Breaking news

Alpha Bank Cyprus Fined €160,000 For Abusive Mortgage Clauses

Regulatory Crackdown On Unfair Mortgage Terms

Alpha Bank Cyprus has been fined €160,000 by the national consumer protection authority for including abusive clauses in mortgage loan agreements. The enforcement action forms part of a broader investigation into standard housing loan contracts used by financial institutions in Cyprus.

Unjust Contractual Provisions Under Scrutiny

The authority’s decision, which took effect on March 9, requires the withdrawal of specific contractual terms that were found to create an imbalance between consumer rights and the bank’s obligations.  According to the findings, certain clauses allowed the bank to modify interest rates and the method used to calculate them without clearly defined objective criteria, which could directly affect the overall cost of mortgage loans.

Other provisions allowed the bank to offset and consolidate customer accounts without prior notice and treated returned communications as successfully delivered. Additional clauses transferred property revaluation costs to borrowers and allowed the bank to debit any customer account to settle outstanding debts.

Efforts Towards Compliance And Mitigating Measures

During the investigation, Alpha Bank Cyprus proposed amendments to several of the disputed clauses and initiated steps to remove others. Authorities noted that the bank cooperated with the investigation and began aligning its mortgage agreements with the relevant legislative and regulatory framework.

Industry-Wide Implications And Ongoing Investigations

The decision follows similar sanctions imposed on other banks operating in Cyprus. Earlier penalties included an €800,000 fine imposed on the Bank of Cyprus on September 23, 2025, while Hellenic Bank, which now operates as Eurobank Cyprus, received a €600,000 fine on September 22, 2025.

The penalties form part of a broader review by the consumer protection authority of mortgage loan contracts offered by banks in Cyprus. Investigations into contract terms used by other financial institutions are continuing as part of the same process

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.

The Future Forbes Realty Global Properties
Uol
Aretilaw firm
eCredo

Become a Speaker

Become a Speaker

Become a Partner

Subscribe for our weekly newsletter