Breaking news

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

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.

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.

Cyprus Hourly-Paid Government Workers Stage First-Ever 24-Hour Strike

Hourly-paid government employees in Cyprus staged the first 24-hour strike of its kind on Wednesday, marching from the Ministry of Finance to the Presidential Palace as they demanded higher wages and the renewal of their collective agreement.

Protesters gathered outside the Ministry of Finance before marching to the Presidential Palace, chanting slogans including “No to starvation wages” and “Enough of the mockery, we are not second-class workers.” Union representatives later delivered a memorandum to the President of the Republic, calling for his intervention in negotiations with the finance ministry.

According to the unions, hourly-paid government employees have received total wage increases of just 1.5% over the past 17 years.

A Broad Cross-Section Of The Public Sector Walks Out

The strike brought together workers from across the hourly government workforce, including skilled technicians, conservators of antiquities, builders, engine operators, road transport inspectors, cleaning staff, health services personnel, forest firefighters, firefighters and lifeguards.

Giorgos Constantinou, secretary-general of OEKDY SEK, said in a speech outside the Presidential Palace that this was the first time in the history of the Republic of Cyprus that hourly government staff had launched a 24-hour strike. “We are demanding wage increases,” he said, adding that it is “unacceptable” for the government to treat hourly staff unfavorably despite the essential work they perform in keeping the state machinery running.

Stavros Andreou, secretary-general of PASYEK-PEO, said the workers were demanding to be heard. “We are not beggars and we are not asking anyone for charity. We are asking the state to adopt policies that allow workers to live with dignity,” he said, noting that hourly government employees are paid at minimum-wage levels. He added that 30% of hourly government workers earn up to €1,500 a month.

Andreas Antoniou, secretary-general of DEE KDOKO DEOK, said hourly employees are low-paid and cannot keep pace with the demands of the modern economy. He noted that the overall increase since 2009 has been just 1.5%, despite Cyprus posting one of the strongest growth rates in Europe, and argued that wages should rise accordingly.

Their Case Before The President

In the memorandum submitted to the President of the Republic through government spokesman Konstantinos Letymbiotis, the workers asked for his intervention. “We address you with the expectation that you will intervene immediately so that an agreement can be reached for the renewal of the collective agreement for hourly government staff and wages can improve,” the document said.

The memorandum further argues that hourly government workers are paid significantly less than employees in comparable private-sector roles working the same number of hours per week.

It also states that, although the total public service payroll has increased, the cost of the hourly government workforce has declined and is now well below even its 2011 level. According to the unions, requests for wage increases have been on the table since April of last year.

Warnings Of A Broader Escalation

After the memorandum was delivered, Andreou said the government spokesman had committed to relaying the unions’ position to the president and the finance minister. The workers and unions, he said, would allow the government time to review the document before deciding their next move.

“If we do not receive a positive response, if the President of the Republic does not open the door to dialogue through his intervention, we will discuss among ourselves and respond in the coming period more dynamically, more massively and with different, perhaps more forceful, methods,” he said.

Constantinou said the unions had explained to the government spokesman the importance of hourly government staff to the functioning of the state. He said they had been assured that the President would be informed and that the Ministry of Finance would also be briefed, expressing hope that an agreement enabling pay increases could be reached in the coming days.

Antoniou added that the unions had explained to the spokesman that most hourly workers earn wages that “barely allow them to get by.” He said they hoped the message would reach the President so that, through his intervention, the finance ministry would enter into meaningful dialogue aimed at a swift agreement.

Workers Describe Strain On Household Budgets

Speaking to journalists, a health-sector employee said the workers are asking for the wage increases that have been delayed for years, as well as respect and dignity. Another health worker, who said she has been employed for a decade, reported a monthly salary of €1,000 and questioned how anyone can live with dignity on that income when monthly expenses are higher.

A district administration employee with 40 years of service said his salary had not risen above €2,000, describing it as a “starvation wage.” Another worker with 33 years of service said he could still not afford necessities.

A lifeguard said lifeguards are among the most disadvantaged hourly employees because they work on six-month contracts and receive no provident fund or other benefits. “The state should give us the basic rights every worker has so that young people will continue to see a future in the profession,” he said, adding that six-month contracts drive people away into other jobs.

Government Says Talks Will Continue

Government spokesman Konstantinos Letymbiotis said discussions would continue, noting that the finance ministry had viewed some of the unions’ requests positively during a meeting held the previous day. After receiving the memorandum, he said it would be forwarded to the President.

Letymbiotis also highlighted measures introduced by the government over the past three years, including wage progression under scale A2.5.7, the full restoration of the cost-of-living allowance, the recent tax reform and the 1.5% across-the-board increase for public-sector employees.

Responding to comments by Finance Minister Makis Keravnos that the demands could exceed €50 million, Letymbiotis said one wage-related request alone would cost around €30 million over three years.

“These are not insignificant amounts,” he said. “They are substantial sums that must be considered in relation to the rest of the public sector, to salary levels and to the state’s fiscal capacity.”

Uol
eCredo
The Future Forbes Realty Global Properties
Aretilaw firm

Become a Speaker

Become a Speaker

Become a Partner

Subscribe for our weekly newsletter