Borderluiderschrijding bank consolidation benefits Cyprus, says Patsalides, Patsalides says

(Bloomberg)-border transfer mergers among major European lenders can help strengthen the cypriotic financial system, according to the country’s central bank head. “I would welcome more consolidation if it was positive for the economy,” Governor Christodoulos Patsalides said in an interview in Frankfurt. “The banking sector is very strong and that banks are coming from abroad to Cyprus, and European banks supervised by the SSM are a good thing,” he said, referring to the single supervisory mechanism, the watchdog for the largest eurozone lender. Such activity also “increases competition for the local banks, which is important to the economy and the people of Cyprus,” he added. The remarks follow recent acquisitions of Cypriot lenders by the top banks of Greece. Earlier this year, Eurobank SA completed its purchase from Hellenic Bank plc, while Alpha Bank SA is taking over Astrobank. Alpha Bank itself was involved in further border consolidation, with Italy’s Unicredit increasing its stake in the Greek money shooter to about 26%. Patsalids emphasized the strong capital position of the banks of his country-a turnaround more than a decade ago, when Cyprus received an international bail during Europe’s sovereign debt crisis. The process also involved a painful bail on deposits. The Central Bank Chief has appointed Cyprus economic resilience. This year’s 3% growth forecast far exceeds European counterparts, while an expected budget surplus of 3.5% of gross domestic product is in contrast to deficits in a large part of the region. Yet Cyprus is a very small and open economy that is vulnerable to external shocks such as a broader slowdown in European growth, according to patsalides, which has also singled out climate change. “It can affect tourism – there are droughts, forest fires,” he said. “These are real risks.” Earlier this summer, two people died in a large wildfire on the island when the temperature rose for days. “I am more concerned about the macro, the imported risks – climate risk is also a problem,” Patsalides said. “These are the most important risks I’m worried about.” -With help from Alexander Weber, Mark Schroers, Jana Randow and Lizzy Burden. More stories like these are available on Bloomberg.com © 2025 Bloomberg LP