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Anticorruption Process Validates Savvides’ Position in Vasiliko LNG Inquiry

Overview Of The Investigation

The Anticorruption Authority has affirmed Attorney-General George Savvides’ stance that he never received three corruption cases in relation to the alleged irregularities at the Vasiliko LNG import terminal. While an investigation into three complaints yielded no evidence of corruption, it did identify a breach of legal obligations for witnesses summoned to testify, prompting the authority to recommend criminal prosecution against the responsible party.

Dispute Over Prosecutorial Measures

Despite the authority’s urging, Savvides maintained that initiating a criminal prosecution was not feasible, primarily because the European Public Prosecutor’s Office (EPPO) had already launched its own probe into the matter. This overlap of jurisdiction effectively limited national efforts and, with the disagreement formally recorded, the matter has now been closed at the domestic level.

Wider Regulatory And Financial Implications

This incident unfolds amidst a broader EPPO investigation launched last year, which scrutinizes suspicions including procurement fraud and alleged misuse of EU funds linked to the LNG project. Further intensifying the issue, recent actions involved a detailed examination of bank accounts belonging to political figures, current and former state officials, and civil servants. Such measures highlight the complexities inherent in cross-border legal coordination at high-stakes infrastructure projects.

European Oversight And Project Challenges

In parallel, the European Commission recently demanded that Cyprus repay nearly €69 million in LNG grants, citing procedural irregularities during the tender process and subsequent contract arrangements with the CPP-Metron Consortium. The stalled project, further complicated by reported disputes over delayed and insufficient payments, underscores the intense scrutiny of both regulatory compliance and execution in major public contracts.

Conclusion

The legal and regulatory dimensions of the Vasiliko LNG project underscore significant challenges in aligning domestic and supranational oversight. As national authorities grapple with the limitations imposed by external investigations, the case serves as a critical reminder of the intricate balance between enforcing local legal frameworks and accommodating broader European judicial processes in high-profile infrastructure endeavors.

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.

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