Eurolife Group, the parent company of the insurance group of the same name, is distributing to its shareholders the €1bn it received from the sale of 100% of Eurolife AEAZ to Eurobank, through a combination of an interim dividend, a dividend from undistributed profits from previous years and a return of capital.
In particular, Eurolife Group’s extraordinary general meeting on October 26 approved the distribution of a dividend of €140m from undistributed profits from previous years. The amount has not yet been paid to shareholders.
A day later, on October 27, Eurolife Group transferred 100% of its subsidiary Eurolife AEAZ to Eurobank for €1,006,385,587. On the same day, its board of directors decided to distribute an interim dividend of €676,385,587, based on profits for the period from January 1 to October 27, 2026.
During that period, Eurolife Group recorded a capital gain of €746.79m from the sale of 100% of Eurolife AEEAZ and net profit (i.e. after tax) of €729m. It is recalled that it held 100% of Eurolife AEEAZ on its books, at a cost of €259.59m.
Finally, on July 10, Eurolife’s extraordinary general meeting approved a return of capital of €190m, which had not been paid by October 27.
In total, through the three measures outlined above (a dividend from profits from previous years, an interim dividend for the current year and a return of capital), Eurolife Group will distribute €1,006,385,587 to its shareholders — the amount it received from the sale of Eurolife AEEAZ.
Eurobank will recoup €201.27m, bringing its net outlay for the acquisition of Eurolife to €805.11m (the purchase price initially stood at €813m), while Fairfax, through Costa Luxembourg, will receive €805.11m.
At the same time, Eurolife Group’s general meeting yesterday approved a loan of €541.1m to Costa Luxembourg (Fairfax) for a term of eight months (maturing on June 30, 2027), at Euribor plus a margin of 0.9%. Costa has the right to repay the loan early and provided no collateral. The loan may be repaid when the interim dividend is received.
What Eurolife adds to Eurobank
The consolidation of 100% of Eurolife AEEAZ by Eurobank will add €20m to €22m to fourth-quarter fee income, according to the bank’s management during yesterday’s conference call with analysts.
Eurolife AEEAZ ended the first nine months of this year with written premiums of €567m, retaining a market share of around 22%. Given its strong production of unit-linked products, with the risk borne by policyholders, its insurance liabilities are significantly lower than those of a traditional insurer, while returns are higher in rising markets. Eurolife’s assets stood at €4.1bn on September 30.
The bank’s management reiterated that adding Eurolife AEEAZ further diversifies its revenue streams, will boost fee income by around 12% and increase pre-provision profits by around 5%. The impact on capital from the increase in risk-weighted assets due to full consolidation is estimated at 120 basis points on the CET1 ratio. On a pro forma basis, CET1 stood at 14.3% on September 30.