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Cyprus Implements EU-Mandated 15% Tax Rate On Large Multinationals

Cyprus is set to introduce a 15% minimum tax rate for large multinational corporations, in compliance with the EU directive aimed at harmonising tax policies across member states. The move, endorsed by Cyprus’ Finance Minister Makis Keravnos, is expected to generate over €200 million in additional revenue. This decision, while marking a significant shift from the current 12.5% rate, aligns Cyprus with the broader OECD-led initiative to establish a global minimum tax rate. Despite concerns, Keravnos reassured that the change is unlikely to drive multinationals out of the country, as the directive applies EU-wide.

This adjustment reflects a crucial step in Cyprus’ ongoing efforts to maintain competitiveness while adhering to international tax standards. With the proposal now before the Cabinet and soon to be discussed in Parliament, the nation is poised to balance its attractive tax regime with the demands of a globalised economy.

The introduction of this tax rate signals Cyprus’ commitment to international cooperation on tax matters, aiming to prevent profit-shifting practices that have historically allowed large corporations to minimise tax liabilities. For Cyprus, a key hub for multinational firms, this move could redefine its positioning in the global business landscape, ensuring it remains a compliant yet competitive destination for international business.

While the increase may seem minor, the 15% rate represents a broader shift in global tax policy, driven by a collective effort to create a more level playing field for taxation. For Cyprus, traditionally seen as a tax-friendly jurisdiction, this could challenge its status, pushing it to leverage other competitive advantages beyond low tax rates, such as a robust legal framework, strategic location, and skilled workforce. The long-term impact on foreign direct investment will be a critical metric to watch as this policy unfolds.

Citigroup Raises Eurobank Target Price Following Strong Q1 Results

Revised Target Price Reflects Strengthened Outlook

Citigroup raised its target price for Eurobank to €5.00 from €4.70 while maintaining a buy recommendation following the bank’s first-quarter results and upgraded medium-term profitability outlook. Based on Eurobank’s reference share price of €3.72 on May 15, 2026, Citigroup’s revised target implies upside potential of 34.4%, rising to 38.5% when the estimated dividend yield of 4.1% is included.

Enhanced Earnings And Comprehensive Forecasts

The upgraded analysis from Citigroup, as reported by Newmoney, points to bolstered momentum in net interest income and fee generation. The investment bank has revised its normalized earnings per share forecasts upward: 4% for 2026, 9% for 2027, and 14% for 2028, primarily driven by higher expected net interest income and increased commissions.

Scenario Analysis Offers Range Of Outcomes

Citigroup’s bullish scenario values Eurobank shares at €6.10, implying potential upside of 64%. Its downside scenario projects a share price of €3.55, approximately 4.6% below the May 15 reference level. The optimistic case assumes a return on tangible equity one percentage point higher, alongside a 100 basis point reduction in the cost of equity. Meanwhile, the negative scenario assumes a 1.5 percentage point lower return combined with a 200 basis point increase in the cost of equity.

Solid Q1 Results Support Growth Targets

Eurobank reported normalized net profits of €351 million during the first quarter, broadly in line with market expectations. Reported net profit reached €331 million after a €35 million expense linked to a voluntary exit programme involving around 200 employees. The programme is expected to generate annual savings of approximately €14 million. Net interest income increased 3% quarter-on-quarter, exceeding consensus forecasts by 2% and supporting expectations that the bank could surpass its €2.6 billion target for 2026.

Looking Ahead: Ambitious Growth And Profitable Outlook

Organic loan growth reached €1.1 billion during the quarter, supporting management’s target for €3.8 billion in annual organic credit expansion. Fee income also rose 20% year-on-year, outperforming forecasts by 4%. Citigroup projects Eurobank’s net profit will reach €1.45 billion in 2026, with earnings per share of €0.40 and a dividend of €0.20 per share.

By 2028, the bank forecasts net profit of €1.76 billion alongside further improvement in profitability metrics and dividend yield. The revised projections reinforce expectations that Eurobank will continue benefiting from stronger lending activity, resilient fee income and improving operational efficiency.

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