ECONOMY

Piraeus Bank on target for 2003 profit goals

Piraeus Bank, the only one among the five major banks to report a profit increase in 2002, is hoping to duplicate the feat this year following positive growth indications in the first few months of the year. Michalis Sallas, the bank’s governor, said business growth in the year to date was «up by over 20 percent» in line with the overall year target. «First-quarter profits, according to early figures, are developing positively compared with 2002,» he told a press briefing. Piraeus reported an 11 percent hike in net profits to 66.2 million euros last year helped by the consolidation of ETBA Bank. Other major banks were less fortunate with the bearish stock market foiling a recovery in trading activities. Sallas also issued a bullish forecast for mortgage lending, which has grown above 30 percent in recent years. He said the sector is expected to continue expanding strongly even as consumer credit growth starts easing off. Piraeus plans to open 20 to 25 branches principally in the Attica basin this year on top of the 50 set up around the country over the last three years, underlying the intensifying competition in the retail sector. The bank’s mutual fund and bancassurance joint ventures with Dutch financial services giant ING, which kicked off last year, are forecast to post positive results this year. Mindful of the heavy costs involved and the sector’s difficulty in trimming operational costs, Sallas said reining in spending will constitute a major goal for the bank this year. He also confirmed plans by the bank to forge ahead in the Balkans with the setting up of 10 branches this year. Piraeus is participating in the tender for Bulgarian bank DSK and is close to finalizing the takeover of a small New York-based bank. It has operations in Romania, Albania, Bulgaria, Cyprus, the UK and the USA. Sallas endorsed Finance Minister Nikos Christodoulakis’s call last week on the banking sector to consolidate, but said mergers should keep in mind the value generated to shareholders and not just increasing size. «In the medium term, we need to evaluate the size issue, but the State must also improve certain conditions, such as the pension issue,» he said.