957m a year earlier, while impairment losses on customer loans declined to €235m, from €261m. For the third quarter alone, net profit attributable to shareholders reached €423m, compared with €342m in the corresponding period of 2025. The bank’s balance sheet also expanded, with total assets rising to €114.23bn at September 30, 2026, from €107.98bn at the end of 2025. Customer loans increased to €57.93bn, compared with €54.66bn at the end of December, while customer deposits climbed to €87.18bn, from €82.70bn. Eurobank’s board also decided in October to distribute an interim cash dividend of €214m for the 2026 financial year, funded from the bank’s non-mandatory reserves. The group’s total capital adequacy ratio stood at 20.4 per cent at the end of September, compared with 19.5 per cent at the end of 2025, while its core capital ratio increased to 15.5 per cent, from 15.2 per cent. Its liquidity coverage ratio reached 174.4 per cent, up from 172.2 per cent, while its non-performing exposure ratio improved to 2.4 per cent, from 2.6 per cent. Cyprus economic outlook Eurobank’s financial statements also include macroeconomic assumptions for Cyprus, used in assessing potential loan losses over the 2026-2029 period. Under the bank’s base scenario, Cyprus’ average annual GDP growth is projected at 3.10 per cent, while the optimistic and adverse scenarios envisage growth of 4.03 per cent and 1.25 per cent respectively. The base scenario also assumes average annual real consumption growth of 2.95 per cent and gross fixed capital formation growth of 2.53 per cent, with the latter reflecting investment in areas such as buildings, infrastructure and equipment. The unemployment rate is projected to average 4.35 per cent under the base scenario, compared with 3.88 per cent under the optimistic scenario and 6.05 per cent under the adverse scenario. The assumptions also envisage average annual residential property price growth of 2.43 per cent and commercial property price growth of 1.55 per cent under the base scenario. Inflation is projected to average 2.78 per cent, compared with 3 per cent under the optimistic scenario and 3.28 per cent under the adverse scenario. The bank said the economies of Greece, Bulgaria and Cyprus had maintained their expansionary momentum during the first half of 2026, despite a challenging international environment, and were expected to continue growing faster than the euro area average during 2026 and 2027. However, it warned that geopolitical tensions and persistent inflation remain key risks, particularly in light of the Middle East conflict and the war between Russia and Ukraine. The group said prolonged disruption to maritime trade, particularly energy shipments, could increase costs and intensify inflationary pressures, while uncertainty over monetary policy and the potential slowdown in investment following the conclusion of the EU’s Recovery and Resilience Facility could weigh on growth. Eurobank also highlighted the resilience of the Greek and Cypriot economies, supported by their strong fiscal positions, as a factor that could help mitigate the impact of external shocks. Kedipes transaction completed Eurobank Limited completed a transaction with state-owned asset management company Kedipes on January 30, 2026, involving the sale of a portfolio of non-performing exposures and the termination of an asset protection scheme linked to the former Cyprus Co-operative Bank. The transaction involved the sale of non-performing loans with a net carrying amount of €192m for €180m, alongside payments of €17.5m and €10m to Eurobank Limited relating to the termination of the protection scheme and the settlement of disputes. The transaction resulted in the removal of the non-performing loans from the group’s balance sheet and generated a €6.5m gain, reflected in other income. Eurobank’s Cyprus insurance operations also continued to be incorporated into the group’s financial statements, following the acquisition of ERB Cyprus Insurance Holdings and its subsidiaries, formerly the CNP Cyprus subgroup. The acquisition was included in the group’s accounts from the second quarter of 2025, with the final valuation of the acquired assets and liabilities completed during the first quarter of 2026, leaving unchanged the €58.4m gain previously recognised.