Newfound Optimism for the Cypriot Banking Sector

Astrobank CEO George Appios discusses lessons learned and new strategies to grow Cyprus’ banks

George Appios started his career at an auditing firm before joining the finance department of a civil engineering multinational in London. In 1995 he joined Cyprus’ Hellenic Bank, becoming Chief Financial Officer and later Senior Manager and Member of the Executive Committee. In 2008, Mr. Appios became General Manager and CEO at Piraeus Bank. Since 2013, he has served as Managing Director and Chief Executive Officer of Astrobank.

With an annual GDP growth of 3.5% and one of the fastest growing economies in the Eurozone (3% average from 2017-2020), trust in Cyprus’ economy is back, according to Mr. George Appios, CEO of Astrobank.

Astrobank is a former Greek Piraeus Bank subsidiary which emerged in December 2016, when a group of international investors led by Lebanese banker Maurice Sehnaouri acquired Piraeus Bank following a €40 million capital increase.

Mr. Appios pointed to evidence of renewed trust in Cyprus’ banking sector, including the growth of deposits. He said that as people continue to bring their savings to the bank, “it is evident that the trust has been restored.”

He attributed much of this new level of trust to the company’s more stringent regulations on lending, non-performing loans and money laundering protection. “New, much tougher regulations were adopted that have made corporate governance much stronger now than before.” The bank’s CEO noted that the stricter they become, the higher the quality of the clients they attract. “Capital ratios are up and now are in the order of 13-16%, for different banks.”

Astrobank is the newest banking entity to emerge on the island nation of Cyprus, and Appios highlighted the phenomenal change of direction it took. With the new Board came new members, some of them bankers, who enhanced the knowledge and experience of the collective group. The injection of capital allowed them to move from a deleveraging strategy over the last 2-3 years to a growth strategy. He noted that while the bank was continuing to grow organically, “investors are not just looking for organic growth, they are also looking for growth via acquisition, mergers and corporations. So, we are actively doing that as well and especially in the last 6 months.”

Astrobank has a strong focus on corporate social responsibility. The bank teamed up with the European Breast Cancer Coalition and became strategic partners with Europa Donna Cyprus by sponsoring the country’s “Pink Walk,” an annual march conducted to raise awareness on Breast Cancer. Copyright: Veronika Matejkova/

With respect to acquisitions, a lot has been said on the much talked-about, but not yet confirmed, takeover of USB bank by Astrobank, a move that will contribute to the consolidation of the fragmented Cypriot banking sector. The consolidation of the country’s banking sector is among the targets set by Cyprus’ Central Bank and a goal set by the EU Single Supervisory Mechanism.

Along with Spain, Greece, Italy, and Portugal, Cyprus shares the challenge of tackling non-performing loans. With non-performing loans making up 40% of the Astrobank’s balance sheet, the bank is still working to slide out from under the debris left behind by the economic crisis.  He admitted that this was going to take time, “because one thing that we need to improve in Cyprus is our legal system. We need to make it more efficient and effective.” Under the current system, lenders have to wait up to 6 or 7 years to recover mortgages from loan defaulters, Appios noted. He explained that the foreclosure laws passed by the Troika help in this sense and have improved things, but that more can be done.

When it comes to lessons learned in the Cypriot banking system, Appios maintains that the number one takeaway is the importance of focusing on the basic principles of lending. “The practices of the past should never be repeated and will never be repeated,” he observed. “Capital should be there. Character should be there. Cash flow should be there. In the past we were lending with one of these three elements missing or even sometimes all of the three missing.”

The other lesson learned is on the management of international banking clients. Formerly, when it came to outside investors “you had a company owning another company which owned a trust, and then beneficial owners hidden behind these structures — these are things of the past.” Citing that Cyprus was the first country to implement the 4th EU directive on AML (Anti-Money Laundering), Appios explained, “[this] taught us that you need to be more diligent and have all the necessary information when you are dealing with clients who are not in Cyprus but are overseas and are behind a structure.”

Appios believes in the crucial role of corporate social responsibility for Astrobank. “If you are working in an environment and in a country, or in a system, then you have a duty to improve that system.” He described Astrobank’s work with Europa Donna, the European Breast Cancer Coalition, and the choice to become strategic partners with Europa Donna Cyprus by sponsoring the “Pink Walk” in Cyprus. Each year a march is conducted to raise awareness on Breast Cancer. “Awareness is very important.  We are promoting awareness so that women can go and be tested.  This is the only way to combat this disease at the moment.”

“We are also very proud that we are promoting entrepreneurship, especially among young people, as strategic partners of the Junior Achievement Programme,” Appios said. The program is a partnership with the Ministry of Education along with other industry sponsors, which allows “young people, with their teachers, [to] create and register a company, find an idea to promote, sell the product, keep books, [and] get financing. In other words, kids “go through the cycle of marketing the product, the problems, the promotion, the distribution channel — real things and real examples.” According to Appios, kids enjoy the program and leave with the idea that “I can actually create my own company. I can have ideas and follow them up.” Of course, not everyone will achieve this over a lifetime and be successful, he added, “but at least they will try and this is [the] change of the system that I mentioned before. [To] change the culture of people.”

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South EU Summit's editorial team is comprised of an international team of journalists and communication specialists with wide-ranging areas of expertise. We pride ourselves in developing firsthand content, and undertaking personal interviews with the most influential players in each market.

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