CNP Assurances (CNP) and Marfin Popular Bank (MPB) have agreed to enter into a long-term business partnership for the development of insurance and pensions sales by MPB’s banking networks in Greece and Cyprus. This insurance partnership is expected to be extended to other countries in the future along with MPB’s international expansion in Southern & Eastern Europe.
Under the terms of the agreement:
- CNP will acquire a 50,1% shareholding in MPB’s insurance businesses (currently composed of 66% life insurance, 34% non-life insurance) led by Laiki Cyprialife (LCL – life insurance in Cyprus), Laiki Insurance (LI – non-life insurance in Cyprus), Marfin Life (ML – life insurance in Greece), Marfin Brokers (MB – non-life broker in Greece) and will assume management control of these companies,
- The business partners will enter into a 10-year renewable exclusive distribution agreement with an extension option in the countries where MPB develops.
The partnership’s key strategic objectives are:
- In Cyprus which is a fast growing market the combined group aims to further strengthening LCL and LI’s strong positioning which is reflected in market shares of 25% and 15% of domestic life and non- life businesses respectively.
- In view of its low penetration levels, Greece offers significant growth potential. In that market the partnership will enable MPB to offer a comprehensive product offering thus significantly improve its positioning and as a result attain a market share in insurance and pensions commensurate to its overall banking market share of 5%.
As a result of this agreement, MPB will receive from CNP an up-front consideration of €145 million, plus an earn-out of about €20 million linked to business objectives. The structure of the transaction will also involve a pre-dividend payable to MPB of €20 million. This self-financed transaction will have a positive impact on CNP’s earnings per share from 2009 and will be neutral from a solvency perspective. MPB is expected to register a pre tax capital gain of approximately €60 million from the completion of this transaction which is expected to be finalised by the end of the year, once the necessary regulatory authorisations have been obtained.
Efthimios Bouloutas, MPB’s Group Chief Executive Officer, said, “We are delighted for our strategic partnership with CNP. We believe that MPB’s positioning, offering a combination of a leading position in Cyprus and an expanding distribution infrastructure consisting currently of 170 branches in Greece, combined with CNP’s long standing experience and expertise in insurance business will make this partnership a true success story. The partnership will also enable MPB to grow faster in insurance business in Southeastern Europe.”
“MPB is a very dynamic bank and we are delighted to have them as our business partner,” said Gilles BENOIST, Group Chief Executive Officer of CNP Assurances. “We should also have opportunities to create value together not only in Greece and Cyprus but also in other countries where MPB is already present, such as Romania, Ukraine and Serbia. Moreover, the agreement is fully aligned with our Horizon 2012 strategy which focuses external growth in three priority markets: Southern Europe, Central Europe/Eastern Europe/Mediterranean Arc and Latin America.”
Cautionary Note Regarding Forward-Looking Statements
Some of the statements contained in this press release may be forward-looking statements referring to projections, future events, trends or objectives which, by their very nature, involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated in such statements by reason of factors such as changes in general economic conditions and conditions in the financial markets, legal or regulatory decisions or changes, changes in the frequency and amount of insured claims, particularly as a result of changes in mortality and morbidity rates, changes in surrender rates, interest rates, foreign exchange rates, the competitive environment, the policies of foreign central banks or governments, legal proceedings, the effects of acquisitions and the integration of newly-acquired businesses, and general factors affecting competition.Appendices
Marfin Popular Bank
MPB, a dynamic, fast-growing group, is Greece’s fifth largest bank in terms of assets. It is ranked 7th in the Greek deposit-taking/lending market, with a market share of around 5%, and 2nd in the same market in Cyprus, with about 20% share.
MPB has a network of over 450 branches, including 115 in Cyprus and nearly 170 in Greece. In 2007, the group reported net banking revenue of €1,242 million and net profit of €593 million.
CNP Assurances
CNP Assurances, France’s leading personal insurer and among the top 5 European life insurers, reported 2007 premium income of €31.5 billion and EBIT of more than €1.8 billion. The Group’s international operations represented premium income of €4.5 billion, or 14% of total premiums, and accounted for 24% of total EBIT. Its main host countries outside France are Italy, Brazil, Portugal and Spain.
Additional information about MPB’s insurance business
| 2007 - €m | Life (1) |  | 2007 - €m | Non-life (1) |
| Premium income | 112 | | Premium income | 57 |
| Embedded value(2) | 130 | | Combined ratio(4) | 95% |
| Net profit(3) | 16 | | Net profit(3) | 5 |
| Book value | 69 | | Book value | 20 |
| Total assets | 594 | | Total assets | 103 |
(1) Cyprus + Greece
(2) TEV
(3) Excluding non recurring
(4) Laiki Insurance only
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