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Bonus of €20 Million for Eurobank from Bulgaria’s Eurozone accession

Bonus of €20 Million for Eurobank from Bulgaria’s Eurozone accession

Πηγή Φωτογραφίας: Eurokinissi (Αρχείου)//Bonus of €20 Million for Eurobank from Bulgaria’s Eurozone accession

According to Bulgaria’s regulatory framework, all banks in the country are required to deposit 12% of their balance sheet as non-interest-bearing reserves at the central bank. This ratio will be reduced to 1% upon the country’s entry into the Eurosystem.
Bulgaria’s Eurozone accession to Unlock €1 Billion in Postbank Liquidity, Adding €20 Million Annually to Eurobank’s Profitability.Bulgaria’s adoption of the euro, effective from January 1, 2026, is expected to provide an annual profit boost of approximately €20 million for Eurobank. This will result from the release of around €1 billion in liquidity from its subsidiary, Postbank, currently held as mandatory, non-interest-bearing deposits at the Bulgarian National Bank.

According to Bulgaria’s regulatory framework, all banks in the country are required to deposit 12% of their balance sheet as non-interest-bearing reserves at the central bank. This ratio will be reduced to 1% upon the country’s entry into the Eurosystem.

This change will lead to the release of around €8 billion in reserve deposits from the Bulgarian banking system as a whole.

For Eurobank, approximately €1 billion in non-interest-bearing deposits currently held by Postbank at the central bank will be “freed up” and can be utilized under market conditions.

Given the current interest rate of around 2%, this is estimated to translate into an annual benefit of €20 million for the group. Banking sources estimate that these funds will gradually be allocated either to bond investments or to new loan issuance, ultimately increasing interest income.

Postbank’s Momentum

Bulgaria is a strategic market for Eurobank, which maintains a strong presence through its subsidiary, Postbank. The subsidiary holds a market share exceeding 10% in the country, reaching 16.5% in certain segments, such as mortgage lending.

As of 2024, Postbank’s assets amounted to €11.5 billion, with a net loan portfolio of €7.6 billion and deposits of €8.8 billion.

It operates a network of 189 retail branches and an additional 11 business and private banking units, employing 3,433 people.

Postbank’s net profits reached €53.8 million at the end of December 2024, representing 25.7% of the group’s total international profitability of €209 million.

It is worth noting that Bulgaria is on a trajectory of robust economic growth. In 2024, the country’s economy grew at a rate of +2.8%, a significant acceleration compared to +1.9% in 2023.

A key development was the continued rapid disinflation in 2024, with average inflation dropping to 2.6% from 8.6% in 2023 — a performance that paved the way for meeting the euro adoption criteria.

Strong International Footprint

Eurobank has the largest international footprint among Greek systemic banks, a position that was significantly enhanced following its acquisition of Hellenic Bank in Cyprus.

The merger of Hellenic Bank and Eurobank Cyprus creates the largest bank in Cyprus, with assets of €27 billion, surpassing the historical dominance of Bank of Cyprus. At the same time, Eurobank secures the top position in the Greek banking market, with assets exceeding €100 billion and a strong international presence.

In Eurobank’s strategic plan, Cyprus plays a key role, transforming into a hub linking Europe and the Middle East.

The “new” Eurobank in Cyprus, Eurobank Limited, will serve as the group’s base for expansion into India, Abu Dhabi, Israel, and the wider region, aiming to mobilize investments and trade with substantial benefits for both the Cypriot and Greek economies.

Outside of Greece, the group’s total assets amount to €42 billion (March 2025), with a loan portfolio of €17.8 billion, deposits of €35.1 billion, and a workforce of 6,224 employees according to businessdaily.gr and Giannis Papadogiannis

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