Newsroom
Hellenic Bank has just become the poster child for how Cyprus’ new 15% minimum tax law is starting to shake up the financial sector , and it’s not just about tax bills.
According to an article written by Panayiotis Rougalas, the new rule , part of a wider EU directive known as “Pillar Two,” officially came into force in Cyprus in December 2024. Its aim? To make sure large companies, especially global giants and big domestic players, pay a minimum level of tax, no matter how they structure their business. The law applies to groups with annual revenues of over €750 million, and Cyprus is now fully on board.
Enter Hellenic Bank.
Thanks to Eurobank’s recent 56% acquisition of Hellenic, the Cypriot lender now falls squarely under the multinational umbrella. That means it no longer enjoys Cyprus’ lower 12.5% corporate tax rate but instead faces the mandatory 15% floor, which made its debut in Hellenic’s Q1 2025 results.
Taxman’s knock, and it’s a heavy one
In Q1 2025, Hellenic’s tax bill came in at €9.6 million. That might sound lower than the €13.2 million it paid the year before, but a chunk of that this year includes deferred tax credits , essentially a tax break the bank can’t cash in on just yet. And in Q4 2024, the impact of the new tax rule was even clearer, with a €6.4 million top-up tacked onto a €20.6 million total tax charge.
But the taxman wasn’t the only one squeezing Hellenic this year.
Profits sliced in half
In the same quarter the new tax hit, the bank’s profits dropped sharply , falling to €44.6 million from €93.3 million a year earlier. That’s a 52% nosedive.
What happened? A mix of rising interest expenses (the bank had to pay customers more for deposits), falling income from loans, and some major restructuring costs , including a voluntary exit scheme that saw 154 employees retire early. That plan alone will save the bank an estimated €11.2 million annually, but the upfront cost is shown in the books.
Return on tangible equity , a key profitability gauge , also took a hit, sinking to 9.6% from last year’s 24.8%.
Still standing, but the terrain has changed
Despite all this, Hellenic remains one of Cyprus’ financial heavyweights. Total assets are holding firm at €18.5 billion. Deposits are up slightly to nearly €16 billion. Non-performing loans are down. And the bank’s capital ratios , its buffer against shocks , have improved.
The bigger picture? Hellenic’s results offer a glimpse of what’s ahead for other big banks in Cyprus. The 15% minimum tax is here to stay, and as more institutions cross the revenue threshold or align with multinationals, the impact will spread.
The bottom line is Hellenic Bank may be the first Cypriot lender to get hit by the new tax rules, but it won’t be the last.
