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Cypriot Consumer Protection Service Levies Significant Fines Against Banks For Unfair Mortgage Terms

by THEFUTURE.TEAM

September 23, 2025

Regulatory Action Against Unfair Mortgage Practices

The Consumer Protection Service announced on Tuesday that it has imposed substantial administrative fines on both the Bank of Cyprus and Eurobank (Cyprus) for incorporating unfair terms in their mortgage loan agreements. The Bank of Cyprus is obligated to pay €800,000, while Eurobank, previously recognized as Hellenic Bank, faces a fine of €600,000.

Evaluation And Evidentiary Review

In a meticulous review of the banks’ contractual practices, the regulator examined extensive evidence, considered the banks’ positions, and evaluated their readiness to adhere to legal requirements. The investigation revealed that several clauses in the Bank of Cyprus’ standard mortgage contracts—pertaining to interest rate adjustments, set-off rights, consumer notices, and property revaluation—were deemed unfair.

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Impact On Consumers And The Broader Market

Mortgage agreements, which often represent the largest financial undertaking for many consumers, are integral to personal and national economic stability. The Service highlighted that these contracts, particularly those affecting individuals aged 20 to 45, frequently secure a first home. The inclusion of clauses that limit consumer rights in long-term and high-value agreements underscored an aggravating factor in the regulatory review.

Mitigating Factors And Ongoing Compliance Efforts

The regulator noted mitigating elements, such as the Bank of Cyprus’ willingness to amend the contentious clauses and enhance contract transparency in newer agreements. Full cooperation with the investigation, demonstrated by the prompt provision of requested information, was also acknowledged. Similar issues were identified in Eurobank’s standard contracts, covering repayment methodologies, collateral terms, interest, fees, charges, default events, and general set-off rights, all of which were found to be inconsistent with consumer protection standards.

Ensuring Fair And Transparent Mortgage Commitments

This regulatory action, emerging from an ex officio investigation, reinforces the commitment to safeguarding consumer rights and ensuring fairness in mortgage agreements. It serves as a stern reminder to financial institutions about the importance of adhering to legal and ethical standards in their contractual dealings.

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Bank of Cyprus Upgrade Signals Fresh Optimism For Greek And Cypriot Banks

by THEFUTURE.TEAM

June 26, 2026

Regional Banks Enter A More Favorable Cycle

Bank of Cyprus and Eurobank are well positioned to benefit from a renewed re-rating of Greek and Cypriot bank stocks, according to Cyprus-based investment firm Roemer Capital, which upgraded Bank of Cyprus to a buy rating and reaffirmed its positive view on Eurobank.

The firm cited easing geopolitical tensions, resilient economic growth in Greece and Cyprus, lower funding costs and Greece’s expected transition to developed-market status as the main factors supporting the sector.

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Roemer Capital also lowered its cost of equity assumptions, updated its forecasts following first-quarter 2026 results and extended its valuation horizon to the end of 2027, raising target prices across its banking coverage.

Bank Of Cyprus Gets The Largest Upgrade

Bank of Cyprus received the biggest revision, with Roemer Capital upgrading the stock from hold to buy and setting a target price of €11.10, implying potential total upside of 27%.

The firm highlighted the bank’s strong capital generation, profitability and projected 100% dividend payout, describing it as the strongest capital-return story among the banks under coverage. Roemer Capital maintained its buy rating on Eurobank, assigning a target price of €4.90 and forecasting potential upside of 28%. The report said the bank is well placed to benefit from loan growth, improving operating performance and merger-and-acquisition synergies.

National Bank of Greece and Piraeus Bank also retained buy ratings, with expected returns ranging from 25% to 36%. Optima Bank was upgraded to buy, while Alpha Bank remained at hold on valuation grounds.

Why Growth Still Sets The Region Apart

According to Roemer Capital, Greek and Cypriot banks continue to benefit from stronger economic fundamentals than many western European peers. The report pointed to faster economic growth, healthier balance sheets, low levels of non-performing exposures, capital ratios approaching 20% and strong customer deposit bases.

Analysts expect performing loans across the sector to grow at a compound annual rate of 6% to 8% through 2028, supported by private investment, digitalisation, green manufacturing, supply-chain expansion and a gradual recovery in household lending.

The report also said the conclusion of lending under the EU Recovery and Resilience Facility is unlikely to materially affect credit growth, as banks have already shifted back towards traditional commercial lending. Roemer Capital expects Euribor to remain between 2.2% and 2.5%, a level it believes should support both lending activity and net interest margins.

Geopolitics, Valuation And Market Structure Support The Case

The report said improving geopolitical conditions have strengthened the investment outlook, noting that Brent crude prices have largely returned to pre-war levels while Greek government bond yields have stabilised at around 3.5%. Although geopolitical risks remain, Roemer Capital believes the likelihood of a major inflationary shock or significant pressure on bank profitability has eased.

Another important catalyst identified by the firm is Greece’s expected promotion to developed-market status by FTSE Russell, STOXX and MSCI over the coming months.

According to the report, the reclassification should improve liquidity and attract a broader base of international investors. Roemer Capital also said Euronext’s acquisition of the Athens Exchange is expected to strengthen market infrastructure and increase international visibility, particularly for Bank of Cyprus and Optima Bank.

The firm noted that Bank of Cyprus has already benefited from its Athens listing, with average daily trading value increasing from less than €400,000 before its September 2024 move to nearly €6 million afterwards.

Economic Momentum Remains A Core Tailwind

Roemer Capital said both Greece and Cyprus have moved beyond post-crisis recovery and are now supported by private-sector-led growth. For Cyprus, the report highlighted recent tax reform and efforts to simplify the legal and regulatory framework, while also noting that limited foreign banking competition continues to support domestic lenders.

Overall, Roemer Capital expects Greek and Cypriot banks to remain well-positioned for profitable loan growth over the coming years.