WM issue 5

|4| EDITORIAL A New Era of Wealth WManagement elcome to the 5th edition of PUBLISHED BY WM, the Cyprus Journal of Wealth Management. At this MANAGING DIRECTOR time last year, we expressed George Michail the hope that 2022 would see the end of the COVID-19 GENERAL MANAGER pandemic and, indeed, things Daphne Roditou Tang have changed a great deal since then. However, we could MEDIA MANAGER not have imagined that our Elena Leontiou experience with the corona- BUSINESS CONTENT ADVISOR virus would be immediately Antonis Antoniou followed by an enormous hu- SENIOR EXECUTIVE EDITOR John Vickers manitarian crisis, this time brought about by Russia’s invasion of Ukraine, which continues EDITOR-IN-CHIEF to cause geopolitical and financial uncertainty across the world. Artemis Constantinidou For this edition of WM, we have interviewed experts and professionals who discuss the glob- JOURNALISTS Adonis Adoni al impact of the Ukrainian crisis and its effect on various sectors of the Cyprus economy. Marianna Nicolaou Athena Yiazou The topic also formed a major part of a discussion (see ‘Business Talk’) between Finance ART DIRECTION Minister Constantinos Petrides and a select gathering of businesspeople. Moreover, it nat- Anna Theodosiou urally arose at an informal gathering of members of the Cyprus-UK Business Association SENIOR DESIGNER Alexia Petrou at the UK High Commissioner’s residence in Nicosia, at which bilateral and trade relations GRAPHIC DESIGNERS between the two countries were discussed. Anna Maria Michael Stavros Lambrou The adverse events of recent years have undoubtedly influenced investors and HNWIs and PHOTOGRAPHY have taught financial services firms and wealth managers the significance to business resil- TASPHO ience of virtual engagement. Wealth management experts are now called upon to cater to Michalis Kyprianou Giorgos Charal the sophisticated demands of their clients by offering new-era services. If they are to keep MARKETING MANAGER up with trends such as sustainable investing, they still need to provide a personalised client Kevi Chishios experience but one that can be considerably enhanced through the use of advanced technol- SALES MANAGER Neofytos Constantinou ogy. This is noted in a number of articles on Wealth Management, while others deal with SALES EXECUTIVES issues relating to Trusts, Investment and Estate Planning in the new era. Praxoulla Valiandi Andreas Leontiades This 5th edition of WM also includes exclusive interviews with a host of outstanding indi- CONTACT viduals, including the French Ambassador to Cyprus, Salina Grenet-Catalano, Medochemie 5 Aigaleo St., Strovolos 2057, Nicosia, Cyprus Founder Dr Andreas Pittas, NAGA Co-founder Benjamin Bilski and CEO Michael Mi- Mailing address: P.O.Box 21185, 1503, Nicosia, Cyprus lonas, New York-based Senior VP and Global Creative Director at Estée Lauder Companies Tel: +357 22505555, Fax: +357 22679820 Klitos Teklos and LA-based film composer, George Kallis. e-mail: [email protected] www.imhbusiness.com You can also read interviews with four outstanding women at the helm of voluntary organ- isations and take a look at the personal collections of three well-known businessmen. Other lifestyle features showcase art galleries in Cyprus, luxury furniture stores and high-end inter- national chain restaurants. We hope that you enjoy reading the 2022 edition of WM and, more importantly, that by the time the next one comes into your hands, we shall all be living in a much happier, more peaceful world. Artemis Constantinidou CHIEF EDITOR IMH

EDITORIAL |5| Stasandrou and Aphrodite 2, 1060, Nicosia Archbishop Makarios III 227, 3105, Limassol Tel: 22757929 Tel: 25587949





| 8| CONTENTS 90 65 16 120 65 | VOLUNTEERING AND PHILANTHROPY Four Cypriot women on the importance of cultivating a spirit of giving. Contents 74 | Cyprus and High Net Worth Individuals By Valentinos G. Pavlides. ISSUE 5 70 | BUSINESS TALK 1 Business leaders discuss the Ukraine crisis, the economy and 98 entrepreneurship with Finance Minister Constantinos Petrides. 110 88 | Protecting Your Legacy through a Cyprus International Trust By Elena Christodoulou. 12 | A New-Generation Private Banking Model 44 | Investment Funds in Cyprus 90 | The Long and Winding Road to Success By Fokion Karavias. By Konstantinos Xanthis. Interview with Benjamin Bilski and Michael Milonas of neobroker NAGA. 16 | The Ever-Changing Private Banking Landscape 46 | Cyprus International Trusts Bring Wealth 96 | Family Businesses Today: Rising Challenges in a Rapidly Interview with Haris Hambakis. Protection – and Real Peace of Mind Changing Environment 20 | Opportunities for Banks Continue to Arise Interview with Andreas Petsas. By Constantinos Ignatiou, Rebecca Ephgrave & By Demetris Vakis. Simona-Maria Ciurla. 98 | A Deepening Relationship Interview with France’s Ambassador to Cyprus, Salina Grenet-Catalano. 24 | Investment Outlook for 2022 47 | THE COLLECTORS 101 | OBJECTS OF DESIRE Christos Elafros and the Global investment Advisory Division Three businessmen reveal the story behind their Two special stores that can help you turn your house into the team discuss the mid-year investment outlook for 2022. collecting passion and the challenges they faced. home you will truly love. 106 | Putting the Right Money in the Right Hands at the 32 | Sustaining Family Wealth Across Multiple 54 | Medochemie: Where Dioscorides Meets Generations El Greco Right Time By Georgia Constantinou-Panayiotou. By Phryni Yiakoumetti Mina & Natalie Vassiliou Moustaka. Interview with Dr. Andreas Pittas, Founder and 110 | Emotional Connections Executive Chairman, Medochemie. Inytervew with Klitos Teklos, Senior Vice President, Global 34 | Cyprus Macroeconomic Outlook Creative Director at Estée Lauder. By Maria Kasola. 57| Opportunities Beginning to Arise in a 114 | Generational Planning: Cyprus Wills and Trusts Tough Year By Stelios Christophides. 36 | Eurobank Cyprus General Managers 116 | Living the Dream Profiles of four Departments and their respective Heads. By Savvas Theofilou. Interview with award-winning Cypriot film composer George Kallis. 118 | How to Buy Property in Cyprus with Cryptocurrency 38 | Eurobank’s Five-Year Digital Transformation 58 | A Guide to Family Office Planning, Governance By Savvas Savvides. Roadmap and Succession 120 | Power Couple Sharing a Single Path Interview with Spyros Loizou. Gogo Alexandrinou and Charalambos Prountzos on how they By Andreas Yiouselli & Constantinos Yiannikouris. balance challenging careers with their parental duties. 42 | Affluent Banking: Dedicated Personal Services 123 | ART FOR ART’S SAKE for Successful Local Professionals 62 | Form Follows Function Four gallery owners discuss investing in art and enjoying it for its The Founding Partners of UDS Architects on own sake. By Popi Hadjioannou. their cultural influences and the challenge of environmental sustainability. 132 | Real Estate Opportunities: London as an International Investment Destination By Marios Hajiroussos. 134 | BUSINESS TALK 2 In May, members of the Cyprus-UK Business Association met with Chris Barton, HM Trade Commissioner to Europe. 142 | Global Investment Outlook By Loucas Savva CFA. 144 | Finest Dining Fine-dining venues in Cyprus that collaborate with top international chefs.

WELCOME LETTER |9| Dear Friends and Valued Clients, Iam delighted to welcome you to the fifth edition of the Wealth Management journal, which is addressed to delivered good results and has received numerous awards, Eurobank Cyprus Wealth Management clientele. including “Best Private Bank” from numerous independent In this year’s edition, we provide an analysis of Cyprus’ organisations. Our Wealth Management philosophy has been Macroeconomic Outlook, offer an insight into Digital proven trustworthy, well-informed and accommodating to any investment profile. Transformation, and analyse trends and services offered in the I would like to take this opportunity to thank you for your fields of Affluent Banking and Investment Funds. continued loyalty and assure you that Eurobank Cyprus will, Moreover, Senior Executives of the Bank and Eurobank as always, stand beside you. At Eurobank Cyprus we are Group share their thoughts on the present and the future goals committed, not only to the financial success of the Bank and of our Group. its shareholders, but also to the success of our clients. Our During the past two and a half years, global economies have customer-centric approach, complemented by our wide range faced unprecedented challenges due to the pandemic, which of products and services, spearheads our efforts aimed at con- was followed by the war in Ukraine. Despite the uncertainty tinuous development and evolution in accordance with global created by the rise in the price of raw materials, energy and trends, technology and innovation in the Banking and Invest- consumer goods, our clients are always seeking new invest- ment sectors. Our main objective is to constantly improve our ment opportunities, as well as tailor-made financial solutions. products, services and quality of work. Digital Transformation Every crisis has to be approached as an opportunity for future and the simplification of procedures and processes are also of growth. Our main priority at Eurobank Cyprus is to build a great importance and lie at the forefront of our strategy. We relationship of trust with our clients, while recognising their aim to provide a digital environment that focuses on our cli- unique profile and needs. ents and is dynamically oriented to ever-changing market con- Eurobank Group is the only Banking Group in the region ditions. Eurobank has gained a leading position in Cyprus and that can serve Wealth Management clients with a wide range has a firm focus on becoming the best Private Banking service of products and services across four different locations: Lux- provider in the region. embourg, the United Kingdom, Greece and Cyprus. All ser- I hope you will enjoy this publication and thank you for vices provided in the field of Wealth Management fall under choosing Eurobank Cyprus as your preferred banking partner. the umbrella of “Group Private Banking”, thus ensuring the finest quality of service. With its experienced Executives and Michalis Louis Management and their combined expertise, it has repeatedly Chief Executive Officer, Eurobank Cyprus Ltd





| 12 | I N TFEARS VHIIEOWN D E S I G N E R S WE ARE STREAMLINING OUR PRODUCT OFFERING, OUR PROCESSES AND OUR IT SYSTEMS

| 13 | FOKION KARAVIAS A New-Generation Private Banking Model CHIEF EXECUTIVE OFFICER, EUROBANK S.A. We live in risky times. Against this backdrop, wealth management based on tech-driven, human-centric sim- Over the last 15 years, becomes an altogether different and greater plicity and efficiency. We are streamlining the element of uncer- challenge. How to protect assets when mar- our product offering, our processes and our tainty has increased kets and valuations oscillate so wildly? How IT systems in order to ensure that each and exponentially. The to identify the best – i.e. the most appropri- every client will enjoy the same, best-of-class global financial crisis of 2008 was the greatest ate – investment proposals for each client’s service and overall banking experience irre- economic downturn since the Great Reces- worries and aspirations? How to balance risk spective of the country where they choose to sion, almost a century earlier. The outbreak and return? Who to trust and what to avoid? keep their assets. of COVID-19 was the first declared pandem- These are the questions that everyone is ask- We are always there when you need us, for ic since the Spanish flu of the First World ing at the moment and there are no obvious a transaction, for advice or merely for an War and the only simultaneous disruption of answers. update. But you might just want to make a economic activity across the globe and across Eurobank has a long record of providing top move immediately, on your own. Through sectors on record. And, more recently, Rus- service in Private Banking and Wealth Man- our new, upgraded platform, all clients sia’s invasion of Ukraine has brought back agement. But as priorities change and evolve, have unrestricted, real-time access to their the spectre of a major military confrontation we have decided that it is time to reshuffle funds. They also benefit from a wide array in Europe for the first time since World War and adapt our model, in order to address the of banking services, in only a few easy, II. Too many “once-in-a-lifetime” challenges current challenges and best serve our clients. short and secure electronic steps. Unless, are swarming in a short time span. We are leveraging technology to achieve this, of course, you decide mid-way to give us a It is, therefore, not surprising that, currently, introducing cutting-edge digital tools to four call. Or make a video-call to your trusted the main feature of markets and the economy main pillars: upgrading the client experience, private banker. Or, arrange a visit. The is volatility. A number of economic factors using data-driven processes to both serve and choice is yours and, irrespective of stream add uncertainty and suggest that volatility protect our customers, constantly increasing or location, we aim to provide the same ex- is not junctural but, rather, a trait of the client data protection and empowering our perience, the same outstanding service for ‘new normal’ that will stay with us for the people with the best training and operational which you bank with us. You do not even foreseeable future. We have spent the last facilities in order to use all their qualities, need to change the banker you have your decade in an environment of deflation and knowledge and accumulated experience to relationship with, no matter where you are, negative interest rates in all major economies serve the interests of each individual client. no matter where your assets are kept, no and especially in the euro area. Before that, Eurobank is the only Greek bank with a sig- matter what business you want. negative interest rates were largely viewed as a nificant international presence and we offer We are truly grateful for your trust. It is theoretical possibility or, at best, a temporary Private Banking services from Luxembourg, the cornerstone of our relationship and the aberration. Now inflation is back and ram- London, Greece and Cyprus. We are thus reason why, amid the upheaval of the pan- pant, at rates not seen since the early ’70s – a able to provide our clients with more choices, demic, Eurobank Private Banking has been period of economic and financial instability more flexibility in their investments, access able to increase its portfolio and expand its that is still remembered as a negative model. to a wide array of products and services, both client base. Given the economic landscape, And, at the same time, tectonic geopolitical our own and third-party, and consequently this is an outstanding achievement and shifts are having a significant bearing on the ability to differentiate their portfolios and we owe it wholly to our clients. We feel international trade, with a major and pro- efficiently manage risk. This is a unique of- we need to pay back. You do not deserve tracted disruption of global supply chains and fering among our peers and a unique advan- anything less than the best service available a nascent trend to repatriate at least a part of tage that we aim to enhance, thus expanding in Private Banking. This is our aim and the production base that had moved at the our business and benefiting our clients. our promise. peak of globalisation. Our “new gen” Private Banking model is

| 14 | A D V E R T O R I A L PAFILIA PROPERTY DEVELOPERS Creating World-class Destinations for Lifestyle and Investment afilia is the largest privately-owned Our Strengths residential developer in Cyprus, • 45 Years Experience P dedicated to developing world- • 7 Global Offices class properties for personal living • 56 International awards received for our commitment to excellence and investment. Uncompromising • 250+ Landmark developments created across Cyprus and Greece in delivering the best in concept, • 360-degree Property related services design, quality and service, we   continue to transform and set the benchmark for the Cyprus real es- Unrivalled landmarks tate sector. in prime locations Our core development business is enhanced with a collection of Pafilia’s comprehensive developments show diversity in locations and subsidiary companies, services and styles, ranging from contemporary houses, Mediterranean villas and enterprises that cover all aspects of apartments, to integrated leisure resorts, urban towers, seafront properties, property ownership and resident private estates and rare communities. lifestyle needs, including property While our portfolio is diverse, our focus remains on the creation of prime management, rentals, resales and properties with advanced yet timeless architecture that provide an unparal- lifestyle concierge. With our dedicated and highly skilled team, we leled lifestyle for their residents. To this end, quality is at the core of every- assist clients with all aspects of relocation covering tasks such as open- thing we do, from concept to construction and from the partnerships we ing overseas bank accounts, advising on education, healthcare and tax forge to the ongoing service we provide. Each project is built to the highest planning through collaborations with renowned providers. standards and exists as an exemplar of superior living. Exceptional design is our hallmark, and our in-house design team collaborates with some of the most respected architectural practices in the world.

| 15 | OUR FOCUS REMAINS ON THE CREATION OF PRIME PROPERTIES WITH ADVANCED YET TIMELESS ARCHITECTURE THAT PROVIDE AN UNPARALLELED LIFESTYLE FOR THEIR RESIDENTS Destination Projects and duplexes overlooking the golf course. They include a ‘hassle free’ and MINTHIS - Effortless Luxury Living highly attractive investment offer with competitive returns and excellent benefits for the investor. Minthis is an inspiring hillside community, where every inch is in com- plete harmony with its breathtaking surroundings. Perched on a tranquil ONE - The tallest residential hilltop, on a site of 5 million square metres, this Natura 2000 protected seafront tower in Europe land offers true escapism. ONE is 37 storeys of exceptional seafront living, offering exclusivity and The collection of award-winning luxury residences, villas and suites was rarity. ONE offers its international residents an elegant luxury lifestyle with conceived by world-renowned architects, Woods Bagot. With boutique privacy and discreet freedom. At the same time, it gives the Limassol sky- accommodation, exquisite hospitality services, a championship golf course, line a striking new definition that is recognised from anywhere in the city. a vast range of onsite experiences, a stunning 12th century monastery and At 170m above ground, with 83 luxurious apartments and a maximum of natural environment to explore, Minthis offers a new way of living to its 3 apartments per floor, all properties are exclusive with uninterrupted sea residents. views and have the benefit of private amenities and services. In August this year, we will be launching one of the largest Wellness Spas The construction journey at ONE is complete and delivery to clients has in Cyprus with a unique concept that combines modern medicine with begun. The high demand from clients from around the globe has resulted ancient healing methods using local herbs and plants. in only a few remaining units available for sale. In addition, later this year we shall be opening further facilities such as The The privacy, the outstanding level of finishes and the attention to detail set Plateia, our social square, consisting of a range of dining and shopping this project apart and make is a unique ONE-of-a-kind investment. Prices options, as well as a sports ground with all the outdoor games and facilities start from €1,950,000. you could wish for. Adding culture into the scenery of Minthis, the 200- seat amphitheatre will be ready to host diverse events by local and inter- 2022 – A year of CONTACT national artists whereas the art gallery will be hosting prestigious works of outstanding achievement INFORMATION creators from around the world. These world-class facilities together with the timeless architecture and diverse range of properties give Minthis a This year is a monumental year for Pafilia, with Address: 33, global appeal with many families already calling the resort home. the opening of new world-class facilities at Nicodemou Mylona There are many real estate options at Minthis, the strategy is low-density, Minthis and the completion of ONE. As Street, Paphos, Cyprus guaranteeing exclusivity and long-term property and rental values. The the only developer in Cyprus with two Tel: (+357) 26848800 Residence collections are bespoke detached homes on large plots whilst large scale projects at an advanced The Ridge and Ridge Green offer 2- and 3-bedroom villas, in pri- stage, our long-term strategy and e-mail: vate neighbourhoods, that are ready to move into with prices starting commitment to innovation has [email protected] €1,116,0000. enabled us to strive for excellence, The Ezousa Suites start from €783,000, they are a unique resort and whilst our comprehensive services Website: investment offering that provide contemporary two-bedroom apartments provide peace of mind to investors. www.pafilia.com Contact us today for more information.

| 16 | I N TFEARS VHIIEOWN D E S I G N E R S

| 17 | HARIS HAMBAKIS The Ever- Changing Private Banking Landscape Haris Hambakis, CEO of Eurobank Private Bank Luxembourg and Head of Eurobank Group Private Banking, explains how innovation, including New Generation Private Banking, is building on the bank’s long tradition of providing High Net Worth Individuals and Institutional Clients with a one-stop shop for high-quality services. For many years, Eurobank Private Bank- ing has been ranked the top private bank in Greece and Cyprus by well-respected THE BIGGEST international magazines. How did you ADVANTAGE OF manage that? There is no doubt that awards are a measure PRIVATE BANKING of recognition, respect and continued suc- IS TO HAVE cess. Not surprisingly, all successful private banks have certain values in common, which H A DEDICATED are distilled in a set of simple practices that ow important is the Private Banking func- PERSON OR TEAM guarantee sustainability, progress and growth; tion to Eurobank Group? THAT ALREADY the pledge to do what’s best for the client no matter what, the financial knowledge and Wealth Management has been an integral part of our philosophy and strategy since the KNOWS YOUR well-versed investing experience, the integrity establishment of the Group and it has con- CIRCUMSTANCES and accountability of the advisors, the quality and timeliness of service, the passion and sistently been a central pillar, contributing significantly to the Group’s results. Over AND CAN GUIDE commitment. Once the foundation is there, the years, we have had a solid track record YOU THROUGH everything else will fall into place, including good results, awards, acknowledgement and of successfully growing this business and effectively establishing our reputation and, YOUR WEALTH progress. for this reason, we take immense pride in our MANAGEMENT What are the core services and products Private Banking offering. We have always JOURNEY that Eurobank Private Banking offers?  strived to become better, stronger and wiser, Private Banking has global access to services especially during the tough times. We have IN A PRIVATE, and products that cover a wide range of fi- succeeded not only in surviving the chal- RESPONSIBLE AND nancial solutions. Our offering is based on lenges that have come our way but we have the concept of a one-stop shop for our clien- also emerged from those difficult years most DISCREET MANNER tele, which consists of both High Net Worth promisingly. Individuals (HNWIs) and Institutional

| 18 | I N T E R V I E W Clients, offering them banking, necessary soft skills. Over the financing and investment servic- last few years, the interplay es. Our product base includes OUR AIM IS TO with clients has transformed deposit products, notice accounts, from purely transactional to BECOME THE current accounts, term deposits, relationship-based, and from fiduciary fixed deposits and var- STRONGEST PRIVATE selling a product to solving the ious types of credit facilities and BANKING SERVICE ever-changing client needs. loans. In relation to the latter, Considering that the develop- PROVIDER IN THE we offer bespoke financing solu- ment of new technologies is one tions, which cover personal needs REGION of the most important trends (including housing loans), prop- currently affecting the industry erty acquisitions and investment and given that communications loans in Cyprus, Greece and the have shifted to the digital ap- UK. On top of the traditional banking products through proach, especially due to the pandemic, the role of the Eurobank’s Private Banking, we offer the full spectrum Private Banker has evolved accordingly in order to match of investment services of the highest standard. Through the new reality and requirements. However, despite this highly experienced Investment Advisors, we offer access shift to the digital era of virtual meetings and robo-offer- and technical know-how, covering the entire range of ings, the biggest advantage of Private Banking is to have a investment products on a global scale, including equities, dedicated person or team that already knows your circum- bonds, mutual funds, ETFs, alternatives, commodities, stances and can guide you through your wealth manage- currencies and structured products. The Global Trading ment journey in a private, responsible and discreet manner. Desk operates during extended trading hours (9:30am- 11:00pm), which facilitates transaction execution in all What is your vision for the future of Eurobank’s Pri- the main European, US and Asian markets. Our clients vate Banking function?   have the option to select among Execution, Advisory and We have long provided our clients with dedicated service Discretionary services. Through Execution services, the and advice. Our offering combines the benefits of being client personally selects each investment instrument and part of an international financial group with a business we facilitate execution through our extensive network of model focused on building strong personal relationships. brokers and asset managers. Through our Advisory servic- Our Private Banking presence in 4 locations (Greece, Cy- es, our experienced advisors guide clients on tactical asset prus, Luxembourg and London) connects us under a stra- allocation as well as on individual security selection, while tegic umbrella that makes the most of our offered services our investment strategies take into consideration the and we have been consistently building on this advantage. unique characteristics of each client’s investment objec- To address the new digital era, for the past two years, the Divi- tives and risk appetite. Through our rounded Discretion- sion has focused on the implementation of our “New Gener- ary services, we work with clients to establish appropriate ation” Private Banking, which aims at business simplification financial targets and suitable levels of risk, which means and the alignment of products, processes and IT systems, thus that tactical asset allocation, as well as the selection of ensuring the best experience for our customers. This trans- investment products/securities to construct the client’s formation project has been deployed and is expected to be portfolio, are decided through our specialized subsidiary, fully operational soon, so as to further enrich our services Eurobank Asset Management. in the four locations in which Eurobank Group Private Banking is present. Shared digital and high-quality expe- What is the role and function of the modern Private riences will be offered to all Private Banking customers, Banker serving HNWIs? How has this role evolved in regardless of where they wish to retain their investment funds. recent years, given the changing needs of this clien- Our dedicated Private Bank in Luxembourg will play a tele? pivotal role in the new era, since it will enable our clients The Private Banker is essentially the single point of con- to embrace its prestige, expertise and quality of services, tact between clients and the bank and will, at all times, as well as the low country risk it enjoys. By moving to this act as the facilitator who will leverage channels to deliver new architecture, we trust that we will best manage areas services or advice to clients with added convenience. It such as agility, productivity, optimization of operations, is a role that requires a combination of analytical ability, transparency, risk reduction and economies of scale. Our expertise, diverse and comprehensive market knowledge, aim is to become the strongest Private Banking service technical competencies, detail orientation, as well as the provider in the region.

i XT H E

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| 21 | ANDREAS PETSAS opportunities for banks continue to arise higher costs. As a bank operating in an action on cost-cutting, price adjustments importing economy, we could not remain and marketing direction as rapidly This is the view of unaffected. However, the direct impact changing parameters affect profitability Andreas Petsas, Senior General on the Bank’s operations, due to Russian/ directly and immediately. Manager, Eurobank Ukrainian risk, has been very limited and Cyprus, who reveals some of no worries have arisen on that front but it What are some of the most significant the Bank’s plans is still being closely monitored. The effects challenges facing Cyprus’ wider bank- for the future while explaining of this crisis may impact us indirectly ing sector? Alternatively, what are some how Cyprus’ through our local clients and any negative of the most lucrative opportunities banking sector has managed to remain impact that the crisis may have on them. available within the local banking in- strong and can These will arise due to the challenges that dustry? continue to do so. the tourism industry is facing, with the Banks, with the guidance of the regula- Photo by TASPHO loss of 15-20% of its clientele for this tor, have adjusted over the years to be H year, higher energy costs and increases able to deal with various emerging crises. as Eurobank Cyprus been affected by the events in Ukraine? in the prices of all materials and end This is why today we have such a strong If yes, what steps have been taken to cushion the impact? products. These will impact most sectors banking sector in Cyprus. Things that The events that are taking place in Ukraine have affected the whole and threaten the profitability of many are exogenous, like a pandemic or geopo- planet but especially European countries. The already problematic companies. When profitability suffers, litical turbulence, are beyond anybody’s supply chain for a number of products (due to COVID-19) cash flows become stressed, control, but the has been doubly hit, and with repayment ability may be EUROBANK banks still need to affected and extra care is CYPRUS WILL have the cushions to needed by companies and absorb these shocks banks alike to overcome CONTINUE to a great extent. An this threat. At Eurobank TO SERVICE all-time challenge for Cyprus, the actions THE CLIENT the banks is deter- we are taking in BASE THAT IT this challenging mining the size and quantity period are HAS ALWAYS of resources not very TARGETED AND employed in different from CONSTANTLY the sector, in those we took in relation to the size the past or any of SEEK NEW of the economy and those that will be taken AND MORE the pace at which in the future. We stay EFFICIENT it is growing. The close to our clients, we CLIENT SERVICE speed at which the become more demanding CHANNELS banks adjust and in requesting reports and simplify processes financial information from and procedures must them that will indicate the be in line with their possible impact on cash flows, and we try technological advancement (digitalisa- to find the right solutions where feasible. tion). This is an important challenge that We encourage our clients to take quick points to the ability to adjust (or retrain)

| 22 | I N T E R V I E W human resources, otherwise the client ser- THE SPEED Despite the success of Eurobank in the vice model is at risk. On the credit risk side, AT WHICH retail banking sector, Eurobank Cyprus there is definitely appetite from the sector to THE BANKS has not followed this path. Is this situation grant new loans, supported especially by the ADJUST AND permanent or could Eurobank Cyprus also excess liquidity that all the banks have. But target retail customers in the future? this comes at a challenging time, due to the SIMPLIFY From the start, Eurobank Cyprus’s model has points mentioned before, so careful future PROCESSES been directed at wholesale banking, which in- cash flow planning (on the part of borrow- cludes corporate banking, wealth management, ers) needs to be in place so that these assets AND business banking with international companies (loans) are resilient and remain viable. This, PROCEDURES and treasury operations. In recent years, we in conjunction with an expected increase in MUST BE IN LINE have added affluent banking – a form of per- interest rates, puts an extra challenge on com- WITH THEIR sonal banking that is not offered to mass retail pany cash flows and subsequently increases TECHNOLOGICAL customers – to our lines of business. We are not their credit risk (threatening the banks’ ADVANCEMENT looking at personal retail banking in the form balance sheets with new Non-Performing (DIGITALISATION) that the market here has known it in the past, Exposures – NPEs). On the other hand, an i.e. with numerous branches, clients standing interest rate increase after many years creates new clients are arising in a number of energy in long queues, etc. We believe that any future an opportunity for the banking sector to projects, hydrocarbon service-related indus- personal retail banking must grow through move into more profitable results. This will tries, trade and shipping. Given the contin- electronic or digital channels. Tomorrow’s retail be achieved based on the extent to which uous interest shown by foreign investors in clients are becoming more and more digitally a correct cash flow analysis has been made the aforementioned industries, opportunities literate and they do not have the time, the ap- during the lending procedure and it will de- for banks continue to arise all the time. A petite or the nerve to stand in line in a bank! termine which of the two forces will prevail multifaced opportunity for banks, and one (rising income vs NPE formation). NPEs are without limits, stems from the technological What are some of the Eurobank Cyprus’ the greatest threat against any bank’s profit- revolution that never decelerates. In the past, other development plans for the coming ability, especially having the country’s past banks were opting for new technology to do years? experience in mind. their job better and quicker. Nowadays, the Eurobank Cyprus will continue to service A third important challenge, which also has dynamic has been reversed. Technology, with the client base that it has always targeted to do with the size of the sector and the re- the accelerated change and new products that and constantly seek new and more efficient sources employed, is the increasing amount it brings to the game, is forcing the banks to client service channels. The Bank is currently of regulation. This is exerting upward pres- speed up, become digitalised, reshape their reaching the end of a significant investment in sure on the costs of banking institutions and models and strategies or stay behind and sink technology. When this project is completed, it is becoming increasingly more difficult to among high-cost models and structures. Pay- we believe that we will be able to improve our manage these costs, especially for the small ments systems, electronic banking, mobile service, our products and service channels. To banks. I believe that the banks that manage applications and more are showing the way this end, we will continue growing and offer- to control their costs and face these chal- forward. More people and companies can ing the best we can to the economy. lenges are the ones that will take advantage now work remotely and want their banking The resilience of our economy over the last of the opportunities. It is crucial, then, to to be conducted in the same way, leading few years, the high quality of our business be in a good position, both operationally the banks towards a more efficient and low- community, the strong and dynamic work- and balance-sheet-wise, in order to exploit er-cost model. force and the influx of foreign investment these opportunities. In my opinion, there are has given us over and over again the comfort always opportunities in every sector of the of knowing that we can face any economic economy, provided that a case/transaction is challenge that hits us from outside. This, correctly structured, has the right amount of combined with the operational capabilities of equity by the entrepreneurs and shareholders our Bank, stemming from the high quality and sufficient cash flow. Tourism is – and I and great efforts our staff, will lead us on a believe will remain – the number one pillar successful journey, despite any difficulties on driving our economy but opportunities for the way. TOMORROW’S RETAIL CLIENTS ARE BECOMING MORE AND MORE DIGITALLY LITERATE AND THEY DO NOT HAVE THE TIME, THE APPETITE OR THE NERVE TO STAND IN LINE IN A BANK!



| 24 | G L O B A L I N V E S T M E N T A D V I S O R Y D I V I S I O N Global investment Advisory Division (gad) Eurobank’s investment strategy team was founded in 2002. The team was revamped into its current form in 2010, when the Global Investment Advisory Division (GAD) was introduced, a cross-asset team which consists of five highly experienced professionals from the financial sector. GAD is an integral part of Eurobank AM MFMC and has an active role in the formulation of investment strategies. The team brings together several decades of combined global market experience in Greece, the US and the UK, spanning strategy, portfolio management and trading positions in foreign exchange, fixed income, equity and local currency markets, both in cash and derivative instruments. The team is also responsible for the cross-asset research and the definition of the house view on asset allocation. The team’s leadership role in the asset allocation process goes full circle during the bi-weekly investment committee meeting attended by the leading specialists of the Eurobank Group from fixed income and equity investment management, economic and equity research, structured products, FX desk and fund selection.

Christos Elafros, Head of the Global investment Advisory Division, discusses the mid-year investment outlook for 2022 with the team members. Christos Elafros: Let’s start with Mi- Although the impact of the pandemic recession. However, a global economic chalis Lambrianos, the Chief Economic is waning across most regions, its future recession is unlikely to unfold over the Strategist of the team. It seems that the course remains uncertain in China, whose second half of the year, as the monetary global economy is facing some signif- zero COVID-19 policy is resulting in and fiscal stimulus measures delivered icant challenges. How do you see the regional lockdowns. The supply bottle- during the period of the pandemic were outlook developing over the course of necks initially arising from the pandemic significant enough to keep the global the remaining year? have now been exacerbated by the Rus- economy afloat even this year. In the Michalis Lambrianos: After experiencing sia-Ukraine war. As a result, central banks end, persistent inflation and supply one of its fastest paces of growth in 50 have made a dramatic shift in their policy, shocks mean that growth will be below years, the global economy is set to slow as their mandate is strictly focused on rein- the pre-COVID-19 trend. down sharply in 2022, as it faces signifi- ing in inflation. Macroeconomic activity cant challenges from stagflationary forces. is slowing and possibly veering toward a Christos Elafros: The expectation at the end of last year was that price pressures would moderate in 2022. Has this outlook changed? Michalis Lambrianos: Inflation is currently running at its highest pace in over four decades. Moreover, it is expected to remain high for longer than the markets and policymakers were ex- pecting. The main factors shaping the baseline inflation outlook are the spill- over effects from the high commodity prices and supply disruptions resulting from both the war and lockdowns in China. The duration of these factors remains unknown and has the potential to sustain a high level of uncertainty in inflation forecasting. Complicating mat- ters is the fact that the stagflation shock is uneven across regions. In the US, the energy shock is smaller, as it is no longer a significant net importer of energy, labour markets are tight. Wage growth is rising in an attempt to catch up with consumer price inflation and, therefore, cost push inflation is significantly more prevalent. In the euro area, energy ac- counts for the vast bulk of the increase in the HICP inflation rate since January 2021. The reason is the unhealthy reli- ance on the supply of natural gas from Russia. However, there is no meaningful second-round effect on wages. Inflation is much less of a concern for China, since it has entered a slowdown and is at risk of a recession. Τhe impact of these exogenous shocks differs among emerging economies, depending on whether they are commodity net exporters or net importers or net importers.

| 26 | G L O B A L I N V E S T M E N T A D V I S O R Y D I V I S I O N Wage growth is rising in an attempt Christos Elafros: Given the persistent to catch up with consumer price inflationary pressures, how do you see INFLATION and, therefore, monetary policy evolving? cost push INFLATION is SIGNIFICANTLY Michalis Lambrianos: The pace of more prevalent monetary policy adjustment differs MICHALIS LAMBRIANOS among the central banks as the inflation- ary shock has been unevenly distributed. Last year, peripheral central banks, espe- cially those in emerging markets (EM) where inflationary expectations are gen- erally not well anchored, were badly af- fected. The angst eventually spilled over into the G10. Developed market central banks are now hiking. In the US, the Fed is engaging in one of its most aggressive tightening cycles since the Greenspan era. However, it is adopting a gradual approach. The Fed’s aim is to transition its policy in order to quell wage growth pressures without creating undue eco- nomic and market stress and hopes that price pressures from exogenous factors will moderate. If supply-driven price pressures show signs of easing, then the Fed will ultimately reach a fund rate of 3.25%. If inflation proves to be stickier than expected, it may possibly raise the Fed fund rate above 3.50%. Most cen- tral banks share the same concerns, but the path may differ depending on the idiosyncratic dynamics of each economy. There are the exceptions. The ECB is a notable laggard, Bank of Japan will remain on hold as wage growth remains elusive, while the People’s Bank of China is an outlier as COVID-19 restrictions have curbed demand. Christos Elafros: Let’s continue with Platon Chaldeos, Chief Investment Officer of the Group for fixed income, to discuss the main drivers influencing bonds. Platon, after a mildly negative 2021 for bonds, we have seen a major selloff so far for 2022, what are your thoughts?  Platon Chaldeos: 2022 so far has been a nightmare year for bonds and the picture does not look like changing soon. After exiting the two-year COVID-19 volatil- ity period, we have entered a new phase where the consequences of Russia’s inva- sion of Ukraine have altered the global energy map and disrupted the global grain trade. High inflation continues to be at the forefront, driven by increased energy and commodity prices. As the

Fed began raising rates, short term USD bonds were hit Core eurozone first, not acting as safe havens in this turmoil. All tenors sovereign yields can are suffering with 30yr performance YTD touching a now be a part of our massive -23.8%, while 10yrs Treasuries are retreating by investment platter, as they -12%. Broad Investment Grade corporates are -12.8% are decisively moving into as of 10/6 with the US high yield outperforming at -9%. Emerging markets are following with sovereigns drop- positive territory ping by -15.6% while corporates behaving more defen- PLATON CHALDEOS sively at -11.4%. European bonds are following, with sovereigns retreating by -12.8% while broad investment European corporate and HY spreads. Their YTD underperformance grade euro corporates are down by -12.8%. is mainly due to the core rate moving upwards and secondarily to widening. Nevertheless, there is room for underperformance in case Christos Elafros: What is your outlook for fixed in- economic growth projections falter and equity volatility elevates. come asset-class overall and sub-asset classes for the rest of the year? Platon Chaldeos: While most Fed actions are discount- ed and have been driving US rates so far, ECB actions are now unfolding and ready to offer more pain through higher euro rates. Nevertheless, there is always the fear of a policy mistake and that doing too much tightening might drive the economy into a recession, since this inflation episode is being driven by supply chain dis- ruptions. As a result, bonds find themselves in a wedge between stagflation and the prospects of a hard landing. A lot is priced in the USD curve as the Fed has been more vocal managing expectations and the treasury curve has reacted to that. After the FED delivered a 75 bps in its June meeting the market is pricing in an additional 200 bps by year end. We view that the longer-term rates, especially the 10yr trading range, will remain at 3.0%- 3.5%, while the damage done on the short end of the curve is excessive, rendering the 2-5yrs area attractive. They are considered a safe pick since their duration risk is low. Corporate bond spreads have widened as the higher cost of borrowing is expected to impact bond issuance and balance sheets. Currently the impact is being felt to a greater degree on the higher yielding corporate bond spectrum. The 10yr Baa USD bond spreads have ap- proached 240 bps from last year’s lows of 160 bps and are now trading around 200 bps amidst restrained global issuance. US high yield spreads have propelled to 540 bps from a low of 217 bps last year. We continue to see very little value in both the high yield and high grade bonds at these levels as the prospects of a recession is in- creasingly becoming a probability. At the ECB meeting, the termination of the APP pro- gramme was announced, with 25bps tightening in July to be followed with 50 bps in September. European periphery, which was the main beneficiary of the PEPP programme, is now exposed to volatility and higher en- ergy prices, with spreads widening to their highest levels in 2 years. It is especially painful on Italy and Greece, which are among the most indebted economies. Spread between Greece vs Italy remains steady at 50 bps. Indica- tions are that the periphery will be hammered unless the ECB presents a credible bond spread control mechanism. High energy prices and recession fears have affected

| 28 | G L O B A L I N V E S T M E N T A D V I S O R Y D I V I S I O N We have been late cycle for some time now and high valuations in mega-cap growth and tech stocks are now DEFLATING PEPI TATAKI Christos Elafros: Let’s move on to Pepi Tataki, the equity specialist of the Christos Elafros: Following the significant price correction, do team to discuss the developments in equity markets. Pepi, what are the you think we have reached an attractive entry level for equities? main characteristics of equity markets so far in 2022? Pepi Tataki: The length of the correction will be determined by Pepi Tataki: The markets cannot always be calm and rising. Investors should EPS growth estimates as valuations have already corrected. We have expect periods with uncertainty and this year is characterized by a great one. In been late cycle for some time now and high valuations in mega-cap the end, during periods of uncertainty and volatility, portfolios can find bigger growth and tech stocks are now deflating. Thus, in terms of PE, investment opportunities. Since March, geopolitics have come to dominate global equities have derated to 15.6 times earnings from 18.5 times monetary policy and the hope of containing inflation with a normal, moderate since the beginning of the year but 2022 EPS growth estimates are cycle has vanished. As a result, equities have been drifting lower as negative risks still positive, leaving them vulnerable to downgrades. This raises the have risen and sentiment is turning bearish. For now, the global economy is risk of another correction if there are significant negative revisions to moving quickly towards a later-cycle phase, as bond rates have already adjusted. H2 earnings projections. Under a more adverse scenario, valuations Global PMIs are decelerating as are global consumer confidence measures. Cost offer little protection, as they are still well above levels reached during pressures remain an issue for corporates around the world and there are rising recessions, and earnings would likely have a material downside risk risks to margin expectations for the coming quarters amid sticky input and in this scenario. So far, there are no signs of the typical hallmarks of labour costs. For the consumer, higher inflation is equivalent to higher taxes. a recession, such as widespread corporate risk aversion driving cuts At the same time, the Federal Reserve has embarked on an aggressive monetary in payrolls and capital spending. Household and corporate balance policy tightening path in an effort to fight inflation and fiscal support will be sheets remain in relatively good shape, and income and spending are limited and more targeted, given the inflationary pressures. Equities will also be resilient. However, inflation is proving sticky and the Fed’s forward tested by lower liquidity by the Fed, the opposite of what markets have been guidance is for a rate hiking cycle that has historically ended in reces- used to since the Global Financial Crisis. sion more often than not (8 of 11 times or 73%). Christos Elafros: What is the single most important factor that will dictate Christos Elafros: So, what is your preferred investment strategy the risk appetite for equities? relative to equities for the rest of the year? Pepi Tataki: No doubt, much will rely on the Fed. Fed members are moving Pepi Tataki: There are many moving parts that complicate the H2 to a more restrictive stance. Policymakers are aiming to reach the estimated outlook: developed economies still reopening after COVID-19, the neutral level as early as possible. At that point, the level of inflation will dictate employment market in the US is too tight, inflationary pressures how much more tightening is necessary. Until then, the Fed and the markets persist, central banks are very hawkish, China is persisting with will continue to hope that inflation can be brought down without much pain its zero-COVID policy and, on top of all this, geopolitical risks for employment and for the economic cycle. Therefore, a new bull market may are present, exacerbating the rally in commodities. Predictions not return quickly. A peak in inflation and a lower level of inflation volatility are much more difficult with all these changing risk factors, thus may be needed. Hence, what matters is by how much and how fast inflation volatility has moved to higher levels as the market is trying to di- declines, and whether a soft landing can be engineered. gest a very different environment compared to what we were used to in the past decade. We continue to favour being defensively positioned in global equities with an underweight exposure. The current environment still points to a soft landing and, therefore, we would not eliminate equity exposure, awaiting better entry levels. At the same time, we believe that opportunities will arise if market participants start worrying about recession, thus some liquidity should be present in their portfolios. Finally, the investment hori- zon is important for equity investments; an average bull market has a return of 198%, so adopting a long term strategy will allow the portfolio to grow.

Christos Elafros: Let’s conclude our mid-year outlook views with the war came to raise supply Christos Tsenes, our FX and commodity specialist. Christos, can worries and add further you briefly describe the impact of the Russia-Ukraine war on disruptions to the supply commodities and energy in particular? Christos Tsenes: At the beginning of the year, global demand for chain, raising the cost of raw commodities was seen as resilient since global growth was showing materials across the board signs of strength. Then the war came to raise supply worries and add CHRISTOS TSENES further disruptions to the supply chain, raising the cost of raw materials across the board. Oil and energy prices have skyrock- to the equation the higher frequency of severe weather conditions due eted by 50%-130% since the beginning of the year. The reasons to climate change and one can see why a higher-price equilibrium are well-known: trimming – and in some cases zeroing – oil may be building up for soft commodities, inspite of the slowdown in and natural gas imports from Russia due to sanctions, a limited the global economy. We would be buyers of a dip in agricultural pric- willingness by OPEC to sustainably raise production quotas, es, mainly to hedge the rest of the portfolio. increases in selling prices by Saudi Arabia to its Asian custom- ers, to name just a few. At the same time, more 'green and ESG Christos Elafros: We started the year with a long position in the friendly' capacity cannot fulfill demands from lost supply from US dollar. Do you maintain this stance? fossil fuel energy. The Europeans are now seeking new markets Christos Tsenes: Despite the US dollar posing as overvalued across such as the US for natural gas, and Venezuela and Iran for oil. the board, it has gained significant ground in the first semester of In an effort to address the issue, the US is tapping its Strategic 2022, as it has been the most effective hedging instrument against the Petroleum Reserve. Regardless, the level of supply remains short war. With respect to the euro, in the short term, central bank policy of demand and the uncertainty regarding the timing of the en- divergence, yield differentials, and/or momentum seem to matter ergy market's normalization implies that oil prices will remain more as markets keep USD expensiveness in the background. Even at elevated and hover around 110 - 120 $/bbrl. Supply will most current levels, the US dollar is expensive against the euro, hence the probably remain tight for the coming months, offering no opti- euro should appreciate. In the FX world, however, such long-term mism that prices will fall. We still like oil as a hedge for a port- misalignments might take quite some time to correct. In this new era, folio. Rate hikes by most major and minor central banks and a current levels can no more be characterized as extreme, even as profits loss of consumers’ purchasing power all point to downside risks from this hedging instrument are significant. We do not fear EUR/ to growth. This could drive net demand for oil into negative USD parity but further depreciation looks quite difficult. territory – hence, oversupply – and some decompression in en- ergy prices. Still, prices could test higher levels, before ultimately heading lower at a later stage. Christos Elafros: Gold traditionally offers protection in this kind of environment but this time seems to be different. What are your thoughts? Christos Tsenes: Gold initially gained ground as the war raised interest for safe havens. Nevertheless, persistent inflationary pressures have capped any sustainable upside potential. For the rest of 2022, the two main drivers for gold valuations remain the US core rates and the US dollar. The appreciation of the US dollar and central bank determination to fight inflation continue to keep the upside potential contained, rendering gold a sub-op- timal hedging instrument. We need to see a step back in market expectations of upcoming rate hikes for gold to breathe. Overall, we maintain a neutral stance for gold. Christos Elafros: Does grain and food inflation play any role? Christos Tsenes: The war has had a major effect on agricultural commodities as the involved parties are amongst the top global suppliers. Russia is the second largest producer and supplier, be- hind China, of ammonia, which is a primary material for fertiliz- ers. As a result, fertilizer costs have skyrocketed, along with grain prices. This has led the UN Food and Agriculture World Food Price Index to all-time highs. Moreover, some Asian countries are engaged in curbing exports to protect domestic supplies. Add





| 32 | W E A L T H M A N A G E M E N T SUSTAINING Inthe face of elevated uncertainty in eco- FAMILY WEALTH nomic and many other areas, and the drive for growth, businesses must remain ACROSS ahead of the curve and effectively plan MULTIPLE for all eventualities. As the so-called baby GENERATIONS boomers – the wealthiest generation in history – prepare to pass on a tremendous amount of accumulated By Phryni Yiakoumetti Mina, wealth to the next generation, we need to ensure that this happens Director, Private Wealth Services PwC Cyprus and in an effective and organised manner. A fundamental starting point is to have a clear view of the family’s Natalie Vassiliou Moustaka, wealth philosophy. As such, when we are first approached by pri- Senior Manager, S.A. Evangelou And Co LLC, vate business owners and other High Net Worth Individuals (HN- the PwC Network Legal Practice in Cyprus WIs) and families, we seek to understand or help them articulate their aligned wealth philosophy. Arriving at a shared wealth vision helps create a sense of alignment, commitment and ownership among all family members. Such discussions need to take place from time to time, as things evolve. Indicative of changing mind- sets is the fact that, according to the recently launched PwC Family Office Deals Study of 2022, whilst owning families were more actively looking to retain and pass on their businesses to the next generation, the number of disposals during the year underlined that selling the business – including to other family-owned entities – is becoming an option for families when it comes to how they manage their family wealth. Preparing and planning for the future Gone are the days when business owners only needed a family wealth management strategy to map how their property and assets would be divided after they’re gone. Family wealth planning is so much more, as it helps business owners prepare for various scenari- os, which is vital in such unprecedented times, and simultaneously it allows the next generation to preserve and grow the family’s wealth in the future, including possible disinvestments in tradition- al family businesses and investment in new ventures. As advisors, we work with the family to identify their needs and concerns as well as their objectives. We prepare contingency plans for various scenarios which are especially important in times of un- certainty and socio-political/financial turbulence. We help families create a solid yet flexible framework for asset protection, succession planning and wealth restructuring, allowing them to seamlessly transfer their wealth or business leadership to the next generation. CREATING A FAMILY WEALTH PLANNING STRATEGY IS A VERY COMPLEX AND OFTEN SENSITIVE PROCESS. AS SUCH, WE CONSIDER THE FOLLOWING TO BE IMPERATIVE (THE LIST IS NOT EXHAUSTIVE): • Wealth management: The landscape in Family Office invest- ments seems to be changing. The PwC Family Office Deals Study of 2022 indicates that, whilst in 2020 there was a temporary de- cline in transaction volume and value, the value of disclosed family office deals in 2021 reached record high levels. The study also shows that there was an increase in club deals. The main drivers behind the rise of club deals are the increasing size of investments – meaning that more investors are needed to contribute the required capital – and the desire to diversify risk exposures. In an uncertain world, Family Offices are increasingly keen to share the risks and

| 33 | rewards around their investments. The increase in transaction volumes GONE ARE THE DAYS WHEN BUSINESS OWNERS ONLY and values, along with new ways of investing such as club deals, appears to NEEDED A FAMILY WEALTH MANAGEMENT STRATEGY be aligned with the overall strategy of families, which focuses on growth. TO MAP HOW THEIR PROPERTY AND ASSETS WOULD BE In the PwC Global Next Gen Survey of 2022, 65% of respondents noted that growth is a top priority. DIVIDED AFTER THEY’RE GONE • Asset planning and protection: We provide a tax and legal analysis and Family governance comes in to help set boundaries, create clarity and facil- help the family comprehend the tax and legal implications of their situa- itate harmony among family members, even around sensitive topics and, tion. We support them in deciding their next steps based on their specific in parallel, to foster transparency and accountability. It is no exaggeration objectives. Does the family have assets and businesses in multiple juris- to say that when intergenerational wealth transfers fail, this is often the dictions? Where are the family members located? Is an exit plan required? result of poor trust and communication and can result in catastrophe. Is there a need for additional arrangements? Could they benefit from the As such, it is imperative that each family carefully weighs its options and creation of more stable structures (i.e. Trust, Foundation, Company Lim- chooses the governance mechanism that is best suited to its needs, opting ited by Guarantee, Fund)? Are there jurisdictions that are more suitable for simplicity and flexibility. At the same time, it is important to regu- than others for establishing such structures? larly consider the strategy’s effectiveness, adjusting when necessary. Ex- amples include a set of Shared Values or Common Vision, Shareholders’ • Planning for the day after: The day after is often too much to think Agreements and the right Board Constitution for the Family Office/ about. However, with our vast experience and ability to connect, we can private structures, conducting family meetings/retreats and establishing help remove this burden to enable our clients and their families to feel in policies for family employment/assessment, etc., but such a list is certain- control. What plans need to be implemented to deal with these eventual- ly not exhaustive. ities? If a plan is already in place, the family may benefit from setting up a mechanism for its regular revision. Cyprus: A preferred jurisdiction for a second base • Leadership succession planning: We encourage families to prepare an Setting up Family Offices has become common practice for family-owned enterprises in the West, while in recent years it has been becoming increas- integrated succession plan, which may include preparing the next genera- ingly prominent in other parts of the world. tion of family leaders or non-family leaders from early on, long before the Just as every family is unique, no Family Office is the same as another. business leader retires and passes on control. The family’s younger mem- However, no matter the size of the Family Office, it can evolve into a bers need to become stewards of the family wealth but, in order to do so, powerful wealth planning platform, comprising contingency planning, they need to understand how the family created its wealth and how capital succession and estate planning and asset protection with one ultimate goal: moves within the systems that were created by the older generations. We to support the growth and protection of family wealth across different help them become good stewards, even if they decide not to take an active generations. role in managing the family business and its wealth. Among other things, Cyprus is an increasingly popular jurisdiction, which can serve as a safe we help clients decide which key positions will need to be taken up by and stable secondary home for families. Combining excellent education employees outside the family and whether shareholding should be open to and healthcare services, a cosmopolitan lifestyle, EU membership, a legal non-family members. framework based on the English Common Law system, a strategic loca- tion, reasonable taxation and a wide double tax treaty network, investor- • Philanthropy and impact investing: It is important to have a clear and business-friendly migration rules, it is an ideal secondary base for any strategic plan – covering the family, its businesses and the Family Office in family. Moreover, it offers a wide array of options on succession planning relation to ESG, philanthropy and impact investing, and philanthropic en- and asset protection structures (such as the Cyprus International Trust, tities in place – to help the family meet its goals. How can the family give Cyprus Funds, Cyprus CLGs), and a high quality of professional services back to society and become more socially responsible, whilst sustaining its at competitive rates, compared to other EU jurisdictions. legacy and achieving its growth targets? With more than 40 years of experience in supporting family businesses and High Net Worth Individuals from around the globe, we understand that • Technology: We help the family tap into the benefits of technology, by a family’s business and wealth is its legacy. We support HNWIs looking towards the future by helping them assess risks and eventualities, as well moving ahead with the digitization and process automation of its family as truly examining options from various angles, in order to provide them office/business. How can the family ensure that its affairs are private and with the confidence to take the best possible decisions for their family and confidential? How can the family share information related to its wealth, in business. We bring to the table well-tested global tools and methodologies, a timely and transparent manner among members and key associates (e.g. such as PwC’s Family Office Diagnostic Tool and the Wealth Compass, trustees)? which are two bespoke tools that we and our clients use as part of their wealth planning and management. Family governance As family circumstances and wealth fundamentals become more complex, it is important to establish the proper frameworks and processes to facilitate the discussion of sensitive topics, such as ownership, rights and responsibil- ities, information sharing, etc.

MARIA KASOLA Cyprus macroeconomic outlook AE C O N O M I C A N A L Y S T , E C O N O M I C A N A L Y S I S & F I N A N C I A L M A R K E T S R E S E A R C H , E U R O B A N K S . A . fter a 5.2% real GDP growth GDP growth forecasts for 2022, as is the case for the entire euro contraction in 2020, the econ- area. The European Commission (EC), in its Spring economic omy grew by 5.5% in 2021, forecast released in mid-May, cut the growth projection to 2.3%, returning to its pre-pandemic from 4.1% foreseen in the winter forecast in February; more level in 2021Q3, despite the lag recently, in early June, the IMF, in the article IV consultation in the recovery of the tourism for 2022, slashed its forecast to 2%, from 3.6% in October. Our sector. Both domestic and ex- 2022 GDP growth baseline scenario aligns with that of the EC, ternal demand contributed to with evaporated tourist flows from and services exports to Russia the rebound, with the former identified as the key drags. By contrast, the expected rebound benefitting from fiscal support of investments, supported by the Recovery and Resilience Fa- measures and a successful vaccination rollout and the latter based cility (RRF) and the Multiannual Financial Framework (MFF), on a bounce by professional and financial services. The tourism comprises a key growth driver. The RRF effect is expected to be sector recovered only partially, compared to pre-pandemic levels, mostly felt from mid-2022 onwards, taking into account the time with arrivals reaching 48.7% and revenues 56.4% of 2019 levels needed for some of the projects to mature. The Cypriot Recovery respectively. and Resilience Plan (RRP) provides for a total of €1.2bn, which 2022 started with a solid economic momentum, as GDP ex- breaks down into €1bn in grants and €0.2bn in loans to be de- panded by 5.6%YoY/1.0%QoQ in 2022Q1, compared to ployed up to 2026, while the funds under the MFF are estimated 5.9%YoY/0.7%QoQ in 2021Q4. However, the geopolitical at €1bn between 2021 and 2027. situation in Ukraine has added uncertainty to the growth out- The labour market remained broadly stable in 2021 with the look. The economy started with a positive carry-over effect into unemployment rate standing at 7.5% and decreasing to 6.6% in 2022Q1 yet headwinds are expected in the remainder of the year. 2022Q1. Yet the slowdown of the economy is expected to cause a The negative spillover from the Ukraine war is expected to be slight spike in 2022, close to 7.7% in our view, given the expect- primarily transmitted through the external demand channel, giv- ed deceleration of tourism, which is a labour-intensive sector. In en that Russians account for more than 20% of tourist arrivals in the medium term, the unemployment rate is expected to recede Cyprus and 20% of the financial services Cyprus provides outside gradually, returning to its historical long-term trend. the EU. In addition, energy and commodity prices, along with Tourism is crucial to the Cypriot economy. The sector contrib- supply chain disruptions, continue to inflate the cost of living uted 13.4% to 2019 GDP, resulting in a stellar year in terms and erode the purchasing power of consumers. In this context, of growth; in 2020, when its contribution diminished to 3.7%, all major international financial institutions have slashed their a 5.2% recession was recorded. The same holds for the labour

C Y P R U S E C O N O M Y | 35 | DESPITE THE CHALLENGES, CYPRUS MAINTAINS UNINTERRUPTED MARKET ACCESS AND INVESTMENT GRADE STATUS market as well, with jobs related to the said sector accounting for 2023 onwards. Certainly, the adverse geopolitical more than 13% of total employment in both 2019 and 2020. Tourist momentum could spur fiscal perils stemming from arrivals between January and April increased more than tenfold on an reduced tax revenues from tourism and pro- annual basis and doubled compared to the same period in 2020, fessional services, posing serious downside when the pandemic had just started to kick in outside China. risks to the budget execution. However, The current level of arrivals so far in 2022 is approaching they will most probably be mitigated 77% of the 2019 figure, based on April’s data, while in by the gradual phasing out of the March the respective figure stood at 70%. All in all, pandemic support measures, although the contribution of the Russian market is resulting in reduced public significant, this performance is not too dissim- expenditure. The outlook ilar from that of competitors. In addition, for external payments April’s data allows for some optimism appears more chal- regarding the magnitude of the hit and lenging, taking into the speed at which Russian arrivals can be account that growth is substituted with those from alternative mar- historically accompanied kets. by trade deficits, due to the Inflation hitting the economy since 2021Q4 is an high reliance on imports of equally important consideration. HICP, after a FY- goods and energy and the deficits 2021 2.3%YoY increase, spiked to 9.1% in May, from in the income accounts. Specifically, 8.6%YoY in April and 6.2%YoY in March, driven by increas- for 2022, limited income from tourism, es in energy and food prices. This brought the year-to-May along with the increasing payments for ener- average rate of change to 6.9% YoY, slightly outpacing gy goods, will widen the current account deficit, the 6.8% respective figure for the eurozone. High from -7.5% of GDP in 2021, to levels close to or inflation readings for a prolonged period erode even above 8% in 2022. Last but not least, the further the purchasing power of disposable incomes THE reduction of non-performing loans (NPLs) remains with an adverse impact expected on private ECONOMY a challenge for the banking system, despite past consumption for 2022, when in previous progress. The NPL ratio stood at 11.1% in years, consumption was a main con- STARTED WITH Q42021, down from 15.4% in Q32021 tributor to GDP. A POSITIVE CARRY and 17.7% in FY2020, yet it remains Before emerging from the OVER EFFECT INTO above EA levels. The agreement pandemic, Cyprus was rap- of the Starlight project in April, idly recovering from the 2022, YET HEADWINDS through which Hellenic Bank 2012-2013 financial ARE EXPECTED. FOCUS in Cyprus will dispose of crisis. Nevertheless, ON REFORMS COULD some €1bn of NPLs, could the latter inherited eco- push the ratio to lower levels, nomic impediments such FURTHER UNLEASH notwithstanding further pressures as the high share of NPLs and THE COUNTRY’S from increased inflation and lower excessive indebtedness, both pri- ECONOMIC GDP growth. vate and public, which, despite the Despite the challenges, Cyprus maintains progress, still remain not fully resolved. GROWTH uninterrupted market access and investment The pandemic added further pressure to POTENTIAL grade status. As an indication of Cyprus’ actual the public debt, which rose to an all-time economic standing and market participants’ percep- high of 115% of GDP in 2020. Yet the ratio fell tions of the country’s effort and progress so far, in April to 103.9% in 2021, with the medium-term trend DBRS Morningstar upgraded its sovereign credit rating, posed for a further reduction on the back of expected from BBB (low) to BBB, changing the trend from positive GDP growth and a return to fiscal stability. To that end, to stable, on the grounds of, inter alia, stronger-than-anticipated fiscal consolidation proceeded much faster than expected in growth and public finances during 2021 and supportive conditions for 2021, with the fiscal deficit falling to 1.8% of GDP, from 5.6% debt reduction in the medium term. Having said all the above, geopolitical of GDP in 2020, mainly due to strong revenue growth. With the upheavals in the Eastern Mediterranean remain a potential source of insta- fiscal adjustment flagged as a key priority on the economic policy bility. However, the potential for growth from the future exploitation of agenda, fiscal deficits in the medium term could continue shrinking natural gas reserves also remains. Policy continuity and political stability are as a percentage of GDP, anticipated at 1.3% in 2022 by the IMF, important prerequisites for growth, given that presidential elections will and fiscal surpluses or at least balanced budgets could return from be held in early 2023.

| 36 | G E N E R A L M A N A G E R S general managers Photo by TASPHO Stephanos Demetris Kassianides Shacallis Achilleas Antonis Malliotis Antoniou

Stephanos Kassianides | 37 | IGENERAL MANAGER, INTERNATIONAL BUSINESS Achilleas Malliotis BANKING AND BC NETWORK GENERAL MANAGER, CHIEF OPERATING OFFICER nternational Business Banking caters for the bank- ing needs of resident and non-resident foreign in- The role of a Bank’s COO was one of keeping all the dividuals and companies whose majority of opera- complex structures and operations within the organiza- tions lie outside Cyprus. We offer the full spectrum tion in a seamless functional equilibrium. This role in of banking products and services, such as current Eurobank Cyprus is now changing and is expanding be- accounts, fixed deposits, payment services, debit yond a pure cost perspective and operational efficiencies to include and credit cards, credit facilities, treasury products, the customer experience. trade finance facilities and escrow agency services. As the scope of activity is widened, the role of the COO of the bank The department’s mandate is to distinguish itself from its peers is facing major challenges against the backdrop of digitalization, reg- through its high quality of service and speed of execution, aim- ulations and pressure on profitability. ing to provide an unparalleled customer experience. Comprehensive digitalization is changing established business mod- The Affluent Banking department provides the full spectrum els and their organizational structures, as it requires the reorganiza- of personal banking products and services to clients through tion of governance, processes and a new value-added creation struc- dedicated relationship officers, located in the Banking Centers, ture without disrupting our operations and upseting our clients. creating a unique customer experience. Guidelines, laws and directives are supposed to make the banking Despite witnessing unprecedented times and escalating geopo- system safer and help restore lost customer trust. Banks themselves litical developments, we look to the future with optimism. In are overwhelmed by the flood of regulations and compliance is forc- every crisis there are opportunities and our biggest challenge is ing them to commit a high level of human and financial resources to to identify and explore them further. In the last few years, and implement these regulations. especially since the beginning of this year, we have observed This requires the development of strategic cost reduction measures an increase in the number international companies relocating by reorganizing the operating model and eliminating complexity. their operations and staff to Cyprus, signaling a change in the As Eurobank Cyprus wants to continue to be successful and innova- island’s International Business Industry landscape. We need tive it has decided to align itself in such a way that it can simultane- to ensure that we continue to offer a personalized customer ously cope with the challenge to be digital, compliant, efficient, agile service, coupled with a strong digital offering in order to satisfy and fast in the market. the demanding needs of this clientele.   Demetris Shacallis Antonis Antoniou GENERAL MANAGER, T GENERAL MANAGER, CFO WEALTH MANAGEMENT & GLOBAL MARKETS he responsibilities of the Finance Division range from the daily financial analysis and monitoring of the Bank’s The Wealth Management & Global Markets Di- performance to monthly financial reporting to manage- vision of Eurobank Cyprus has a long heritage ment, the Board and the shareholder, regulatory report- in the provision of wealth management, private ing, preparation of budgets and forecasts, tax planning as banking and global markets services, offering well as the preparation of Financial Statements. a wide range of investment, treasury, banking and credit In a rapidly changing business environment, the Finance division has solutions to our High Net Worth and Institutional Cli- grown in recent years beyond its traditional role, supporting the Manage- ents. Our philosophy revolves around establishing and ment in decision-making by providing in-depth data analyses and assist- maintaining long-term relationships of trust, combining ing in forming strategic initiatives. our extensive range of solutions with our high-calibre and As the Bank grows, the increasing volume of data poses a big challenge in experienced personnel. processing information using traditional tools. To address this, the Bank Responding to changing market needs and keeping up is in the process of implementing a new end-to-end technological infra- with the disruptive and fast-moving investment envi- structure, enabling the processing of data in a more timely and efficient ronment in which we live, our Bank has embarked on a way, further enhancing analysis as a basis for strategic decision-making. digital transformation journey. We have invested in a new In the face of increased regulation, the Division focuses on keeping up Wealth Management technology platform, planned to be to date with all regulatory developments, ensuring compliance with all installed within the next few months, and this will enable relevant frameworks, including recent developments on ESG and sustain- our clients to manage their wealth in a more efficient, ad- ability regulatory requirements. vanced and holistic way. In parallel, we continue to pro- Investing in human capital remains one of the main priorities of the vide our full spectrum of investment services and products Bank. The challenge is not only to attract skilled resources but also to using an open architecture approach and to facilitate trad- further develop and retain talent. To this end, the Bank aims at estab- ing in all global markets and financial instruments during lishing itself as an employer of choice in a workplace where diversity and extended trading hours (9:30am-11:00pm). inclusion play a key role. Through the continuous introduction and updating of governance policies, the Bank maintains a strong level in the area of Corporate Gov- ernance.

| 38 | I N T E R V I E W

| 39 | SPYROS LOIZOU Eurobank’s Five-Year Digital Transformation Roadmap Spyros Loizou, Chief Information Officer, Eurobank Cyprus, explains how the bank is transforming to embrace the digital revolution, while maintaining a high quality of service for its clientele by emphasising employee skills within a culture of ongoing improvement. Photo by TASPHO Eurobank Cyprus already provides an e-banking service to its customers. In what other ways the Bank has embraced digital transformation? Starting with e-banking and digital channels in general is the obvious first step and the cornerstone of a fundamental digital transformation but at Eurobank, we believe that digital transfor- mation is an ‘inside-out’ job. Today the Bank is transforming its technology footprint from the bottom up to fulfil this strategy. It starts from the core banking system, including all related back-end systems, all the way to the front- end digital channels. As such, the Bank is investing in implementing state-of-the-art software and infrastructure, replacing up to 85% of its current IT topology. The Bank’s digital transformation strategy is split into three main pillars, which address a five-year roadmap towards applying technology from the core outwards to client-facing channels: Pillar #1: Digital Customer: This pillar focuses on promoting digital channels as the preferred channel for day-to-day banking across the board, covering all our clientele. We consider that a strong digital offering, which enables self-service capa- bilities to the customer (corporate, affluent, private banking), should take on board as much transactional activity as possible and streamline back-end operations to the maximum. The objective is to simplify the back end and shift the focus and energy of the workforce to more value-add services for our clients.

| 40 | I N T E R V I E W Pillar #2: Digital Workforce: The focus here is on enabling employees put this into perspective via a very simple metric, in 2013 the country had to operate in a truly agile manner, not bound to the Bank’s premises but more than 1,200 branches of major and smaller banks across the island. As with the ability to function and service clients from any location through a per the European Statistics Authority at the time, Cyprus held the highest laptop or tablet. This means that the relationship manager can visit a client ratio of branches per 1,000 people across Europe. Less than a decade later, at their premises or any other convenient place of business, maintaining this statistic has significantly changed, as the combined total is less than 200 the Bank’s Private Banking character by offering truly customer-centric bank branches across the country. All the transactional activity that takes services. Initiatives under this pillar include 100% mobility, collaboration place in branches now is, by and large, fully digital and the offering keeps tools and education for the digital workforce to increase digital/technology growing and improving. This is an important factor for the sector and has savviness and much more. put Cyprus on a par with its overseas competitors. Pillar #3: Lean Banking & Paperless: This pillar of the digital transfor- mation journey is the basis for enabling a streamlined back-end process, What are some of the other digital transformation-related aspects of removing unnecessary complexity and eliminating multiple ways of doing Eurobank that help it stand out from its competitors? the same thing. It goes beyond the traditional sense of reducing manual It’s important to understand that technology on its own its not enough. In or paper-based tasks and addresses the concept of end-to-end customer or actuality, technology capabilities are already here to do wonders. The real employee journeys. This pillar includes initiatives such as the adoption differentiator is the people. The right people will introduce the right culture of digital signatures, end-to-end digital workflows for management or of ongoing improvement and the right culture will mature into smarter other approvals, process re-engineering, etc. and more efficient working. The key differentiating factors for Euro- bank are precisely these two: Was the digitalization process sped up by COVID-19 #1 People: It is key to upskill or even re-skill human resources and, if so, do you believe that the digital transfor- An so as to adopt new technologies and be in a position to make mation momentum will continue as we exit the ongoing the most of state-of-the-art software. This starts from pandemic? the implementation teams but it also extends to the While every Bank had its own plan of attack investment users of the technology. So, “tech savviness”, as it for migrating to digital channels and in people is a commonly referred to, is vital for the recipients kick-starting the digital transformation, must and is of new technology as well. Executive Man- in reality the pandemic was the real agement needs to understand and assess game-changer, especially for Cyprus. instrumental the potential gains from smart or newer This is because clients were “forced” into this for future technology and, at the same time, users must be channel and, in the process, gained confidence in a position to utilize the full extent of the capabili- in it. As confidence grew, the easier the task ahead success. ties offered. This means that an ongoing investment in became and, as more industries migrate their services people is a must and is instrumental for future success. to digital means, it is now becoming the new norm. It is #2 Culture: It’s important to establish a culture of ongoing evident that the momentum will continue as we exit the pan- improvement. This means that we need to assess often and demic and it’s very important to offer digital services which are empower people to ask, “Can we improve this process?” “Can we secure, robust and available. For Eurobank, cybersecurity is at the offer this service better?” “What are we doing wrong?” This is a shift in forefront of digital transformation and is now a commodity that clients culture and a mindset to apply critical thinking. A key aspect of nourishing expect as a minimum requirement. The pandemic has also given regulators such a culture is the adoption of an agile methodology and a project-driven the opportunity to review the regulation needed to accelerate the banks’ approach that will bring together business and technologists in joint teams. ongoing digital transformation, especially in the area of digital onboarding and KYC. This momentum is something that Eurobank wants to leverage What is your vision for Eurobank Cyprus’ further digital transforma- as much as possible for promoting a digital-first agenda. tion over the coming years? The short-term vision is to mature to a point where the Bank will have a How does Cyprus’ wider banking sector compare to its counterparts very limited physical footprint but will be in a position to grow exponen- overseas in terms of digital transformation? tially, without increasing costs while in the meantime maintaining efficien- In the past 3 to 4 years, Cyprus banks have been investing heavily in their cies. The implementation of the Bank’s digital transformation initiative will digital transformation and we have seen change taking place before our be the foundation to move even further ahead. The longer-term challenge eyes. While traditionally more mature jurisdictions have been ahead of Cy- is to be able to offer “Banking-as-a-service” and extend it to the wider eco- prus on this journey, we have now reached a point where we have achieved system for value-added functionally through fintech, government services critical mass: client maturity and trust have significantly been improved and other industries outside banking. As PSD2 and API-based banking in Cyprus, and not just in banking. This has mandated a change to the becomes more and more used in the EU, this will be feasible to a much banks’ operational model, where the landscape has changed completely. To greater extent and Eurobank will be ready to realize its vision. CYBERSECURITY IS AT THE FOREFRONT OF DIGITAL TRANSFORMATION AND IS NOW A COMMODITY THAT CLIENTS EXPECT AS A MINIMUM REQUIREMENT



| 42 | A F F L U E N T B A N K I N G U N I T

| 43 | POPI HADJIOANNOU AFFLUENT Banking: Dedicated Personal BANKING Services T HEAD, AFFLUENT BANKING, EUROBANK CYPRUShe Affluent Banking Unit providesBanking Unit is the provision of property loans both for the purchase Photo by TASPHOpersonal banking services to the upperof real estate for own use as well as for investment purposes. This in- retail segment, that comprises success- cludes the construction or purchase of a primary or holiday residence, ful local professionals. Our products the acquisition of land for the construction of a primary residence and services include housing loans, as well as the construction or purchase of a property for investment personal credit facilities, deposit ac- purposes. Despite the significant impact of the COVID-19 pandemic counts, debit and credit cards as well as on economic activity last year, the real estate sector showed resilience a fully-fledged e-Banking platform. At and continued to grow, assisted to a great extent by the Government’s the same time, we offer our customers subsidy program. During the pandemic, we supported our customers access to a selection of wealth manage- who needed financing for the acquisition of their residence as well as ment services through a high-calibre those customers who wanted to take advantage of investment opportu- team of experienced financial advisors. nities that arose. Our clients enjoy the personalized services of a dedicated Affluent Following the expiry of the subsidy program and in the aftermath Relationship Officer, who is a highly skilled and trained professional of the Russia-Ukraine war, the real estate sector continues to grow, capable of providing all-round banking solutions. Relationship Offi- albeit at a slower rate. We continue to support the sector through the cers are located in our eight Banking Centers offer of competitive housing loan prod- throughout Cyprus and are available to meet ucts. Our Relationship Officers guide at a time and place that is most convenient clients through a step-by-step credit to clients, thus facilitating account opening application procedure, with the aim of and credit procedures. At the same time, the Personal facilitating and speeding up this process. solutions offered are unique to each individ- And of course, we support our customers ual client, aiming to satisfy their individual contact \\ throughout the life of their loan for any needs and financial aspirations. and touch changes they wish to make. Our aim as a Unit, which is fully aligned The Bank has already embarked on its are of with that of the Bank, is to utilize the op- digital transformation journey with a full portunities offered by technology, both in paramount IT renovation programme. The use of order to reduce initial on-boarding costs importance technological upgrades and automation and, more importantly, to improve the ser- will improve banking experiences and vice we provide to our customers, whether to our back-office efficiency, while account this is a loan application or an account clientele opening and loan application processes opening procedure. At the same time, we will be simplified, thus improving our maintain our personal contact and touch, affluent product offering. The ultimate which are of paramount importance to our goal is to create seamless operations and Affluent Banking clientele. exceptional experiences for our clients. One of the main focuses of the Affluent

| 44 | I N V E S T M E N T

| 45 | KONSTANTINOS XANTHIS Investment Funds in Cyprus HEAD WEALTH MANAGEMENT OPERATIONS, EUROBANK CYPRUS C Photo by TASPHO and other facilities. The said services are well-designed and priced with a yprus has been investing for years in building an econo- well-rounded understanding of the Investment Fund market, focusing on my based on the provision of top-quality services and it investor protection and soundly facilitating a wide range of fund structures continues to be one of the leading jurisdictions used by and complex investment strategies. international businesses and High Net Worth Individuals as We are proud to have become the market leader and key Fund Services Pro- a base to manage their investments into Europe and other markets. In this context, Cyprus has built an advanced and vider in Cyprus, cooperating with renowned international Fund managers, sophisticated financial services sector and, more specifically, an Investment as well as the majority of local Fund managers and Fund Administrators, Funds sector, which is fully aligned and compliant with the international serving more than 100 licensed Investment Funds with AUMs in excess standards set by the European Union and other international organizations. of €3.6 billion, which represents more than 45% of Cyprus-based Funds’ Despite the difficulties of the financial crisis and the challenges asset value. brought about by the COVID-19 pandemic, the Cyprus Investment Our successes and continuous progresses derive mainly from our people, Funds sector exhibits a strong momentum, with business and invest- who are the fundamental element of our organization and who, aside from ments flowing in from many regions of the world, including Europe, their professionalism, comprehensive knowledge of the regulatory frame- Asia and the Middle East. work and carefully chosen best market practices, exercise a client-centric There is no doubt that Cyprus is evolving into a strategic European Union approach to providing services. This combination of expertise and a cli- financial centre for setting up investment funds and asset management ent-centred perspective is key in helping us foster longstanding professional companies. In less than a decade, it has managed to become an international relationships, while retaining a competitive advantage over other Fund private equity hub, facilitating investment across many industries including Services providers. shipping, loan origination, real estate and energy, etc., while also growing as Through our upcoming new IT platform, in particular, we will improve a centre for wealth management and an ideal family office destination for our clients’ experience with the Bank and further automate our operations, High Net Worth Individuals investing in financial assets worldwide. providing quality, efficient, cost-effective and highly competitive services for Eurobank Cyprus has not only followed this trend as Cyprus’ favoured the most demanding business and investor needs. bank for wealth management and other specialized financial services but has We greatly value our clients’ and associates’ trust and loyalty and we wish also invested in and actively pursued the development of the Investment to reiterate our commitment to continuing to work closely together as part- Fund Services business by establishing its own investment funds (ERB ners, to further develop our Fund Services offering, expanding the necessary Funds V.C.I.C. Plc) and has built dedicated teams, systems and relation- facilities and tools to enable them to achieve their objectives in the best ships with local and global players to promote and best serve Cyprus-based possible way. investment funds and its ecosystem. It is ultimately through mutually beneficial relationships with our clients Our Fund Services offering for investment funds includes banking and and associates that we aim to continue supporting the growth of our busi- global market access for trading, as well as Global Custody/Depositary ness and the Investment Fund market in Cyprus. THE CYPRUS INVESTMENT FUNDS SECTOR CONTINUES TO EXHIBIT STEADY GROWTH, WITH BUSINESS AND INVESTMENTS FLOWING IN FROM MANY REGIONS OF THE WORLD

| 46 | T R U S T S CYPRUS W ealth can be slow to grow and, if you INTERNATIONAL don’t take care of it, quick to shrink. Protecting wealth is not always easy. TRUSTS BRING It can be undermined by family WEALTH disputes, business challenges, high taxation, overspending and much PROTECTION – more. That’s why High Net Worth AND REAL PEACE Individuals (HNWIs) look to create robust, professional protection environments that secure the future of their family wealth. OF MIND Setting up a Trust is a highly effective way for families to make sure their hard-earned assets are used to support current and future genera- By Constantinos Ignatiou, Senior Manager, tions, in exactly the way they want them to. Client Services, Rebecca Ephgrave, That might mean setting wealth aside for the education of children or to support good causes. It could mean holding property for a minor Assistant Manager, Client Services and until they reach maturity. It’s certainly an excellent way of putting clear Simona-Maria Ciurla, and efficient succession plans in place. The other major advantage of a Trust is that it is a highly tax-efficient Client Relationship Manager, structure, significantly reducing unnecessary costs and helping wealth Trident Trust to grow organically. Fundamentally, a Trust puts protective structures around wealth, man- aged by independent Trustees in the family’s best interests. It grows that wealth and defends it against unfounded claims that can arise from creditors or family disputes. With so much at stake, it’s essential to carefully consider the role of the Trustee. This is an important and, in many cases, long-term relation- ship, requiring the highest level of confidence, integrity and profession- alism. Trident Trust has been establishing and administering corporate and Trust structures for more than 40 years and is itself a private business operating under a Trust. Provision of top-class professional Trustee services that go above and beyond client expectations are at the core of our business. As a highly experienced independent Trustee, we ensure that the wish- es of the Trust Settlor are always followed, in life and after death. But we do so much more besides. For example, we can help ensure that wealth remains a private affair, out of the public domain. When luxury assets like artwork and jewel- lery are involved, that’s as important for security as it is for privacy. We can also guarantee that luxury assets are properly insured and pro- tected, and secure and maintain any property held in the Trust. Or to put it simply, a well-structured and administered Trust, man- aged by an expert specialist Trustee, offers real peace of mind. It means that your assets are always protected, giving your family one less thing to worry about. It means the wealth you’ve worked hard for is only ever used in the way you want.

| 47 | THE CCOLLECTORS For many people, the value of their collections is not only monetary but sentimental. Collecting is a hobby that requires passion, dedication and the will to overcome challenges. Collectors may relive their childhood, reconnect with a specific period poarstaatnimdeprtheeseynfet,eolrsetBrvoyenngAblnyudailrbdioaaulte,Tcgoraleclayatefocro tnhteingueitnyebraettiwonesento come. Some collect for the thrill of the hunt. All are driven by a quest or the desire to fulfil a lifelong dream. On the following pages, three businessmen share their collections, and reveal the story behind their passion, the challenges they faced, and their ideas for future additions.  Photos by TASPHO And Michalis Kyprianou

| 48 | T H E C O L L E C T O R S Photo by TASPHO A Unique Heritage The Chief Executive of Pilakoutas Group, Charalambos Pilakoutas, talks about his remarkable collection of cars and motorcycles, many of which now form part of the unique Char. Pilakoutas Heritage, reflecting his longstanding ties with the automotive industry.

| 49 | “Ihave been collecting collection. “First of all, it was not easy to The Char. Pilakoutas Heritage, for which he miniatures for buy some of the cars and then came the huge credits the “collective effort of my colleagues years, but as far challenge of restoring them with all their and their teams who tirelessly, and with as vintage cars original features,” he says. a high degree of professionalism, worked are concerned, it He describes his collecting hobby as “A together to bring it to life.” He describes the was back in the process that demands a great deal of time Char. Pilakoutas Heritage as the result of mid ’80s when I and requires a lot of attention to detail,” his dedication to the vision and history of acquired and fully but it is one that continues to fill him with BMW, and to the values that the Pilakoutas restored my first car,” recalls Charalambos excitement. “Every time a car is restored, it is Group has embraced since 1932 – the year Pilakoutas. Not surprisingly, he collects a thrill to see it transformed into a precious when his grandfather established his first mainly BMW models, due to what he item belonging to a unique collection, not garage and showroom – and maintained from describes as “a very strong historical bond only on a local level but on an international generation to generation. with the brand”. That bond dates back to level as well,” he explains. “Walking around the models, in a captivating 1958, when Charalambos Pilakoutas Ltd Pilakoutas’ lifelong dream and vision of atmospheric environment, is an unparallelled became the exclusive agent for Cyprus sharing his passion with others and housing experience for all car enthusiasts,” he says. of the renowned Bavarian automobile at least a part of his collection became a “They can see the past, the present and the manufacturer. reality in 2021 with the official launch of future of one of the world’s most prestigious “The oldest items in my BMW collection automobile brands. And it’s not only a brand are the distinctive BMW Isetta, which dates Every time a car evolution; it’s a whole industry’s evolution in back to 1955, and a BMW classic motorcycle is restored, it is one place.” from 1951,” he notes, but his remarkable a thrill to see it And while the public can enjoy the BMW collection of cars and motorcycles includes part of Charalambos Pilakoutas’ impressive vehicles from as far back as the 1920s. “I also transformed into collection, the man himself continues to have a car of another brand that was built a precious item add to the number of special vehicles he in 1924,” he enthuses but, as if to make it belonging owns. Over the years, he has also started clear that age is not necessarily the key to to a unique collecting cars of other brands, with which a vehicle’s ultimate worth, when asked to collection the Pilakoutas Group is associated, including choose his favourite model from the entire Rolls Royce, MINI, Jaguar, Land Rover, collection, he selects the BMW M6, an Nissan and Renault. emblematic sport car from the early ‘80s. There can be no doubt that a passion for While an outsider may reason that it must cars is not only in Charalambos Pilakoutas’ be fairly easy for a car dealer to create a DNA but it has been passed down over four collection of automobiles, Charalambos generations of the family and shows no sign Pilakoutas is quick to point out that, no of disappearing. matter who you are, collecting and restoring cars is no simple task. He recalls how he faced a multitude of challenges in the process of creating and gradually expanding his CHARALAMBOS PILAKOUTAS Charalambos Pilakoutas is the Chief Executive Officer of Pilakoutas Group. Under his leadership, the Group has grown to become the largest motor trading corporation in Cyprus. Since March 2004, he has been the Honorary Consul of Guatemala in Cyprus.

| 50 | T H E C O L L E C T O R S Photo by TASPHO Sound Decisions about a Sound Museum Alexey Gubarev, CEO and co-founder of app-maker Palta, has one of the most impressive collections of audio apparatus in the world. With over 8,000 items valued at around €10 million, he intends to them in a unique museum. Here, he talks about his passion and the challenges of building such an extraordinary collection.